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“Let the numbers speak for themselves.” Those were among the first words out of the mouth of the President and CEO of Bonterra Resources Inc., Nav Dhaliwhal, (
TSX: V.BTR,
OTCQB: BONXF,
Forum) in a recent meeting with Stockhouse editorial. Dhaliwal can afford to let Bonterra’s assets do the talking.
The Company’s flagship land package, its Gladiator Project, represents one of the most significant new gold discoveries in Canada in recent years. The property is situated on 7,563 hectares, located in the Urban-Barry Greenstone Belt. Improbably, this new discovery occurred within the world-famous Abitibi gold belt. This is one of Canada’s most established and developed mining districts, from which more than 200 million ounces of gold have already been extracted.
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(click to enlarge) Specifically, the Gladiator Project (and Gladiator Gold Deposit) represents
high grade gold, with BTR striking such mineralization virtually every time it sinks a drill bit into the ground. And Bonterra has been doing a lot of drilling at Gladiator.
The Company began its first drilling on this property in the latter half of 2015 before seriously ramping up exploration activities in 2016. Last year BTR drilled approximately 20,000 meters, with numerous high-grade intercepts to catch the eye of any serious mining investor. A few of the better numbers are below.
- 5.7 meters of 24.3 g/t Au
- 2.5 meters of 137.4 g/t Au
- 5.5 meters of 70.0 g/t Au (including 2.0 meters of 191.4 g/t Au)
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Now Bonterra is getting
busy at Gladiator. The Company is planning
60,000 meters of drilling on the Gladiator land package in 2017 with most of that activity focused on the Gladiator Deposit itself. Three drills are already turning at Gladiator and Bonterra is considering adding a fourth rig.BTR had raised a substantial amount of capital earlier this year which (at the time) took its corporate treasury up to approximately $20 million, so it is well-financed to carry out this ambitious campaign.
Most of the drilling will focus on further expanding and defining the Gladiatior deposit, which is open along its 1.2 km strike length and at depth (drilling has already gone down as far as 800 meters). However, additional step-out drilling is to be conducted, especially with respect to prospective targets to the west (and south) of the Gladiator Deposit.
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(click to enlarge) When BTR acquired the Gladiator Project in 2015, previous operators had already engaged in significant exploration. In July 2012, a resource estimate was prepared for the project by Snowden Mining Consultants. That estimate reported 905,000 tonnes
grading at 9.37 g/t Au, for a total deposit of 273,000 ounces. The estimate is not considered NI 43-101 compliant.
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(click to enlarge) Since commencing exploration on the Gladiator Project in 2015, Bonterra has transformed a property with a small, high-grade gold deposit into a significant high-grade gold
discovery, with the clear potential for a multi-million ounce, high-grade mining operation.
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(click to enlarge) The Company hasn’t only been focused on drilling. On
March 30, 2017; BTR announced the acquisition of additional land around the Gladiator Project. The Trove Property significantly expanded Bonterra’s total land package in the Urban Barry Camp to the southwest of Gladiator, with smaller additional parcels also added.
Experienced mining investors are likely already asking a question: when will management initiate a new resource estimate at Gladiator? CEO Dhaliwal was firm but polite, “We’re in no rush, and no one is going to hold a gun to our heads here.”
In taking this position, Dhaliwal leans heavily on the experience of Dale Ginn, BTR’s VP of Exploration. Ginn has nearly 30 years of experience as a geologist. He has served in senior positions for several mining companies including founding two exploration and mining companies.
Ginn’s expertise has been invaluable in deciphering the regional geology. The result is that not only has Bonterra been able to fast-track exploration at Gladiator, it has done so in a very efficient manner. Very few of the Company’s drill holes have not encountered significant mineralization (and all drilling data is available
on-site).
Dhaliwal’s own background centers on company-building. He has been active in founding a number of companies, gaining invaluable experience in corporate development, corporate communications, and investor relations. Along the way he has also gained expertise in forging the business relationships which are so important in successfully developing a company.
Bonterra’s success at Gladiator has already been turning heads in the mining industry. On
March 27, 2017; the Company announced a $5.2 million strategic investment from Kinross Gold.
This is not the only household name in precious metals mining to take an active interest in participating in the Gladiator Project. Sprott Capital Partners were the lead underwriter for a $14 million bought-deal financing which closed on March 2, 2017. Sprott also participated as an advisor in the Kinross financing.
Given the institutional enthusiasm which already exists for the Project, it becomes much easier to understand why the Company is in no huge rush to push out another resource estimate. The goal is to expand and define the dimensions of the Gladiator Deposit to the point where BTR can demonstrate a resource of 2 million ounces of gold or more.
However, management intends to be guided by the drilling data. If the dimensions of the Gladiator Deposit continue to expand in the 2017 drill campaign then the Company might wait somewhat longer and aim for an even larger resource.
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Management strongly believes that Bonterra is still being undervalued in the market, with a market cap of just over $60 million. In part, this is a function of soft gold prices and some weakening of investor sentiment in recent weeks.
The reality is that gold market fundamentals are
stronger than ever. The current price of gold is below the full cost of production for the industry as a whole meaning that an upward correction in prices is inevitable. When that happens, gold mining companies will not simply reflect that increase, they will leverage that rise in price – as we saw through much of 2016.
Another way to illustrate the modest valuation for Bonterra’s assets is via a peer comparison. One candidate here would be Osisko Mining Inc. OSK is trading at a current market cap of approximately $900 million. Bonterra’s market cap is $60+ million, but the two companies have a similar mix of assets.
Bonterra has a second, advanced-staged project: Larder Lake. Larder Lake also has a resource estimate, split between the Bear Lake and Cheminis Deposits. Cheminis hosts approximately 275,000 ounces of gold in the Indicated and Inferred catagories. Bear Lake has an inferred resource of 683,000 ounces. However, the Larder Lake resource is not regarded as NI 43-101 compliant.
What are Bonterra’s longer term plans? The Company is not just another project generator. Rather, management views BTR as more of a “classic” junior exploration company. In this respect, Bonterra’s mandate is simple.
BTR is focused on identifying, acquiring, and developing highly prospective gold exploration properties. Its intent is to advance these projects in a manner which maximizes shareholder value as quickly and efficiently as possible. Dhaliwal offers some additional thoughts on the future of Gladiator and Bonterra itself.
In less than 18 months we have taken a forgotten asset in one of the richest gold camps in the world to one of the most exciting exploration and resource development plays in Canada. Since late 2015 when we realized the potential of Gladiator, we strategically increased our land position by 185%, raised close to $30 million with key investors, and accelerated the project on all fronts. We were able to expand the size of the project from a strike length of 250m and a historical known depth of 200m to over 1,200m in length and with high grade gold still being intersected at 700m depth. The grades, size, infrastructure, and management team were able to attract key investors such as Sprott, and more recently Kinross Gold as a strategic partner. 2017 will be a significant year for BonTerra on all fronts with multiple drill rigs turning and the development of what we believe will be a multi-million ounce gold deposit. We also continue our resource development program at our Larder Lake Gold Project, in Ontario to ensure we continue to build value for our shareholders. With gold prices still soft, mining investors are naturally focusing on high grade gold projects with significant blue sky potential. In 2017; few mining companies fit that description better than Bonterra Resources.
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