Renaud Adams invests in Radisson Mining

Veteran miner Renaud Adams, who recently sold Richmont Mines to Alamos Gold (TSX: AGI; NYSE: AGI) in a deal valued at about US$770 million, is investing in Radisson Mining Resources (TSXV: RDS; US-OTC: RMRDF) a junior explorer focused on northwestern Quebec, where it is advancing its 100%-owned O’Brien gold project, about halfway between Rouyn-Noranda and Val-d’Or.

The project hosts the former O’Brien underground mine, which is located along the Larder-Lake-Cadillac fault in the Abitibi greenstone belt and produced 587,121 oz. gold at a grade of 15.25 grams gold per tonne between 1926 and 1954.

Adams purchased part of a $1.5-million private placement announced in late 2017, and the proceeds will fund exploration and development next year.

“Renaud is taking a good chunk of the financing,” Hubert Parent-Bouchard, Radisson’s head of corporate development tells The Northern Miner. “It’s a great endorsement.”

In addition to the historic O’Brien mine, the property contains a much smaller past-producing underground mine called Kewagama, about 1.5 km to the east, and in an area, like the former O’Brien mine, that lies just south of the Cadillac break.

“We’re working in the shadow of two headframes,” Parent-Bouchard says, adding that for the last 24 months the company has focused on drilling and expanding the existing National Instrument 43-101 compliant resource in two areas: Kewagama, and a nearby zone halfway between the former O’Brien mine and Kewagama, called 36E. (Zone 36E is about 150 metres from O’Brien.)

Renaud Adams.

“Everything is in place at Radisson to unlock some interesting value,” Adams writes in an email explaining his investment rationale. “It has a very committed management, the project is in a friendly and prolific region with great geological potential and surrounded by best-in-class operations. I’m also particularly excited with the ongoing drilling program on the Vintage zone and more to come on the O’Brien deposit.”

He also says that with just 115 million shares outstanding and a current market cap below $20 million, the company is “perfectly positioned to enter this next period of delivering superior value to shareholders.”

The potential at Kewagama, which produced less than 100,000 tonnes between 1928-1939 and 1980-1983, is at depth, because the former operation did not go down deeper than about 250 metres. By contrast, the former O’Brien mine went down to 1,100 metres.

The company has focused on expanding the current resource between the 36E Zone and Kewagama, which measures 570,800 indicated tonnes grading 6.53 grams gold per tonne for 119,300 oz. gold and 918,300 inferred tonnes grading 6.38 grams gold for 188,500 oz. gold.

Since the resource estimate was completed in 2015, the company has compiled and digitized more than 60 years of historic work into a database. It has re-logged and assayed historic drill core, and completed more than 30,000 metres of its own drilling.

Radisson plans to update the resource, which was completed in 2015, in the first quarter of 2018.

The 36E Zone appears to be wider and lower grade than the majority of the current resource and represents a potentially new model, Parent-Bouchard notes.

“In the past they were looking at it as a narrow vein, high-grade project, but we see that gold has been disseminated into the background, which could eventually lead to bulk mining or wider mining stopes, so 36E could be an interesting game changer for us,” he explains, adding that encountering high-grade gold mineralization in wider lower-grade envelopes at different depths is encouraging.

Meanwhile, Radisson is exploring a parallel zone north of the main resource area and about 85 metres to the north of the Cadillac break, called Vintage, where it has kicked off a 6,000-metre, second-phase drill program that will continue into next year.

In mid-November, it reported a 1.4 metre intercept in the Vintage zone grading 27.5 grams gold from a depth of 66 metres.

Other notable intercepts include 14.6 grams gold over 6 metres and 7.4 grams over 6 metres from a depth of 218 metres, and its deepest hole, at a depth of 610 metres, returned a 4-metre intercept grading 6.9 grams gold.

The Vintage zone remains open in all directions, and due to its high grade and proximity to the current resource area, has the potential to become an important part of the O’Brien exploration and development plan, the company says.

“We have hit interesting high-grade gold mineralization over a strike length of 825 metres, which is generating a lot of upside on the story, and it’s doubled or tripled our growth potential,” Parent-Bouchard says, adding that Vintage could be accessible via the same infrastructure that exists at Kewagama to the south. “Vintage is a fresh breath of air for the project.”

He also notes that what’s interesting about Vintage is the zone is in a setting comparable to Agnico Eagle Mines (TSX: AEM; NYSE: AEM) Lapa gold mine, 8 km away.

“There’s historic and ongoing production at Lapa within those rocks and in the same setting,” he says. “And the main ore body at Lapa starts at 500 metres depth, and most of the results we’ve had from Vintage are from surface to 580 metres depth.”

By the end of this year Radisson will have drilled about 23,000 metres, 5,000 of which were punched into Vintage.

The company is fully financed for the 6,000-metre drill program and depending on the resource estimate, the start of a preliminary economic assessment. Parent-Bouchard expects the company will drill a total of about 25,000 metres in 2018.

The project is within 75 km of five existing mills that could custom-mill its ore. (Agnico Eagle’s LaRonde [7 km]; Iamgold’s [TSX: IMG] Westwood [21 km]; Monarques Gold’s [TSXV: MQR] Camflo [40 km] and Dorval [77 km]; and QMX Gold’s [TSXV: QMX] Lac Herbin [75 km].)

Investors in the company include US Global Funds (6%); Caisse de dépôt et placement du Québec (4%); management and insiders (14%); and a local group of investors (38%).

Over the last year Radisson’s shares have traded within a range of 14¢ and 17¢ and at press time in Toronto were trading at 16.5¢.