Probe Gold’s Novador may hold 6M oz., Quebec project’s assays indicate

Probe Gold’s (TSXV: PRB) latest assays from its Novador gold project in Quebec’s Abitibi region lengthen the strike, likely increase the resource and make it an acquisition target.  

Toronto-based Probe’s 175-sq.-km Novador project, about 500 km northwest of Montreal, holds the past-producing Beliveau, Bussière and Monique mines. The site 25 km east of Val-d’Or consists of three satellite areas, Monique, Pascalis and Courvan. The project, which used to be called Val-d’Or East, issued assay results in a news release on Tuesday. 

“At least 500 metres of strike length has been added to the known Courvan resource size between two previously defined open-pits,” Barry Allan, a mining analyst for Laurentian Bank, wrote in a note on Tuesday. “The high success rate of drilling suggests a total resource increase of 1 million oz. or more to over 6 million oz. total.” 

The improved resource potential, following the tripling of the indicated gold resource at the Monique deposit in January, places the Novador project on a path to be acquired by an established mine builder with experience in the region, such as Agnico Eagle Mines (TSX: AEM; NYSE: AEM), Eldorado Gold (TSX: ELD; NYSE: EGO, or Iamgold  (TSX: IMG; NYSE: IAG), Allan said.  

The new assays should lower the overall strip ratio when the project updates a prefeasibility study later this year, the analyst said. It will incorporate an updated resource estimate for the Courvan and Pascalis deposits due next month.  

Standout assays include expansion drill hole CO-22-324 north of the former Bussiere mine, which cut 17.9 metres grading 9.2 grams gold per tonne from 63.1 metres downhole, Probe said. It’s one of 67 assays issued totalling 19,400 meters that all reported intercepts above a cut-off level of 0.4 gram gold per tonne. 

Probe president and CEO David Palmer said the results align with success across the project as the company continues with more expansion drilling.  

“We are seeing additional improvement in both grade and thickness and are achieving our objectives of resource improvement across all three deposits,” Palmer said in the release. “With the exceptional drill results that have been coming in from the 2022 program, we will evaluate potential increases in annual production.” 

Andrew Mikitchook, a mining analyst at BMO Capital Markets, also said Novador’s resource will increase and looks forward to results from the company’s exploration program this year, which has already drilled 45,000 metres. 

“New parallel gold zones near the Bussiere and Creek deposits were identified through last year’s expansion drilling,” Mikitchook said in a note on Tuesday. “The Bussiere and Creek deposits have been drilled only at shallow depth. A few drill intercepts below 350 metres at the Creek deposit returned positive results, a potential indication that the deposit may remain open at depths.” 

Allan said selling Novador would allow Probe to focus on the La Peltrie project near Detour Lake, Que., a copper-gold-silver-molybdenum deposit about 190 km north of Rouyn-Noranda in the Abitibi region. Probe is exploring it with Midland Exploration (TSXV: MD).   

Probe shares rose 3.7% on Tuesday morning in Toronto to $1.67 each, within 52-week range of $1.09 and $1.90, valuing the company at $265.4 million.