Quebec Precious Metals looks to be a possible gold takeover target in 2021
Quebec Precious Metals Corporation (TSXV: QPM | OTCQB: CJCFF) (‘QPM’) currently trades on a market cap of just C$15.6 million (~US$12 million) and continues to find more gold with a series of excellent drill results in recent months. Meanwhile, Newmont Corporation is a major share holder in QPM, holding 15.6% of the Company’s shares. Newmont Corporation knows the James Bay Quebec region well and has had success at their nearby Éléonore Mine. All of this suggests it would not be unreasonable to see Newmont make a move on QPM, either a greater equity share, a friendly merger, or outright takeover.
Certainly there is plenty of precedent. The above mentioned Éléonore Mine was acquired by Goldcorp for approximately $420 million in 2005. Then in 2019 Newmont acquired Goldcorp for $10 billion.
Quebec Precious Metals Corporation – Company overview – Newmont is a strategic equity holder
Source: QPM corporate presentation
QPM holds a prospective and large land package of 1,100 km2 located in the gold mining camp region of James Bay. Their flagship project is the Sakami Project which allows for all year round drilling and is showing excellent exploration potential for gold. The Sakami Project covers 140 square km and lies about 90 km northwest of Newmont Corporation’s Éléonore Mine.
Here’s a brief summary of the successful drilling over the past 7 months at QPM’s 100% owned Sakami project:
- Dec. 15, 2020 – High Grade at La Pointe Extension: 60.8 g/t Au over 0.3 m within 1.4 m at 15.01 g/t Au. Other results included long lengths of gold such as PT-20-162 – 42 m at 1.31 g/t Au, PT-20-159 – 80 m at 1.10 g/t Au, PT-20-155 – 53.8 m at 1.03 g/t Au, PT-20-154 – 70.3 m at 1.14 g/t Au, PT-20-153 – 35.4 m at 1.45 g/t Au, PT-20-151 – 80.1 m at 1.15 g/t Au.
- Nov. 24, 2020 – QPM intersects 42 m at 1.31 g/t Au, including 16.8 m at 1.95 g/t Au at La Pointe Extension.
- Nov. 9, 2020 – QPM intersects 80 m at 1.10 g/t Au at La Pointe Extension.
- Sept. 16, 2020 – QPM discovers a new gold and base metals system from surface sampling at Elmer East with grabs up to 17.75 g/t Au.
- Sept. 10, 2020 – QPM extends the La Pointe Extension discovery with 53 m at 1.03 g/t Au and near surface discovery at Simon.
- Aug. 13, 2020 – QPM expands La Pointe Extension discovery over 2 km; continues drilling.
- July 22, 2020 – QPM drills 1.14 g/t Au over 70.3 m at La Pointe Extension Discovery.
As shown above there is a consistency of significant long length gold discoveries. QPM’s plan is to continue to drill and then release a maiden resource estimate at Sakami at some stage hopefully in H1 2021.
In addition QPM has several other gold exploration stage projects in the region, which QPM also plans to explore for gold. These include Elmer East, Cheechoo-Éléonore Trend Project, Blanche Project, and Charles Project. Another plus is that all of these are 100% owned by QPM. There are also other non-core assets that QPM may spin-off as they did recently as you can read here.
A summary of QPM’s major projects in James Bay Canada
Source: QPM corporate presentation
Here are some facts to consider. Newmont Corporation has a market cap of US$49 billion. QPM’s market cap is just ~US$12 million. Newmont has already shown a strong interest in QPM, and is in fact their largest shareholder at 15.6%. Newmont has had great success in the region with their Éléonore Mine, itself a result of a takeover. Newmont has a history of acquiring other gold miners.
Investors can make up their own minds regarding a possible Newmont takeover of QPM. Certainly QPM’s Sakami Project continues to get solid drill results and a maiden resource at Sakami is expected in H1 2021. Elmer East, Blanche and Charles also show early promising signs for gold. With an increasingly prospective very large land package of 1,100 km2 in James Bay, I will not be surprised if QPM receives significant interest in 2021 from both investors and possible suitors, with Newmont at the top of the list.
Let me know your thoughts in the comments below. Also leave a comment if you know of an even better gold takeover target in 2021.
Disclosure: The author is long Quebec Precious Metals Corporation [TSXV:QPM].