has world’s largest 2017 drill program
Richard (Rick) Mills
Ahead of the Herd
As a general rule, the most successful man in life is the man who has the best information
Seemingly not a single day goes by without a news release about another company staking claims and citing recent drill results from Osisko Mining Inc.’s (TSX:OSK) Windfall Lake Project (and their follow up discovery the Blackdog Project) as the reason why. This recent amazing success has created renewed interest in exploration in Northern Quebec, Canada and in the gold sector in particular.
The importance of Osisko’s discovery cannot be overstated in the context of Quebec gold exploration and the markets in general. This kind of good news excites the market for the entire junior exploration sector.
Also, area plays, where one company makes a discovery then dozens of other companies rush in to stake all around them, are one of the very foundations of our junior markets. Some noteworthy area plays are Hemlo in 1982, Eskay Creek in 1990, Lac de Gras in 1992, Voisey’s Bay in 1995 and the Yukon’s White gold rush in 2010.
Osisko’s drill assay results are the most significant gold intercepts ever reported in the Urban Barry Gold Camp and very possibly the best new gold discovery in Canada since the Yukon’s White Gold Rush area play that got underway in 2008/2009 and literally exploded into investors consciousness in 2010.
I alerted my readers to the developing gold rush in Canada’s Yukon Territory and said, in my opinion buying Underworld, Atac and Kaminak over the winter of 2010 and holding till fall 2010 drill results should work out very well.
Kinross bought out Underworld Resources (TSX.V:UW) in March 2010 (the transaction valued the fully-diluted share capital of Underworld at C$139.2 million). ATAC Resources Ltd. (TSX.V:ATC) went from a dollar a share in January to over $8. Kaminak Gold Corp. (TSX.V:KAM) entered into a buyout agreement with Goldcorp Inc. (TSX.G) for $520,000,000 in May of 2016.
As the story of the Urban Barry Gold Camp unfolds I believe we can expect exciting times for those investors who get involved with the various companies participating in, what still are, the very early days of what is a developing area play around Osisko’s Windfall Lake Project.
Urban Barry Gold Camp
Located in a newly emerging gold district in Quebec, Canada, the Urban Barry Gold Camp has the potential to generate massive news flow for many years as field crews are mobilized to northern Quebec. We all know news flow is the life blood of junior resource companies and news flow will be constant from the almost dozen or so companies so far involved.
Osisko’s Windfall Lake discovery has sparked a land rush, there are an increasing number of savvy explorers and market players staking whatever land they can get surrounding the discovery area. A select few companies will be buy and hold for drill results and many others will present trading opportunities.
Given very legitimate, and increasing daily concerns about increasing country risk, China’s growing aggression, U.S. President Trump being under investigation by the FBI for collusion with Russia in fixing the U.S. Presidential elections (if proved true it’s impeachable - it’s treason, and many would consider it an act of war against the U.S. by Russia), a simmering middle east, a nuclear North Korea and two nuclear armed bitter enemies, India and Pakistan, duking it out over the Kashmir, the far right set to win European elections, the upcoming Brexit vote and sustained negative real interest rates makes this an extremely timely article about what is going to be a truly exciting, result orientated news generating gold area play.
Canada’s Province of Quebec is one of the most geologically prospective and pro-mining jurisdictions in the world today. And all the elements needed to kick off a new area play are here:
- A spectacular new discovery (and follow up discoveries by others) that is truly world class in grade and size.
- A discovery with a new geological twist or surprise.
- A jurisdiction with safe and reasonable tenure that’s amenable to mineral exploration and development.
The Windfall Lake area play junior players are gathering in the Urban Barry Gold Camp for what could be one of Canada’s most important gold discoveries in almost a decade. There is huge upside potential in any of these juniors if they make another discovery. One good drill hole could spark investors imaginations and send their (and their neighbors) share price soaring.
And, if there is a new geological model at play, like there was in the Yukon’s White Gold Rush, this would open up a whole new chapter in Abitibi Gold Belt exploration and in particular the Urban Barry Gold Camp.
Geology and Mineralization
The White Gold District lies within the Tintina Gold Belt (a 200-km-wide, 1,200-km long arc extending from northern British Columbia into southwest Alaska) and is underlain by rocks of the Yukon-Tanana geologic terrane.
The Tintina Gold Belt includes such large gold deposits as Pogo (3.6 M ozs P & P reserves), Fort Knox (3.8 M ounces P & P reserves, 1.7 M ozs M & I resources), True North and Donlin Creek (29.3 M ozs Au Proven & Probable reserves, 6.0 M ozs Au Measured & Indicated resources).
In late 2009 early 2010 no one had yet defined a geological model for the White Gold occurrences because the geology of the Underworld discovery was different than other discoveries in the Tintina gold belt. This was extremely significant because it meant broad areas that had seen scant attention during past exploration efforts would now become the focus of intensive work programs that had a very real potential for success.
