Canadian Gold Snapshot: Quebec, Ontario and BC remain prime destinations

“Busy” would be a good word to describe gold explorers and developers in Canada in mid-2018. With gold prices holding steady above US$1,200 for a sustained period and the Canadian dollar showing ongoing weakness, it’s a good time to carry out substantial exploration and development campaigns in Canada’s gold camps, old and new. The following are examples of eight such companies.

BONTERRA RESOURCES

Bonterra Resources (TSXV: BTR; US-OTC: BONXF) has its wholly owned, high-grade Gladiator gold project in the Urban-Barry greenstone belt, 170 km northeast of Val-d’Or, which is comprised of two adjacent properties named Arena and Coliseum.

The Gladiator gold deposit has an inferred resource of 905,000 tonnes grading 9.36 grams gold per tonne for 273,000 contained oz. gold, according to a 2012 study.

A new resource estimate is due later this year, and it will incorporate 60,000 metres drilled in 2017 and 70,000 metres planned for 2018.

Drill results released in April show a sixth parallel gold zone at Gladiator, while infill drilling confirms the continuity of the deposit’s other zones.

Newly released preliminary metallurgical studies at Gladiator show total gold recoveries of up to 99.4%, including 76.1% from a gravity circuit.

Bonterra also has its Larder Lake high-grade gold project across the border in Ontario, where resources in all categories are just shy of 1 million oz. gold.

Bonterra has raised $60 million over the past 14 months and its major shareholders include Eric Sprott, VanEck Gold Fund and Kirkland Lake Gold.

GT GOLD

Vancouver-based, Kevin M. Keough-led GT Gold (TSXV: GTT; US-OTC: GTGDF) is an early-stage explorer hunting for gold in northwestern British Columbia’s prolific Golden Triangle region.

The company’s flagship asset is the wholly owned, 432 sq. km Tatogga gold property, located 10 km off Highway 37, where the company has been developing the grassroots Saddle gold prospect since 2011.

GT Gold has two new discoveries at its Saddle prospect: a high-grade, epithermal gold-silver vein system at Saddle South; and near Saddle North, what GT calls the “probable ‘engine’ for the entire system” in the form of a copper-gold-silver mineralized porphyritic intrusive, which geophysical surveying indicates is “large in scale, and which early drill results suggest may be rich.”

GT has four goals for 2018: expansion drilling of the high-grade, gold-silver vein systems at Saddle South and Saddle North; expansion drilling of the copper-gold-silver porphyry discovery at Saddle North; finishing initial metallurgical test work; and wrapping up a National Instrument 43-101 compliant resource calculation, perhaps tabled by early 2019.

GT plans to drill 18,000 metres in mid-2108 at Saddle in a $6.8-million program, with mobilization on June 1.

The company has $9 million in its treasury, with the potential for another $873,000 from exercising in-the-money warrants that expire this year.

KIRKLAND LAKE GOLD

Toronto-based Kirkland Lake Gold (TSX: KL; NYSE: KL) has evolved into a mid-tier gold producer targeting over 620,000 oz. gold production in 2018 from four mines in low-risk jurisdictions: the flagship Macassa as well as the Taylor and Holt mines in northeastern Ontario; and in Australia, the large Fosterville mine in the state of Victoria.

Kirkland is also working to resume operations at its Cosmo operations in the Northern Territory, which is on care and maintenance, but where Kirkland has a substantial new gold discovery.

The Australian assets came into the Kirkland fold via a friendly business combination with Australia’s Newmarket Gold, which swelled the number of Kirkland Lake employees and contractors to 1,800.

In 2017, the Macassa mine produced 194,000 oz. gold at an operating cost of US$523 per oz., while Fosterville produced 264,000 oz. gold at an operating cost of US$264 per oz. gold. Combined, the two mines produced 77% of Kirkland’s annual production, which totalled 596,400 oz. gold.

Earnings and cash flow have been on the upswing for Kirkland over the past couple of years, and the trend is continuing, with first-quarter net earnings rising to US$53.8 million from US$13.1 million in the year-ago quarter, and free cash flow hitting US$50.2 million from US$38.5 million over the same period.

HORNBY BAY EXPLORATION

Toronto-based, micro-cap Hornby Bay Mineral Exploration (TSXV: HBE; US-OTC: HBEXF) is focused on its Coppermine River uranium properties in the Hornby Bay geological basin in northwestern Nunavut, but it also has wholly owned mining leases on the gold-bearing, Pipestone-Destor-Porcupine fault systems in Ontario’s Timmins area.

