Tagish Lake is best known for being the landing point of a large meteorite that struck at around 9:48 on the morning of January 18, 2000. Scientists have named the meteorite after Tagish Lake. The 150-ton space rock plunged into the earth’s atmosphere at the speed of a fast highway car (67 miles per hour). At 5 meters (or 15 feet) across, the rocky core triggered Department of Defense satellite sensors to record its fiery explosion near Tagish Lake. The meteor had finally exploded with the energy of two to three kilotons of TNT.

Fascinating stuff, but we like Tagish Lake for another reason: massive gold and silver deposits. Tagish Lake Gold Corp (TLG.V) is focused on high-grade gold and silver deposits on its wholly owned Skukum Mineral District, located 80 km southwest of Whitehorse, Yukon Territory, Canada. The Company was formed as a result of the amalgamation of Omni Resources Inc. and Trumpeter Yukon Gold Inc. in November, 2000. The Skukum property consists of a past-producing mine with mill and two partially-developed deposits with near-term production potential. They have three high grade gold-silver vein deposits on their property, with more than a million tonnes of 8gpt gold and 150gpt silver ‘measured and indicated’ resource category already defined. Tagish Lake Gold plans to be in production as early as 2008 and has a targeted initial rate of production of 60,000-oz. gold-equivalent/year over a minimum of five years at cash cost of under $220/oz. Not too shabby for a company with a market cap of just $20 million (78 million shares outstanding). Taglsh Lake Gold reported a loss of ($0.88) per share in 2005, down from ($1.13) during 2004.

In addition to the advanced-stage Skukum Creek project, Tagish Lake Gold Corp also has a number of “blue-sky” projects on their property, whose potential has yet to be fully assessed. These offer little tangible value at the current time, but are nice wildcards to have in the event of a new mineral discovery.

face_greg.gifTagish Lake Gold Corp is headed by 30-year veteran Bob Rodger. Another industry veteran in T. Greg Hawkins, adds to the impressive line-up of experts working to bring Tagish to production. Mr. Hawkins gave an interview to Smartstox in February of this year, which you can view here. Overall, we are confident in the ability of management to smoothly transition the company from an explorer to a producer in the next year to two.

Tagish has released a series of reports detailing high-grade intersects and extremely encouraging results from their current drill program. These holes are part of the 6,500 metre program to outline the Rainbow Two Zone, and to test the Berg and Kuhn mineralized zones. The complete results are yet to come back from testing, but the bottom line is that they are continually increasing their resource estimates and it won’t be long before the market takes notice. Mr. Rodger was quoted as saying:

“The drilling has led to the discovery of the Berg zone and the additional drilling will help to assess the significance of this new zone. The Rainbow Two zone continues to be extended, with high grade intersections. It is encouraging to see that the values have been encountered in the Kuhn zone where the zone has been intersected. We continue to be pleased with progress achieved so far this year in moving forward to production with the Skukum Creek deposit.”

TLG_Chart.pngThe price of Tagish stock quickly doubled from $0.15 to $0.30 between August and September of this year, before quickly retreating and consolidating in the $0.21 to $0.25 range. This run occurred just after the 50-day moving average crossed upwards through the 100-day moving average and was accompanied by a significant increase in volume. The RSI on this chart is holding above 50 and looks poised to push higher. We are still hesitant to take any large positions before the elections conclude, but will look to pick up some Tagish stock on dips below $0.22.

With the resumption of the upward trend in the broader precious metals market, we think TLG will easily test the previous high of $0.33 before year end. That is a quick 50% return if we are correct. Downside risk should be limited to a drop to around $0.18, or approximately 20%. TLG flys below the radar of most goldbugs, which should provide an opportunity to those getting in before any positive announcements of drill results. Good luck and happy investing!

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