Companies and projects worth noting in BC

Despite the weakened metal markets of the past few years, B.C. is still a magnet for mineral explorers and mine developers. The following are six such companies with active programs covering all stage of upstream activity.

AURICO METALS

Toronto-based AuRico Metals (TSX: AMI) is a spinout from the 2015 merger of Aurico Gold and Alamos Gold. It has a dual nature with its substantial, wholly owned Kemess gold-copper property in B.C. and a portfolio of gold royalties in Ontario, B.C., and Australia’s Victoria State.

The Kemess open-pit mine was in production from 1998–2011, but subsequent above-ground expansion plans were shelved owing to local First Nations opposition. AuRico hopes its Kemess Underground development project, with its diminished surface effects, will be the way forward.

The economic metrics for Kemess Underground look good, with a feasibility study pointing to a $421-million after-tax net present value at a 5% discount rate and 15% internal rate of return, assuming US$1,250 per oz. gold, US$3 per lb. copper and a loonie worth US75¢.

The newer Kemess East underground discovery target looks even more prospective, with copper grades 69% higher and gold grades 23% higher than Kemess Underground.

In all categories, Kemess Underground and Kemess East now host 10.9 million equivalent oz. gold, with AuRico planning to update the Kemess East numbers in the first quarter of 2017.

Meanwhile in Ontario, AuRico’s net smelter return royalties (NSRs) include Hemlo-Williams, 0.25% NSR; Hemlo-David Bell, 1.5% NSR; and Eagle River, 0.5% NSR. The Australian royalties include 1% NSRs on Leviathan, Stawell and Fosterville.

AuRico’s royalties should bring in US$8 million in revenue in 2016.

BARKERVILLE GOLD

Barkerville Gold Mines (TSXV: BGM), which has relocated its head office to Toronto from Vancouver, has transformed itself from being a chronic underachiever with problematic resource estimates into a professionally run organization with one of the more exciting high-grade gold projects in Canada.

Barkerville has mineral rights totalling 2,110 sq. km over a huge swath of the Cariboo gold district in central B.C., plus a fully permitted mill and tailings facility, in territory that historically supported six lode gold mines that produced 1.3 million oz. gold, plus alluvial operations said to have produced another 3.2 million oz. gold.

Barkerville closed 2016 with a $12.2-million private placement of flow-through shares.

This year, Barkerville plans to have production from its Bonanza Ledge mine, and calculate new reserve and resource numbers for its Barkerville, Cow and Island Mountain deposits.

It will also work towards completing an environmental impact study in 2018 for a much larger mill and mine that could be built beginning in 2019, with an eye to commissioning in 2021.

The current crop of directors gives a sense of the new seriousness at Barkerville, with members including: co-chairman Sean Roosen; co-chairman Gregory Gibson; president and CEO Chris Lodder; Thomas Obradovich; Anthony Makuch; Morris Prychidny; John Kutkevicius; Allan Folk; and Ian Gordon. Management also includes vice-president of exploration Paul Geddes and chief operating officer Luc Lessard.

MARGAUX RESOURCES

Margaux Resources (TSXV: MRL; US-OTC: MARFF) is active at its Jersey-Emerald lead-zinc-tungsten-gold project in the prolific Kootenay arc, 10 km southeast of Salmo, in southeast B.C.

The Calgary-based junior describes Jersey-Emerald as the second-largest historic lead-zinc mine in British Columbia and the second-largest historic tungsten mine in North America.

Margaux notes the property is close to paved highways, rail lines, a power line, a local workforce and service and supply companies. It also boasts of “over 30 km of underground development in place, five truck-size portals and extensive historic surveying, mapping and core samples.”

The company completed a work program targeting the property’s lead-zinc and tungsten potential in late 2016, and is preparing to update a resource calculation.

Margaux argues that other advantages of the property include a relatively short lead time to production, and the ability to selectively mine lead-zinc or tungsten from different deposits on the property, depending on the market and commodity prices.

