Ethos Capital Reports First Results

Monday July 18th, 2011 - Baltimore, MD

Dear Underground Profits Member,

The price of gold rallied to an all-time high today past $1,600 an ounce. Gold prices have increased over $100/oz in less than a month.

New investors continue to come into the market seeking safe haven from the falling U.S. dollar and troubled global markets, despite higher gold prices. Data from the CFTC's weekly report last Friday showed a surge in gold buying from large financial institutions. Seeing these professionals still buying gold at $1,600 an ounce is an incredibly bullish signal for both the physical metal and gold stocks going forward.

As you know, one of my favorite gold stocks right now is Ethos Capital. The company has an incredible land package located in the single most exciting gold exploration region in the world right now. Ethos recently just begun to release the results from their long-anticipated summer exploration program. Here's what's happening now...

Ethos Capital (TSX-V: ECC)

Early last month, Ethos Capital embarked on ambitious campaign to discover precious metals in the White Gold District west-central Yukon Territory, Canada.

As we've talked about before, the White Gold District is home to several brand new, large gold discoveries. These include Kinross' 1.3 million ounce Golden Saddle deposit and Kaminak Gold's Coffee discovery, which recently yielded high-grade drill results including:

• 1.11 g/t of gold over 44 meters,
• 2.83 g/t of gold over 62 meters, including 17.36 g/t of gold over 7 meters, and
• 9.61 g/t of gold over 17 meters, including 24.50 g/t of gold over 3 meters

Along with Kinross and Kaminak, Ethos is one of the largest land holders in the Yukon. The company is currently exploring nearly 5,000 mineral claims, covering an area of over 250,000 acres.

In total, Ethos' exploration team is expected to collect approximately 33,000 soil samples during this summer's exploration program, lead by project generator Shawn Ryan.

To date, nearly 20,000 soil samples have been collected and a small portion of the results from soil samples taken from Ethos' Betty project have just been reported.

Ethos' Betty project consists of 730 claims covering 37,500 acres and is located immediately east of Kaminak's Coffee property, where, as you just saw, very high-grade gold is currently being discovered. This is very important to us as investors.

You see, gold mineralization at the Coffee deposit is associated with a large regional geologic fault termed the “Coffee Fault”. The Coffee Fault is defined by a east-west trending geologic structure that has already been proven to contain high-grade gold in significant concentrations. And a large part of the geologic fault that runs through Kaminak's Coffee deposit also spills over onto Ethos' Betty projects. Have a look:

click to enlarge

To date, a total of nearly 4,000 soil samples have been collected from the Betty property. And a few results are in.

Nearly 1,200 samples, representing about 30% of the samples collected at Betty, have been assayed. The results are not comprehensive or complete, however Ethos has already reported that “significant gold-in-soil anomalies have been discovered.”

Gold values up to 384 ppb have been discovered near a 3 mile segment of the Coffee Fault. Mineral values up to 597 ppb of gold were also found in other areas of the Betty project.

President and CEO Gary Freeman commented on the results in a recent company press release saying, “We are extremely happy with the progress our field crews have made so far and we are very excited about the soil survey results that we have received to date. The anomalies outlined by the 2011 soil program indicate that the sampling methodology executed by our partner Shawn Ryan is working. These results are especially exciting given their close proximity to the Coffee discovery.”

Ethos still has over 10,000 soil samples to collect. And the majority of the assays have yet to be complete. But now that results are just starting to come, we can really start to get excited.

As more soil samples are returned over the next few weeks, Ethos will have a much clearer picture of the grade, locations, and concentrations of gold mineralization across the company's highly-prospective projects.

I truly hope by now you've established a decent position in Ethos Capital by now. Shares of ECC closed at below $1.30 today. Yet, I believe we'll see share prices exceed $2.00 as Ethos begins to unveil the true mineral potential of the company's projects. So even at $1.30, ECC still remains a buy.

Up Next

Last week I discovered a brand new mineral exploration company that I am very excited about. The company has an incredibly interesting polymetallic project in Alberta. This polymetallic project is already known to host important metals like gold, silver, copper, zinc, nickel, molybdenum, and even rare earth elements like lithium. The type of rock found on this company's project is already being billed as the “mineral-equivalent of the Canadian oil sands.”

I can't wait to learn more about it. I'll report back to you on this company very soon.

Good investing,

Luke Burgess
Investment Director, Underground Profits