Wallbridge hits gold on first drill hole at Casault in Quebec

The first reported hole of thirteen drilled this summer into exploration targets on the Casault property in northwestern Quebec returned 2 metres grading 6.85 grams gold per tonne starting from a depth of 254.4 metres, Wallbridge Mining (TSX: WM) says.

“We thought the Casualt property is a prospective area and that’s why we optioned it from Midland Exploration, and our first hole hit mineralization with visible gold,” Marz Kord, Wallbridge Mining’s president and CEO, says in an interview. “It’s really not the grade—2 metres of six or seven grams, which was nice—but it’s the fact that we went into an area that hasn’t seen any drilling for kilometres, and when you hit on your first hole, it’s a testament to our team of geologists and also the prospectivity of the land package.

The company is earning up to a 65% stake in the Casault property, which covers more than 20 km of the Sunday Lake Deformation zone, which also hosts the company’s 100% owned Fenelon and Martiniere gold projects, and Kirkland Lake Gold’s (TSX: K; NYSE: KL; ASX: KLA) Detour gold mine, 40 km to the west in Ontario.

“Casault is actually located between Martiniere and Detour,” Kord notes. “We now control basically this entire 97 km belt right from the Ontario border to our Fenelon gold project, the same distance as between Val’d’Or and Noranda, and it’s an area that’s probably about 100 years behind in terms of modern exploration because there’s 20-30 metres of overburden, but just as prospective.”

The drill program at Casault is testing targets between four and twelve km west of Martiniere and 34 to 41 km west of Fenelon. Casault is about 110 km of the town of Matagami.

The first drill hole is particularly significant because it is located in a largely untested part of the property to the north. The other 12 holes, like the first, intersected strong shear and alteration zones with sulphide mineralization that are interpreted potentially to be part of gold-bearing systems.

“We’re keenly awaiting the remaining assays,” says Kord, a mining engineer who joined Wallbridge in 2011. “We just started the option agreement on Casualt so this was the first year of exploration and our first drill program on this, so as you can see we’re going to continue with the option agreement.” (Under the option agreement signed in mid-2020, Wallbridge can earn up to a 65% stake in the property.)

The Casault property also hosts the Vortex zone, a disseminated gold system with drill hole intersections grading up to 1.38 grams gold per tonne over 26.5 metres.

Meanwhile, Wallbridge is on track to release its first resource estimate on its flagship Fenelon project before the end of October and to issue an updated resource estimate for its Martiniere project.

The company acquired the Fenelon project from Balmoral Resources in late 2016 for $3.5 million and started exploration there in 2017.

“It had a historic resource of 40,000 oz. at the time and we expect our first resource to show the multi-million oz. potential,” Kord says, adding that Fenelon was a noncore asset for Balmoral at the time. “During our due diligence we saw a lot of potential. It wasn’t just the 40,000 oz. deposit, it was a gold system, and the story from there has been that we built a team of geologists around it and have continued to grow the company.”

The deposit remains open in multiple directions laterally and at depth.

Andrew Mikitchook, a mining analyst who covers Wallbridge at BMO Capital Markets, said he expects “an initial resource ranging from 1.5 to 3.5 million oz. grading 5-10 grams gold per tonne from the high-grade underground Tabasco and Cayenne areas, along with open pit material from the Area 51 zone and other mineralization from satellite zones.”

Last year Wallbridge acquired Balmoral for about $150 million. The transaction also gave it the Grasset nickel project, which Kord describes as one of the highest grade nickel projects in the world not owned by a major.

“The province has a lot of exploration upside for not just gold but also other commodities,” says Kord, adding that the province is also a very good jurisdiction for mining exploration and development.

“We love Quebec and in particular the area of Quebec that we’re in, partly because of the infrastructure,” he says. “Where we are is essentially about the same distance north as the Detour mine is, and further north to that we continue to look for prospective properties, whereas on the Ontario side there is very little infrastructure.”

He also points out that there is hydropower less than 18 km from the Fenelon project, and the First Nations in the province “are very supportive.”

“There are the Cree and the Algonquin First Nations, and more than 27% of our workforce is made up of First Nations,” he says. “These guys, and particularly the government and regulators, are very keen about exploration and mining, but more importantly, when you spend $1 on exploration, you get a refundable tax credit of close to 38¢, so that’s also very attractive in terms of exploration.”

BMO’s Mikitchook has an outperform rating on Wallbridge and a price target of $1.00 per share. At presstime in Toronto the company was trading at 58¢ within a 52-week trading range of 48¢ and 93¢. Wallbridge has about 817 million common shares outstanding for a market cap of about $474 million.

Kirkland Lake Gold owns a 9.9% stake in Wallbridge and its CEO Tony Makuch sits on the junior’s board of directors. Financier Eric Sprott owns over 20% of the company.

“These are supportive shareholders who have and will continue to support the company,” Kord says.