The resources market has changed and we all know it. The last commodity downturn was a defining moment for junior explorers when the investment community zipped up its collective purse and many small investors left the sector all together. Now that gold is seeing a relatively solid northward trend, what’s left of the resource investment community is coming back to play, but this time, they’re looking for hard answers, not the song-and-dance promises made by less-than scrupulous stock promoters who learned their tricks in the Bre-X days. So juniors have been forced to put up or shut up when it comes to material milestones and fiduciary responsibility to shareholders.
While a vast majority of juniors withered under scrutiny, were bought out or went bankrupt, BonTerra Resources (TSX: V.BTR, Forum) dug in, got real with its books and quietly continued to make significant developmental progress on its Gladiator and Larder projects located in a storied section of the Abitibi subprovince which spans Ontario and Quebec. This highly prolific region has produced over 100 mines, including one of Canada’s biggest gold mines, the Kerr Addison Mine. Since commercial production commenced in the Abitibi Gold Belt back in 1901, the area has offered up over 180 million ounces of gold.
Nav Dhaliwal came on board as a consultant in 2009 when BonTerra Resources had floundered. Dhaliwal set out to make what they had, work. Dhaliwal had been looking in the storied Urban Barry Camp located in the Souart and Barry Townships of Québec. The Urban Barry Camp is currently the focus of mining major Osisko as the company feels this region could become the next big gold camp in Quebec. Dhaliwal knew this is where BonTerra should focus as well.
His first target was the Coliseum Project which was to grow with additional acquisitions into the Gladiator Project. After successfully negotiating the Arena acquisition, Dhaliwal raised approximately $600,000 in equity financing as well as completing a share for debt transaction that wiped approximately $700,000 of debt off the books. To make real change however, Dhaliwal had to take the bull by the horns, so in 2012, he grabbed the reins of BonTerra as CEO.
This is where the job gets hard. Sure you can poke holes in a company when its business plan isn’t functioning, but it takes a real leader to open the books, see the disaster for what it is and immediately, without waver, launch a painful, but necessary and effective campaign to successfully change course and regain shareholders’ faith in the corporation. Dhaliwal looked under the hood of BonTerra and made some serious decisions. First, he knuckled down and bit the bullet on the company’s stock. A 20-1 rollback is a hard sell for any CEO, but Dhaliwal did the road tour and convinced seasoned shareholders his move was in everybody’s best interest.
Then in 2014, Dhaliwal entered the board room with a broom, sweeping out the Directors and replacing them with industry experts like Dale Ginn, B.Sc., a thirty-year veteran mining executive and storied geologist. Dhaliwal and Ginn bookend BonTerra’s management team with corporate ingenuity and geological expertise.
Dhaliwal built his market acumen, networking skills and industry smarts from years of operating out of junior miner collective offices where sometimes eight companies would share a space, exchanging ideas and experience. Ginn was a major part of San Gold as its founder and CEO until 2010. He was instrumental in the start-up and operation of the Rice Lake Mine Complex as well as in the discovery of the Hinge and 007 gold deposits. These finds are considered some of Manitoba’s largest gold discoveries.
In 2015, both Dhaliwal and Ginn really got things going at Gladiator by launching Phase 1 of a two-phase drill program. Ginn explained, “We started with four land-based holes, because of the time of the year, but it was enough to get us rolling.”
Results were so positive that BonTerra was able to go back to the market in late December 2015 to raise $3.4 million in financing to complete the second phase, “There was a lot of flow-through, hard dollars were hard to come by, but we had the likes of US Global’s Frank Holmes as one of our guys; CMP Investment Partners as well. Also, Osisko came in for 19.9% and took a board seat. It’s an honor to have such big players involved with us, especially at that infancy stage.”
Ginn continued, “Then once freeze-up came, we really stepped out and added 450 metres of strike length. I don’t think we had any misses over nineteen holes.”
At the completion of the two-phase program, the company had drilled for a total depth of 8,300 metres. Sixteen holes had visible gold, with assays including 137.4 g/t gold over 2.5 metres, 24.3 g/t gold over 5.7 metres and 29.0 g/t gold over 3.3 metres. BonTerra had grown the Gladiator Deposit, 300,000 oz at 9g/t, to the west by an additional 450-metre along strike as well as another 450-metre deep. Dhaliwal, Ginn and French geologist Robert Gagnon had resurrected BonTerra’s reputation and made the once idle miner into a major going concern. Which brings us to…
Back in the spring, Dhaliwal knew the market was still ripe for BonTerra to pick up cheap ounces in the ground, “Dale Ginn is a walking Wikipedia of mining knowledge and has the ability to sniff out premium projects that escape others’ observation. He came back to me and told me he was in love with this Bear Property.”
