Balmoral expands newly optioned Gargoyle property by 1,600%

In August, Balmoral Resources (TSX: BAR; US-OTC: BALMF) optioned the Gargoyle nickel property, 55 km northeast of Atikokan, Ontario. Just a few weeks later, it expanded Gargoyle 1,600% by staking another 697 claims, and acquiring two new properties nearby: Goblin and Ghost.

The additions make Balmoral the dominant landholder in that part of the Lumby Lake greenstone belt. Its Gargoyle property includes 21 mapped and interpreted ultramafic volcanic and intrusive bodies across more than 20 km of strike length. Only one has been drilled and confirmed to be ultramafic.

As far as the company can tell, it controls most of the ultramafic sequences in the belt.

Balmoral began with a focus on gold properties, but entered the nickel space when it found the Grasset nickel-copper-cobalt property at the eastern end of its Detour trend gold project in Quebec. Although the company’s initial drilling hit gold at Grasset, it later found a nickel-copper-platinum zone — just in time for the nickel market to crash in 2015.

“With Grasset in-hand, we kept doing a bunch of work in the background, looking for other areas in the country with potential for — call it ‘camp-scale’ discoveries,like Grasset,” Balmoral president and CEO Darin Wagner says during a telephone interview with The Northern Miner.

The company focused on areas that hadn’t seen a lot of work but indicated ultramafic intrusions that typically host nickel mineralization. The Gargoyle property showed the right indicators, but didn’t contain a lot of known mineralization, until prospector Karl Bjorkman told Balmoral earlier this summer that he had found nickel-sulphide mineralization in the belt.

The Gargoyle property in relation to Goblin and the smaller Ghost. Credit: Balmoral Resources.

“We had one of our geologists go out and have a look at it, and we were actually quite impressed with the style of mineralization, which occurs for over a kilometre of strike length in isolated outcrops,” Wagner says.

The company entered an option agreement with Bjorkman. It can earn a 100% interest in Gargoyle by making cash payments to Bjorkman totalling $140,000 in the third year. Over the same period of time it will also make payments to Bjorkman totalling 390,000 shares. Bjorkman would keep a 2% net smelter return royalty on the property if Balmoral completes the option that the company could buy back for $1 million.

Samples at the Gargoyle nickel project. Credit: Balmoral Resources.

Balmoral spent $30,000 staking the rest of its land position, including Goblin and Ghost.

“Credit to the Ontario Geological Survey, because they did a mapping survey in that belt and produced a map in 2010 that outlines the extent of the ultramafic suite,” Wagner says.

Goblin sits 11 km west of Gargoyle. It is separated by a large body of granite, which Wagner says probably continues from the same rocks at Gargoyle. The smallest of the three properties, Ghost, sits 6 km southeast of Goblin and covers a small intrusion.

Gargoyle has intrusive ultramafics and komatiitic volcanic sequences, but Goblin and Ghost look like solely intrusive bodies, and, according to Wagner, show geological similarities to Grasset.

“The combination of mineralization in the style that we were looking for, the lateral extent of the mineralization that we could see in the very limited work that’s been done, and the ability to very cheaply pull together the entire package made it attractive for us to go ahead” Wagner says. “It complements the work we’ll be doing shortly at Grasset., and helps build the nickel side of the business.”

The company is a third of the way through its 7,500-metre, summer–fall drill program at the Detour trend. It recently began drilling its Detour East gold property after wrapping up a series of holes on its Martiniere property.

Wagner could transition to Grasset this September. The company is looking for a second drill to bring to Grasset, as it will receive most of the drill money the company has allocated for the summer and fall. The company intends to perform expansion drilling on the Grasset deposit, and specifically on a high-grade nickel sulphide breccia zone it discovered in 2015.

Additional rock samples from the gargoyle property. Credit: Balmoral Resources.

In March 2016, the company tabled a maiden resource for Grasset. The project has 3.45 million indicated tonnes grading 1.56% nickel, 0.17% copper, 0.03% cobalt, 0.34 gram per tonne platinum and 0.84 gram palladium for 119 million lb. nickel, 13.2 million lb. copper, 2.3 million lb. cobalt, 37,900 oz. platinum and 93,400 oz. palladium. This represents a high-grade core the company says lies within a larger nickel sulphide body totalling more than 15 million tonnes.

The company will fly an airborne magnetic and electromagnetic survey of Gargoyle, Goblin and Ghost in early October. If weather conditions are good, it will follow up with more mapping and prospecting.

“We know there’s going to be a large number of anomalies out of that survey because there is a relatively recent — although wider-spaced — government survey that outlines a lot of geophysical anomalies, the kind we want to see in the belt,” Wagner says. “Our survey will tighten that coverage up and may allow us to go directly from airborne to drill testing.”

Shares of Balmoral are valued at 15¢ with a 52-week range of 14¢ to 69¢. The company has a $21-million market capitalization.

“We like where the nickel market is and we like where it’s going an awful lot,” Wagner says. “It’s not often in our business where you get a major, new demand stream for one of the primary metals, and the electric vehicles are exactly that for nickel.

“The market from time to time has a little bit of trouble figuring out whether we’re a gold company or a nickel company, and I keep telling them over and over again: we’re an exploration company. If it’s gold, great. If it’s nickel, that’s great too.”