Kozak reviews the MI3 Gold in Val-d’Or Event with O3 Mining, Monarch Gold and Cartier Resources
It’s American Thanksgiving today and I see that there is yet another infernal Zoom meeting to view. Oh, but wait – it’s gold mining companies in that gold sweet-spot of Quebec. Man, I hope the Washington-Dallas game doesn’t go into OT….(Postscript – in case you missed, there was no OT….there was however, a rather lopsided finish…)
Put on by MI3 Communications, the Zoom presentation featured three gold exploration companies with assets in and around the Val-d’Or region of Quebec. This is a phenomenally prolific gold-producing area in Canada and is rife with mines that have had multiple previous owners and multiple exploration ideas before actually becoming gold mines. More companies, more ideas, more potential for new mines to be discovered – time for more Zoom!
O3 Mining Inc. (TSXV: OIII). Because we all know the name “Osisko Mining” and their Midas touch in the gold space, this is another one of their companies that drew my attention to this “conference”. The company currently has an approximate $170 million market capitalization and had some positive news this week on drilling results at the Marban Project as the company looks to expand mineralization outside of the proposed pit areas as announced in the Marban Preliminary Economic Assessment (PEA) in September 2020.
The company is well-funded with approximately $60.8 million of cash and investments at September 30, 2020 and owns 100% of the Marban Project. To date, there are 1.9 million ounces of gold (Measured and Indicated) plus 0.6 million ounces Inferred. An attractive component of gold mining in the Val-d’Or area is the low capital intensity for initial capital expenditures. However, this is not the end of this company’s story – they have an “aggressive Osisko-style exploration” program underway for 2020-2021 to drill 150,000 meters, of which just over 50,000 meters are completed and the company is conducting a resource expansion drilling program at Maraban plus a pre-feasibility study to be completed in 2021 for a potential mining project. But it also has an Ontario gold project at Garrison that is advancing towards a PEA, which will likely be sold. But when you look at the valuation of the company and the value of the Maraban project, the exploration is basically free.
Monarch Gold Corporation (TSX: MQR | OTCQX: MRQRF). Although the slide presentation was in English, the company gave its presentation in French. My French comprehension is not good enough to fully understand, but the presentation slides and website give a good understanding of the company.
The company was in the news earlier in November with the announcement that the company has entered into a definitive agreement with Yamana Gold Inc. by which Yamana will acquire the Wasamac property and the Camflo property and mill through the acquisition of all of the outstanding shares of Monarch (not already owned by Yamana) for total consideration of approximately $200 million or $0.63 per Monarch share on a fully diluted basis. The transaction will be a combination of cash and Yamana shares, giving Monarch shareholders ongoing exposure to the assets plus a cash return.
The remaining exploration assets in the company will be spun out to shareholders in a new company, Monarch Mining Corp. with an implied value of approximately $47.5 million. Management views this as a fully integrated mining company, from exploration through to production. Its assets will include the Beaufor mine, the Croinor Gold, McKenzie Break and Swanson gold properties and the Beacon mill, as well as $14 million in cash. It is important to note that all those assets will be wholly owned and unencumbered.
The mission of the team is to become a gold producer, while continuing to develop its projects with strong exploration potential. The Beaufor mine has a 42,500-metre drilling program is currently under way to increase the mine’s resources with a view to resuming production. Exploration is ongoing at McKenzie Break to build the resource on this very promising high-grade gold project, with results expected in the coming weeks. The company also intends to find a partner to help put the Croinor Gold project into production.
Cartier Resources Inc. (TSXV: ECR). As their presentation title says, “A Pivotal Year for the Chimo Mine Project” in this $50+ million capitalization company. Unfortunately for me, the presentation and the verbal commentary were both in French. However, I downloaded an English version from the website and was able to mostly follow along.
The company filed a NI 43-101 report in June, 2020, highlighting ~0.6 million ounces of gold in the Indicated Resource category and ~0.6 million ounces of gold in the Inferred Resource category in this 100% owned project and continued drilling results make this project an attractive potential project.
In August, 2020, the company closed a $9.3 million equity raise to bring total cash resources to (currently) more than $13.5 million, providing ample future exploration capital. It should also be noted that in November, the company announced a new NI 43-101 report to be prepared for a second property at nearby Benoist.
The company’s focus is to advance its four key projects through drilling programs. All of the projects were acquired at reasonable costs in recent years and are drill-ready with targets along the geometric extensions of known gold deposits.
All-in-all, three very interesting companies in a region that is exceptional for low-cost gold exploration and production. I have my favourite(s) still – how about you?
Frederick Kozak is a Professional Engineer with extensive oil and gas, and international business experience and has more than 25 years involved in capital markets ... <Read more about Frederick Kozak>