In January 2017, Margaux hopped on the gold bandwagon with the acquisition of the Bayonne and Sheep Creek high-grade gold properties, also in B.C.’s Kootenay arc.

MGX MINERALS

MGX Minerals has thrown itself headlong into the emerging industrial minerals subsector with its portfolio of magnesium, lithium and silicon projects throughout B.C. and Alberta, and a mandate to develop large-scale industrial mineral operations.

In January 2017, MGX reported that it had extracted lithium from heavy oil wastewater as part of optimization for completion and deployment of a pilot plant in support of its 4,870 sq. km Alberta lithium project.

The company says its patent-pending process for extracting lithium and other valuable minerals from oil brine is “the first of its kind, reducing production time of lithium from brine by 99% compared with conventional lithium brine production times that use solar evaporation,” and that process time is lowered from 18 months to one day using its process.

In December 2016, MGX said it had become Canada’s largest lithium brine landholder at 4,868 sq. km, and that it holds permits covering over 1 million barrels per day of brine production by various oil field operators throughout Alberta, including some of the highest levels of lithium-bearing brine, up to 140 mg per litre.

At Driftwood Creek in B.C., 164 km north of Cranbrook, MGX says it is building North America’s next magnesium oxide mine, having recently secured a 20-year mining lease, completed a 100-tonne bulk sample and released a maiden resource estimate. Measured and indicated resources total 8 million tonnes grading 43.3% magnesium oxide (MgO) with another 846,000 tonnes of inferred material at 43.2% MgO.

MGX notes that most of this open-pittable resource is less than 100 metres from surface and open along strike and at depth.

NEW GOLD

Intermediate gold miner New Gold (TSX: NGD; NYSE-MKT: NGD) has four producing mines: New Afton in B.C.; Mesquite in California; Peak Mines in Australia; and Cerro San Pedro in Mexico. In the third quarter of 2016, the company produced 95,546 oz. gold and 25.5 million lb. copper from its four mines.

New Afton is located 10 km west of Kamloops in B.C.’s interior, and exploits mineralization under the old Afton pit mined out by Teck Resources years ago. For the nine months ended Sept. 30, 2016, New Afton cranked out 74,200 oz. gold and 65.8 million lb. copper, plus minor silver — on par with 2015 numbers. New Afton’s all-in sustaining costs in that period were -US$202 per oz. gold due to the significant copper credit.

On the development front, New Gold is almost finished building the Rainy River gold mine in northwestern Ontario, and continues work on its Blackwater gold-silver project in south-central British Columbia.

At Blackwater, New Gold is focused on attaining approval of its environmental assessment (EA), and says that the coordinated federal and provincial EA technical review is progressing, with the company responding to comments received from the federal government, provincial agencies and local indigenous communities.

New Gold says it anticipates approval of the Blackwater EA by mid-2017, even as it evaluates further optimization of the Blackwater project.

New Gold spent $7 million at Blackwater in the first nine months of 2016. The wholly owned project boasts 8.2 million oz. gold and 60.8 million oz. silver in reserves (344.4 million tonnes grading 0.74 gram gold per tonne and 5.5 grams silver per tonne).

DOUBLEVIEW CAPITAL

Founded in 2011, Vancouver-based micro-cap Doubleview Capital (TSXV: DBV; US-OTC: DBLVF) is focused on its early stage Hat gold-copper porphyry project, which comprises 26 sq. km in six mineral tenures located in northwestern B.C. in the Sheslay Valley, 95 km southwest of Dease Lake and 190 km south of Atlin.

Doubleview has had a fairly active second half of 2016, including diamond drilling at the Hat property, with five holes totalling 2,000 metres in a program to expand the Lisle zone. The assay results are due soon.

Long intercepts of gold and copper have been drilled in previous programs at Lisle, such as hole 22 returning 404 metres grading 0.26 gram gold per tonne and 0.25% copper, and hole 23 cutting 400 metres of 0.25 gram gold and 0.29% copper.

Doubleview closed a $560,000 private placement financing on Nov. 1, with the Farshad Shirvani-led junior recently proposing another financing of up to $1 million.