Ginn went into detail, “The Bear Property sits in the Kirkland/Larder camp and it’s right on the Kirkland/Larder Break which hosts the Kerr-Addison Gold Mine immediately to the east. Now if you remember, the Kerr-Addison mine produced almost 11 million ounces. Also, you have Yamana/Agnico-Eagle’s Kirkland Lake Gold mine immediately adjacent to us on the west and then further on you have the Macassa mine. Exploration-wise, it was the last decent-sized package on an established belt like that.”
Bear Lake Gold made the Bear discovery at the Larder Lake Project late in 2007. Then in 2012, Gold Fields picked up a $40-million-dollar option for 60% of the Larder Lake. Before Gold Fields shelved their exploration programs across the globe in 2013, they had done about $6.0 million in work on the property. Kerr Mines picked up the Larder Lake Project in 2014 with just under 1.0 million ounces at 6 g/t gold and a mass of drill results that had yet to be tabulated, but Kerr was focused on its Copperstone mine in Arizona. Nav capitalized on opportunity and snapped up the property from Kerr for $500,000 and 10.0 million common shares in BonTerra.
Okay, some of you might remember a wing nut geologist coming out of the Larder Lake Property who played with the numbers and got caught. Dhaliwal was quick to assure investors that the 43-101 currently on the Property has been thoroughly scoured by the IIROC and was found to be bulletproof. Dhaliwal excitedly added, “We still have that terabyte of information from the work left behind by Gold Fields. That’s 25,000 metres of drilling yet to be put to our report which could potentially add some significant numbers to our reserves. So we definitely got something happening outside of the Urban-Barry as well.”
Ginn added, “Larder Lake is the perfect sleeper. It got swallowed up into Gold Fields’ portfolio, no one ever really knew about it and it bears such great opportunity.”
Good news for investors is BonTerra is cashed up after having just closed an over-subscribed $5.0 million PP in the first week of July which they are ready and willing to deploy. That means more drilling, more results and more target identifications as Ginn explained, “In the late summer/fall we’re primarily going to move eastward on the other side of Spartacus Deposit, go a little deeper and fill in some of the gaps. Again, those will be land-based targets.”
He continued, “There will more exploration as well. There’s two parallel host units that look identical to the one we’re in at Gladiator. So we’re going to touch on those. Then there’s some geophysical and geochemical work to be done on our Coliseum Property off to the west which is intended to zoom in and extend the same trends that the Gladiator is showing us.”
There will also be an update to the Larder Lake Property 43-101 report with the hope of surpassing the million-ounce mark. Also, Dhaliwal will continue evaluating more interesting acquisitions that would cheaply add good shareholder value.
Investors may also be interested to hear that BonTerra is tightly-held with approximately 50% of the share base held by insiders and management including industry heavies like Osisko Mining, U.S. Global Investors, Sprott, , SIDEX, & Dundee/CMP Fund. The company’s balance sheet is strong with no debt. Management and Board are stacked with over a century of experience including Jose Vizquerra-Benavides, M.Sc., Vice President at Osisko Mining, Robert Gagnon, Geo., President of the Association des prospecteurs du Nord du Quebec and last but certainly not least, Richard Boulay, B.Sc, 40-year industry veteran who has successfully operated as an exploration geologist, mining analyst, project financing banker and public company executive. Most Boulay’s geological experience has been in the mineral exploration and mining industries. He has extensive experience in exploring, developing and financing Archean shield gold systems in Quebec, Ontario and Manitoba. In fact, his initial exploration experience was gained while based in Val d’Or, Rouyn and Chibougamau. Boulay was also a founding director of San Gold Corporation in 2005 and its first Chief Financial Officer, resigning as a director in 2011 following San Gold’s increase in market capitalization from $6 million to $1.4 billion.
With an aggressive leadership that remained active during the downturn, a tightly-held share base, a strong balance sheet, a proven asset base as well as large resource growth potential in a prolific mining-friendly jurisdiction, BonTerra is steadily building significant shareholder value based on real material change, not a flurry of well-worded but essentially meaningless news releases meant to move stock. If BonTerra keeps on track, it may very well be behind Quebec’s next big gold discovery, possibly netting its shareholders a once-in-a-lifetime ROI opportunity. Don’t take my word for it however. As always do your due diligence before making any investment decision.
--Gaalen Engen
FULL DISCLOSURE: BonTerra Resources is a Stockhouse Publishing client.