RE: Windermere Cap interview...PART 2Adventure also joint ventured (JV'd) its Dubuisson property, which is right beside
Agnico-Eagle Mines Ltd. (TSX:AEM; NYSE:AEM) Goldex Mine. A couple months ago Agnico, picked up 51% of Dubuisson through payments and drilling commitments. Agnico will continue to drill the property out, starting within the next month or so. What interests us about Adventure is that it's almost a hybrid model. The company will option off some of its properties and keep others to work on itself.
Adventure recently put out drill results from its third flagship property, Pascalis-Colombière. This is the area surrounding and including the old L.C. Béliveau Mine, owned by Cambior. Cambior had mined it up until the early 1990s and, over a four-year period, it produced close to 170,000 ounces (Koz.) of gold. With gold prices coming down back then, Cambior closed the mine. Subsequently,
IAMGOLD Corporation (TSX:IMG; NYSE:IAG) bought Cambior and viewed Pascalis as a non-core asset. Adventure picked up the property and has come out with very encouraging drill results. It's important to note that production at that historic mine had been done only down to the 300-meter level, which, in Val-d'Or, is not very deep. But the company believes there's still a lot of gold to be found beneath the existing and to the west of the mine.
The fourth flagship property that Adventure is working is the Granada Extension, which is next to
Gold Bullion Development Corp. (TSX.V:GBB) Granada Property. Adventure picked this property up toward the end of 2010 and has received some encouraging sampling results. The belief is that the Granada Extension is similar to
Osisko Mining Corp. (TSX:OSK) Malartic property. You're looking at a large tonnage, low-grade type deposit. Gold Bullion has drilled aggressively and put out a non-compliant NI 43-101 block model, showing 2.5 Moz. in a relatively small area.
Adventure's other properties also are in historic areas: Detour East, which is east of
Detour Gold Corp. (TSX:DGC) property and Casa-Berardi, near the operating
Aurizon Mines Ltd. (TSX:ARZ; NYSE.A:AZK) space.
These properties, coupled with the fact that the company has close to US$4M in cash and cash equivalents sets Adventure up very well. It has a lot of opportunities. With four properties now being worked, we think Adventure will generate a lot of news flow. We're quite optimistic that, with a US$35M market cap, the market has not really given this company the attention it is due.
TGR: Could Lake Shore and Agnico, the two JVs Adventure is working with, act as something of a poison pill in hindering a takeout of Adventure?
BO: Our feeling would be that, if there were any interest in the company, it would probably be property by property. It is unlikely that one company would come in and take all those assets. Case in point, if drilling proves out the down-dip extension from Lake Shore's property, Lake Shore might be interested in the Meunier property. If Agnico's drilling proves out that there is more gold beside its Goldex mine, we would see Agnico having an interest in that property. Adventure's assets are spread out within the Abitibi region, so we would see logical buyers on a property-by-property basis as opposed to an outright acquisition of the company itself. Particularly on its four flagship properties, we feel that any one of those could be a company-maker.
TGR: That is a great story, Brian. Do you have another one?