Driven Capital (DVV:TSXV) is our new FeaturedCompany and its share price has been butchered over the last 12 months. This is why, along with its unique fundamentals, we have decided to roll the dice with this junior. It's a classic bottom fishing scenario.

Driven's shares closed at a price of $0.06 today. Its 52 week high is $0.255 and 52 week low is $0.045. The company has a tight capital structure with roughly 28 million shares outstanding, which gives it a market cap of $1.7 million - roughly the same value as a 4 bedroom single family home in a decent neighbourhood of Vancouver.

Two of Driven's three projects are adjacent to, or in better words, literally touching the claim boundaries of two of the most aggressive mining exploration projects in North America. In just a moment you will realise why Driven is not just some forgotten junior, as it has strategic land packages with Teck Resources and New Gold as its neighbors.

Driven's Blackwater East Gold Project is located next door to New Gold's Blackwater Gold Project. New Gold is conducting one of the largest mining exploration programs in the world on its Blackwater Project. Needless to say, it is one of British Columbia's fastest growing gold deposits. New Gold has reported more than 200,000 metres of drilling planned during 2012 alone! It has already proven up 7.8 million indicated and inferred ounces of gold at Blackwater. New Gold has been aggressive in buying up assets in the surrounding area and Driven finds itself with a claim block to the east and north of New Gold's most recent acquisitions. Driven's project is appropriately named, Blackwater East (New Gold's Blackwater project in brown on map below).



Driven is exploring its 8,500 hectare claim block, known as Blackwater East, adjacent to New Gold's Blackwater Project. Although work has been done on Blackwater East, the project is still largely grass roots. Early work on the project has returned high in-soil gold values of up to 530 ppb gold. Other prospective areas on Blackwater East include the southernmost slopes of Kuyakuz Mountain, where a 1995 government sampling program resulted in stream silt samples containing 465 ppb gold and 165 ppb gold in one drainage. Visible gold was identified in a follow-up sluice-box sample taken by Driven from that very drainage last summer. Driven applied for a drill permit in early May and expects to have it before long.

The 2011 season was all about building the science and geology of Driven's Blackwater East Project. During the last field season, in 2011, the same year that saw the company's shares trade as high as $0.35, Driven carried out prospecting, geological mapping, rock sampling and soil sampling at Blackwater East. This work identified three well-defined geochemical anomalies, having elevated levels of silver, copper, lead and/or zinc as well as scattered high gold values of up to 530 ppb gold. Driven took its time building a base of geological data before going back into the field this year - with plans to carry out geophysics, then drill.

This is a Location Play

For New Gold to have already acquired other junior explorers in the area, scheduled more than 200,000 metres of drilling in 500 holes this year, after already identifying 7.8 million ounces of gold (inferred and indicated) at its Blackwater Project, it says a lot about the future of the region.

The below are two excerpts from New Gold's website regarding recent acquisitions the company made (keep in mind Driven's Blackwater East Project is next door to New Gold's Project):

"acquiring the project in June 2011, New Gold has been actively drilling to extend the limits of the Blackwater mineral resource and expand its mineral rights through the acquisitions of Silver Quest Resources and Geo Minerals Inc."

"New Gold is aggressively pursuing new discoveries within the greater Blackwater region."

New Gold has already gobbled up 2 companies, and more recently (March 22, 2012), provided Gold Reach with consideration consisting of a cash payment of C$6 million and a 2% net smelter return royalty on its Auro Properties (and a commitment to spend C$500,000 on exploration in each of the next three years to advance the properties). The Auro Properties include two claim blocks immediately to the southeast of the Blackwater Project. The Auro land package begins five kilometres from the current Blackwater mineral resource.

With a market cap of more than $4.6 billion and over 400,000 ounces in annual production, $6 million is a drop in the bucket for a company like New Gold. According to New Gold's website "Work by Gold Reach to date includes: airborne electromagnetic surveys, over 6,000 soil samples and 3,000 metres of drilling." New Gold goes on to state that "Historically, C$2.4 million has been spent on the properties with the majority focused on the Auro property, located adjacent to the Blackwater mineral resource." That really isn't a heck of a lot of work, nor a huge investment in comparison to most exploration programs recently. The return for Gold Reach shareholders was favourable in our opinion.

Driven Capital has reported that two of its geochemical anomalies from the 2011 season coincide with regional magnetic anomalies in the south and southeastern portions of Blackwater East. Follow-up prospecting over the coincidental anomalies revealed some extensive areas of moderate alteration with some included zones of silicification.

These findings have been integrated into the design of a 27 line-kilometre ground magnetic and induced-polarization (IP) geophysical survey scheduled for the first half of this field season. The necessary permit to carry out the geophysical work is in hand, and lines were cut for the survey near the end of the 2011 season.

Driven has applied for a permit to carry out a 2,000 metre, first-phase diamond drilling program, contingent upon the results of the geophysics. The Company has retained Coast Mountain Geological Ltd. to manage the drill permitting process.

The drilling application was submitted in early May and with rumours of 28 drills turning next door at New Gold's Blackwater Project, getting a single drill onto Blackwater East should hopefully not be an issue!

The advantages of exploring next to the largest mining exploration program in Canada are significant. Now Driven must execute on its work plan and let the results speak for themselves.

As New Gold continues to expand and move its Blackwater Gold Project along, an infrastructure build up could develop. This would, as it has in the past, benefit companies operating in its immediate vicinity.

Driven's Blackwater East Project is made up of 23 contiguous mineral claims. The company has the option to acquire 100% of the project.