I was correct to focus on this area of the Yukon and my expectations for more discoveries, which would attract the major gold mining companies, was proven out with Kinross (TSX:K), Goldcorp (TSX:G) and Agnico-Eagle (TSX:AEM) coming to the party.
Game on
The Abitibi gold belt stretches from Wawa, Ontario to Val-d’Or, Quebec and has hosted over 100 mines producing some 170 million ounces of gold since 1901.
The Urban-Barry Greenstone Belt has an east-west extent of 135 kilometers and is anywhere from 4 to 20 kilometers wide. This greenstone belt hosts significant gold mineralization in several parallel NE to SW trending zones (3 known gold deposits with NI 43-101 measured resources and numerous gold showings).
Osisko Mininghas invested in the Abitibi since 2010 and is currently the largest stakeholder in the Urban-Barry Greenstone Belt. Osiskos crown jewel is their Windfall Lake Gold deposit.
“We’ve unravelled the geology of this deposit (Windfall Lk. – Rick). It’s not like any other deposit in the Abitibi … it’s not a shear-hosted vein system, which is what people had classified it as. It’s an intrusive-hosted pyrite system.” John Burzynski, Osisko Mining’s president and CEO
At Windfall Lake gold-bearing pyrite stockwork mainly consists of pyrite stringers with minor tourmaline needles - the stringers are typically less than 1 centimeter in thickness and are oriented in several directions.
Most gold mineralization is found in the Main zone, a southwest to northeast trending zone where gold mineralization occurs in several stacked sub-vertical, northeast-trending lenses measuring between 2 and 35 meters in horizontal thickness.
In August, 2016 Osisko announced a discovery 3.7 km west of the main Windfall deposit that the company calls it’s Fox discovery. The Fox discovery has the same geology, mineralization and alteration as OSK’s Windfall deposit.
“What Windfall represents is not a deposit or a camp. We actually think we have a district here.” John Burzynski
The current (2015) 43-101 compliant Windfall Lake mineral resource comprises 2,762,000 tonnes at 8.42 g/t Au for 748,000 ounces of gold in the indicated category and 3,512,000 tonnes at 7.62 g/t Au for 860,000 ounces gold.
The ongoing 12 rig, 400,000 meter drill program, combines definition drilling above the Red Dog intrusion, expansion drilling above and below the Red Dog, expansion drilling to the NE of the main deposit, and exploration drilling on the greater deposit (deposit remains open along strike and at depth) and Urban-Barry Project area. Currently OSK has over 130 different drill targets property wide.
Osisko expects to reach the feasibility study stage in mid-2017, with permitting in early 2018. Once permitting is complete, the company expects to begin Windfall Lake mine construction in 2019.
At the time of writing this article Osisko was trading at $4.38 per share with 183 million shares outstanding.
The Players
The Urban Barry Gold Camp has become an investment hotspot as other juniors attempt to capitalize on Osisko’s good fortune.
Let’s take a look at a few of the other companies that are involved. In alphabetical order they are:
Beaufield (TSX.V:BFD) - Beaufield owns a 100% interest in the Urban property. The Golden Retriever block is the geological strike extension of Osisko Mining’s Black Dog property and their ET Zone is surrounded on three sides by Osisko Mining’s flagship Windfall property. At the time of writing this article Beaufield was trading at 0.16 with 175 million shares outstanding.
Bonterra Resources Inc. (TSX.V:BTR) – Bonterra’s Gladiator 8,126-hectare project has an inferred resource of 905,000 t @ 9.37 g/t Au for 272,637 ounces of gold and is located just east of Windfall Lake. Drilled dimensions of the Gladiator Deposit as currently outlined is a depth of 800 meters below surface, and a strike length of 1,200 meters (1.2 km). Gladiator remains open in all directions with at least five distinct subparallel zones or mineralized horizons identified to date.
Currently there is a resource expansion and development program underway utilizing a minimum four drill rigs with up to 40,000 meters of drilling planned.
Kinross Gold Corp. is an early major mining company investing in the area, as they did in the Yukon, with a $5,200,000.00 investment into Bonterra Resources Inc.'s to own around 9.5% of the junior. This, after Sprott Capital Partners participated in a major financing in February/March 2017.
Bonterra is well financed with close to $15M in its treasury.
At the time of writing this article Bonterra was trading at 0.345 with 91 million shares outstanding.
Great Thunder Gold (TSX.V:GTG) – Great Thunder’s Urban Bolt (tentative name) property is 1,127 hectares and is located 12 kilometers northwest of Metanor Resources Inc.'s Barry gold deposit, 15 kilometers west of Osisko Mining Inc.'s Windfall Lake gold deposits, and 18 kilometers west-northwest of Bonterra Resources Inc.'s Gladiator gold deposit.
GTG’s Urban Bolt property lies in a similar structural setting as the Gladiator gold deposit and is underlain by rocks similar to the Windfall Lake and Barry gold deposits.