Of these five royalty-free mining leases, Hornby considers the East Clavos lease its most important, because it shares a boundary with Sage Gold’s emerging Clavos gold project.

At last report, Hornby had acquired all drilling permits and was preparing a small diamond drill campaign at East Clavos.

Hornby Bay says that the 2 km, untested Pipestone fault system “represents one of the last untested major gold targets in the Timmins-Porcupine gold camp.”

MCEWEN MINING

Gold and silver producer McEwen Mining (TSX: MUX; NYSE: MUX) has had such a strong connection with Mexico and Argentina that it’s sometimes easy to forget the company has a substantial, producing gold asset that it acquired in Ontario, and is also developing two new mines in Nevada and Mexico.

McEwen bought the Black Fox gold mine complex in October 2017 for only US$35 million from distressed seller Primero Mining.

The Black Fox mine produced 51,209 oz. gold at an average grade of 6.2 grams per tonne during the first three quarters of 2017, and 14,279 oz. gold at a grade of 6.47 grams per tonne in the fourth quarter of 2017.

McEwen has budgeted US$10 million in 2018 for a property-wide exploration program at Black Fox that will consist of 60,000 metres of surface drilling and 40,000 metres of underground exploration, and delineation drilling. The objectives are to test for extensions of existing resources, follow up on significant drill results and investigate new exploration targets.

METALLIS RESOURCES

Vancouver-based Metallis Resources (TSXV: MTS; US-OTC: MTLFF) is another grassroots explorer active in northwestern B.C.’s Golden Triangle region, where it has its wholly owned Kirkham property, which is prospective for gold, copper, silver and nickel.

The Kirkham property is 65 km north of Stewart, B.C., and the property’s northern border is contiguous to Garibaldi Resources’ E&L Nickel Mountain project, whereas the northeast corner of Kirkham is within 12 km of the Eskay Creek mine, and the eastern border is within 15 km of Seabridge Gold’s KSM deposits and Pretium Resources’ Brucejack mine.

The Kirkham property was assembled over the years by world-renowned copper-gold expert Rodney Kirkham, and then vended into Metallis.

Metallis says the property features several geological environments — magmatic sulphide, porphyry and shear vein — and has the “potential for a world-class mineral discovery.”

In March Geotech finished an airborne, versatile time-domain electromagnetic survey over the Thunder North, Thunder South and King target areas within the Kirkham property.

Metallis says results will be integrated with historical data to prioritize targets for follow-up groundwork during the 2018 exploration season, which could start as soon as weather conditions allow.

SUNVEST MINERALS

Vancouver-based junior Sunvest Minerals (TSXV: SSS; US-OTC: SRKZF) has been been staking new ground around its Clone gold property, adding 39 sq. km to a property that now stands at 107 sq. km., located 16 km southwest of IDM Mining’s development-stage Red Mountain gold project.

Sunvest says it wanted to “strengthen positions around several previously held Minfile prospects and showings acquired in October 2017, and to cover possible extensions of mineralized showings from neighbouring company’s properties.”

In recent months, Sunvest has been resampling historic core drilled at the site in 1995, and is confirming high-grade gold intercepts over significant widths. The work is helping Sunvest plan a follow-up drill campaign.

VICTORIA GOLD

Victoria Gold (TSXV: VIT; US-OTC: VITFF) is building a mine at its Eagle Gold project on its Dublin Gulch property in the Yukon, which hosts a reserve of 123 million tonnes grading 0.67 gram gold per tonne, or 2.7 million oz. gold.

In March, the Toronto-based junior landed an aggregate $505-million financing package that will fully fund mine construction at Eagle Gold.

The financing involves Orion Mine Finance, Osisko Gold Royalties and Caterpillar Financial Services. It holds two credit facilities totalling US$175 million; an equipment-financing facility for up to US$50 million; a $98-million royalty financing; and a private placement of Victoria common shares to two separate subscribers for a total of $125 million.

The mining rate is planned at 33,700 tonnes per day, producing 1.88 million oz. gold over 10 years.

In mid-May, Victoria Gold entered a hedging program with Macquarie Bank to “mitigate the risk associated with adverse fluctuations and volatility in the price of gold during the critical early years of operation and debt repayment.”

Victoria says the hedging program is unsecured and a zero-cost collar, and comprised of 100,000 oz. of put options purchased with a strike price of $1,500 per oz.; and 100,000 oz. of call options sold with a strike price of $1,936 per oz. gold. The 100,000 oz. gold include 40,000 oz. in 2020 and 60,000 oz. in 2021.