A prospector who staked an Ontario gold discovery that is being aggressively drilled by
Probe Mines Ltd. (
TSX: V.PRB,
Stock Forum), thinks the company is a definite takeover candidate.
“It looks like they will be taken over by a major,’’ Jacques Robert told Stockhouse during the recent Prospectors and Developers Association of Canada conference in Toronto.
Robert, along with partners Mike Tremblay and Probe Mines’ CEO David Palmer were recently recognized for the Borden Lake discovery when they took home the Ontario Prospectors Association’s 2013 Award.
Estimated to host over 4.3 million ounces of gold, averaging 1.03 grams gold per tonne, Borden Lake is already being compared with the Hemlo, Ontario, discoveries of the early 1980s.
A 30-year veteran of the prospecting business, Robert is basing his optimism on the recent discovery of high grade mineralization and the fact that Borden discovery is located right beside a highway, which would presumably lower the cost of future development.
The find is predicated on a geological formation called the Kapuskasing Structural Zone, which had not previously been known as a hunting ground for gold discoveries.
Shares of Probe have been on an upward trajectory since April, 2013, after the company announced that drill crews had identified high-grade gold mineralization 500 metres along strike from the previous limits of the deposit.
“Results suggest that the scope of the deposit is changing significantly, with a focus towards high-grade resources that may persist for a considerable distance along strike,’’ the company said at the time.
In April 2013, Probe shares were trading at around the $1 level. They have since jumped to $3.70, leaving the company with a market cap of 280 million, based on 75.5 million shares outstanding. The 52-week range is $3.74 and $1.10.
Prior to the discovery of high grad mineralization, company officials thought they were looking at a low-grade bulk tonnage scenario that would be amenable to open pit extraction methods, said Karen Willoughby, a spokeswoman for Probe.
But she said things have changed since the discovery of higher grade material, allowing the company to consider other potential development scenarios, including underground mining.
With 8 drills now active on the property, the company plans to spend over $12 million on exploration this year, said Willoughby. She told Stockhouse that Probe is attracting a lot of interest from major mining companies, but declined to name any of those involved.
Speculation is rife that Probe might eventually be swallowed by
Agnico-Eagle Mines Ltd. (
TSX: T.AEM,
Stock Forum), which owns just under 10% of the company.
Meanwhile, other juniors have joined the race to explore for gold along the Kapuskasing Structural Zone. They include
Kapuskasing Gold Corp. (
TSX: V.KAP,
Stock Forum), which is exploring on the Borden North property, about 50 kilometres to the northeast of Probe’s Borden Lake project.
Borden North was brought to Kapuskasing Gold – formerly known as Olympic Resources Ltd. -- by some of the same prospectors who participated in Probe’s Borden Lake discovery. They include Mike Tremblay, Jacques Robert, and his partner Randall Salo.
Kapuskasing was unchanged at 7 cents Tuesday, leaving a market cap of $1.2 million, based on 17.6 million shares outstanding. The 52-week range is 11 cents and 2 cents.
Elsewhere,
Nikos Explorations Ltd. (
TSX: V.NIK,
Stock Forum) is exploring the Borden Lake Extension property, which covers 1,598 hectares and is located five kilometers to the southeast of Probe. On Tuesday, the junior saw its stock market valuation jump 82% to 10 cents.
At current levels, Nikos is trading with a market cap of $1.1 million, based on 10.7 million shares outstanding. The 52-week range is 12.5 cents and 2.5 cents.
Under an agreement announced in December, 2012 Nikos secured an option to earn a 100% interest in the Borden Lake Extension Project. In return, it was required to issue one million common shares, make cash payments to the vendor of $100,000 and spend $340,000 on exploration.
Meanwhile, prospectors Tremblay and Robert each received cash and stock payments, including 175,000 shares of Probe Mines each, as payment for the Borden Lake claims.
The payment package included a 2% net smelter royalty, half of which can be reacquired by the company for a payment of $1 million.
“It was a dream come true,’’ said Robert when asked what the Ontario Prospectors Association award had meant to him. “It confirms your prospecting ability.’’