The White River Project

Driven is not a one trick pony. Its White River Project (under an earn-in and joint venture agreement with Tarsis Resources) shares its claim boundaries with another mining outfit you may have heard of - Teck Resources. The White River Project is in the Yukon, but not the White Gold District where many companies will spend millions this season.

Below is a map of the White River Gold Project in relation to Teck Resources' project.


As you can see from the above map, the White River Project is just off the Alaska Highway within the prolific Tintina Gold Belt. It is still a short helicopter ride (5 mins) to the property, but nonetheless, it is a lot closer to significant infrastructure than many other projects in the Yukon

We have discovered that, last month, Teck submitted a permit proposal to conduct work on its Wolf Property beginning this spring and summer. This large-scope application has been submitted into the public domain for an evaluation under the Yukon Environmental and Socio-economic Assessment Act.

This is of significance to Driven Capital and to our report for some very obvious reasons.

The key facts from Teck's proposal (which can be found via the Online Registry at http://www.yesab.ca) are below:

· Five claim blocks totalling 1,738 quartz claims, or over 36,000 hectares.
· Up to 60,000m of drilling (20,000m RC, 40,000m diamond) in 300 holes.
· 600m of trenching (50m x 12).
· 200 line-kilometres of ground geophysics.
· 57 personnel, including 35 people in an onsite camp.

Teck is not proposing a small work program by any means. Many are unaware of this, but Driven's partner on the project in the Yukon (Tarsis Resources) prospected and staked White River a year before Teck staked its Wolf Project. Tarsis Resources was releasing assay values (from the White River Project) of rock samples from outcrop and float of up to 39.8 g/t gold, 8.52% copper and 1,310 g/t silver.

In 2011, Driven entered an earn-in and joint venture agreement with project generator, Tarsis Resources, a spinoff of Almaden Minerals, on the White River Project. Driven is the operator of the project and can acquire a 60% interest in White River from Tarsis by making cash and share payments and incurring exploration expenditures over a four-year period, including a first-year commitment to drill not less than 1,500 metres. Earn in requirements are very reasonable and should favour both parties should Driven make a new discovery this season.

Upon Driven fully exercising its option, a 60/40 joint venture will be formed between Driven and Tarsis to co-operatively explore and develop the property. Driven's top exploration priority this year is to execute its work commitments on White River, and we expect news in regards to drilling imminently.

White River is comprised of 335 contiguous quartz claims totaling approximately 7,002 hectares, within the prolific Tintina Gold Belt.

The Project is located approximately 11km north of the settlement of Koidern and is accessed via a 5-minute helicopter trip from a 3,000-foot airstrip at the White River Lodge on the Alaska Highway, 390 road kilometres northwest of Whitehorse.

During the 2010 and 2011 field seasons, Tarsis carried out prospecting, geological mapping, geochemical soil sampling and hand trenching on the property. Two large zones mineralized in gold, copper and silver (West Zone and East Zone) were discovered along exposed ridge-tops.

The West Zone is at least six square kilometers in size, as defined by strongly anomalous gold, copper and arsenic in soils. Prospecting rock samples from outcrop and float returned assay values of up to 39.8 g/t gold, 8.52% copper and 1,310 g/t silver. Limited mapping has identified 10 distinct vein structures within a better exposed portion of the zone.

Eleven hand trenches were completed across five of these structures last summer; strong anomalous gold values were identified in nine of eleven hand trenches, with a channel sample from one trench returning 82.2 g/t gold across 1.0 metre; and a grab and an auger sample from the core portion of the same exposure returning 214 g/t gold and 129 g/t gold, respectively.

White River's main discovery zone is about 350 metres wide by 600 metres long - thus far.

Upon the JV partnership being reached, it will give Driven and Tarsis an advantage over a singular company attempting to develop the White River Project, with two technically acclaimed teams working as one. The fact that Teck has 60,000 metres of drilling proposed for its adjacent Wolf project, which was staked after Tarsis staked the White River Project, is very encouraging to our team.

The CEO of Tarsis stated last year, in an edition of the Northern Miner, of which the White River Project was the cover story, that:

"White River is pretty exciting because it's a brand new discovery. There has been no historic work done there and we have found high-grade gold, silver and copper. We can even see the highway from the property. It's amazing that in this day and age, you can find a property that close to the highway. There's still great opportunity there."

To read the entire report by Northern Miner, known as the leading Global Mining Newspaper, click here.


The Driven story is not a complicated one. We are attempting to bottom fish as we continue our hunt for historically cheap stocks that have been liquidated in the latest crash. The company's share price has been hammered down so much that its market cap sits at roughly $1.7 million. Remember that its shares traded as high as $0.35 in 2011.

Driven is nestled directly adjacent to two aggressive exploration projects being ran by major producers. New Gold and Teck are great neighbours for a junior to have. With the White River Project already delivering samples of up to 214 g/t gold last season and a follow up drill program planned, the risk/reward works for us. The company's Blackwater East Project, located only a few kilometres from a 7.8 million ounce gold deposit (inferred and indicated), also has a work program planned for this summer. Driven is a client of ours so consider us bias.

When evaluating a company or the markets, one has to be a forward thinker and always looking three to six months into the future. The combination of the historically bullish fall period approaching, drilling season, depressed valuations on the TSX Venture and added stimulus efforts by central banks around the world, have led us to accumulate in this market environment while many exit. "Be a contrarian or be a victim" was a statement coined by famed junior resource investor, Rick Rule.

We look forward to bringing you updates from Driven Capital (DVV:TSXV) over the summer months.

All the best with your investments,

PINNACLEDIGEST.COM