Great Thunder’s second property, Urban Thunder (tentative name), is 5,212 hectares adjoining Osisko Mining, Beaufield Resources and Melkior Resources properties along strike and is adjacent to Osisko's Black Dog project.
Osisko’s Black Dog project is a gold-silver-copper discovery coinciding with magnetic and electromagnetic anomalies. Osisko news releases indicates that a portion of their recent exploration success on the Black Dog Project has been because they have been targeting electromagnetic anomalies.
 | A 1993 geophysical survey filed with the Quebec government identifies a significant conductive trend (conductor trend in gold - Rick) with associated electromagnetic anomalies south of Osisko’s Blackdog. The electromagnetic signature of the conductor was described within the 1993 report as "... a long formational trend ... [that] does not conform with any of the geologic maps of the region, obviously indicating a complete re-assessment of the rocks in this region will be needed." |
Great Thunder’s Urban Thunder property covers the northern half of the conductor described in the ’93 report.
At the time of writing this article Great Thunder Gold was trading at 0.075 with 29.5 million shares outstanding.
Melkior (TSX.V:MKR) - Melkior Resources Inc. has acquired 33,800 acres in the Urban area. The claims are located south of Great Thunder Gold’s claims. According to its latest news release Melkior remains committed to implementing an exploration program this spring on another project, its flagship Carscallen project. The drilling contract has been awarded, pending the permitting process, to begin in the later part of May, 2017. At the time of writing this article Melkior was trading at 0.05 with 141 million shares outstanding.
Metanor (TSX.V:MTO) – Metanor’s Barry Project has previously been mined - 624,414 tonnes of ore grading 2.2 grams per tonne for 43,970 ounces of gold was extracted from three pits. A positive preliminary economic assessment (PEA) was published in 2016 demonstrating the economic potential of the open-pit mine to produce more gold. A drill campaign is under way on the Barry property to increase mineral resources. At the time of writing this article Metanor was trading at 0.065 with 438 million shares outstanding.
Considerations
Osisko Mining Inc. (TSX:OSK), as the originator of the area play with their Windfall Lk. Project and follow up discovery Blackdog, and a massive 2017 drill program, will continue to be the Windfall Lake area play leader. But at over $4.38 a share you need close to $9 just to double. It is of course possible, and even more, but I personally don’t play at those market caps.
Bonterra Resources Inc. (TSX.V:BTR) is, in my opinion, a good buy and hold till fall. They have a large drill program for 2017, they are aggressive on the acquisition front (they just bought Durango’s Trove property for what looks like a very good deal for BTR’s shareholders), Kinross and Sprott are believers, and BTR is aggressively telling their story. Bonterra’s management obviously understands how to get, and hold, investors attention.
But here’s what I find most interesting regarding this area play. The unexplained, unexplored conductor on both Great Thunder Gold (TSX.V:GTG) and Melkior (TSX.V:MKR) claims. If they were smart the two would fly a joint airborne survey over the total length of the conductor on both properties. An airborne survey has never ever killed a project, usually it’s exactly the opposite. I fully expect a lot of world class looking targets in what is an area play ripe to explode into investors consciousness in 2017 much like the Yukon White gold Rush play did in early 2010. I’m buying shares of GTG in the market because of their better share structure versus MKR’s.
Conclusion
Area plays flourish because new discoveries rekindle faith in the rags-to-riches story our junior resource sector is built on. History has proven time and time again that junior exploration stocks can write a very exciting discovery story and reward investors with multiple returns on their capital.
Whatever the future holds for the Windfall Lake area play, the Urban Berry Gold Camp and the junior resource companies involved there’s no doubt that with all the above listed companies gearing up for exploration and drilling it’s going to be a busy spring, summer and fall for most participants.
With gold US$1,243/Cdn$1663 per ounce (at the time of writing) the time line to get work initiated will be fast-paced. The Urban Berry Gold Camp will undergo one of, if not the largest exploration and drill programs anywhere in the world in 2017. Exploration and assay results will pour in through the latter half of 2017, well into 2018 and beyond.
Industry observers, your author included, are extremely optimistic that additional gold deposits await discovery.
It is still very early days in the Windfall Lake Area Play and the greatest rewards lie ahead of us. The Windfall Lake area play in Quebec’s Urban Barry Gold Camp, outside the box geological modeling, massive exploration and drill programs generating news for years, selecting participating junior’s after careful due diligence and having the patience to let the story play out over the coming months should be on all our radar screens.
Are they all on yours?
If not, they should be.
Richard (Rick) Mills
aheadoftheherd.com
Richard has not accepted payment from any company mentioned in this article. Richard will not sell any Great Thunder Gold (TSX.V:GTG) shares for one month after publication of this article.
This document is not, and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified.
Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.
Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.
Do your own due diligence. You, and you alone, are responsible for your investment decisions.