Opportunity is knocking.
That certainly seems the case for
Dunnedin Ventures (TSX.V: DVI) – whose management knows how important it is to play to their strengths and to capitalize on the fruits of hard work and good fortune.
So Dunnedin is switching gears (for now) and pivoting in a new direction to capitalize on dynamic new opportunities and to re-invigorate the company’s shareholder base.
Dunnedin CEO Chris Taylor examines a sample from the Trapper copper porphyry property in BC
Even though Dunnedin has enjoyed some moderate success so far in its hunt for diamonds in Nunavut, the quest for a company-maker discovery is going to take time. There are too many potential drill targets to explore all at once.
Fortunately, Dunnedin is a savvy publicly-traded company that understands the importance of giving its patient investors some good reasons to keep the faith. The most obvious deliverable in this regard will be the optimization of the company’s intellectual capital going forward.
In other words, Dunnedin’s CEO, Chris Taylor, is looking to build some near-term value into its deflated share price by capitalizing on his talent for solving hard rock geological puzzles.
To this point, he heads up the geological team that recently unlocked the value in the Dixie Lake gold project in Red Lake, Ontario. This high-grade gold deposit is being unearthed by Dunnedin’s sister company,
Great Bear Resources, which also benefits from Taylor being its CEO.
To date, Great Bear’s share price has appreciated more than ten-fold since Great Bear first struck pay dirt by figuring out the geological controls of an emerging gold deposit. Much of the company’s success can be attributable to Great Bear’s painstaking consolidation of a patchwork of gold properties tracing a 10-kilometre-long gold trend and spanning nearly 10,000 hectares.
This is what lead to a world-class gold discovery in a world-class gold belt – and at the heart of Canada’s richest gold fields in the famous Red Lake Mining District. It’s also well-trodden territory where previous explorers had failed to connect the dots – unlike Great Bear.
This represents a very significant competitive edge for Dunnedin.
Hunting Down a World-Class Copper-Gold Porphyry Deposit in “Elephant Country”
Now Taylor is embarking on a similar strategy to the one that led to extraordinary success for Great Bear. As a structural geologist, Taylor cut his teeth drilling Imperial Metals for what has become the Red Chris copper-gold porphyry mine in BC.
This skill set is of particular value to DVI shareholders as Chris and his team pursue other world-class copper gold deposits in BC. He has amassed a large land position, now known as the MPD Property, in southern British Columbia. This constitutes an amalgamation of three separate exploration project areas previously owned by other explorers, now encompassing 7,850 hectares.
Most notably, the project sits at the heart of a famous gold-copper porphyry belt that hosts a number of world-class, elephant-sized copper-gold mines. They include Highland Valley, Copper Mountain and New Afton. Also, there exists excellent infrastructure in this mining camp, including a network of highways and roads that offer easy access to the MPD project area.
What’s most important here is that these now-unified exploration fields reveal the full extent of a large mineralized system that has never been systematically explored before – and certainly not at depth.
Starting this spring, Dunnedin expects to embark upon a small exploratory drill program to better define the structural controls of this copper/gold mineralized system. This includes drilling below the 200-metre level, which is about as deep as this property has ever been properly probed before. The current theory is that grades improve beyond this relatively shallow “open-pittable” mining depth.
Oxidized stone from Dunnedin’s Trapper copper-porphyry property
In fact, a total of 129 drill holes spanning the three different previous project areas now offer Dunnedin a wealth of geological data points to inform future drilling plans. Many of these drill holes intersected grades that compare favourably with nearby operating mines.
Furthermore, there exist numerous untested geophysical and geochemical copper-gold anomalies on the property that have yet to be tested, many of which are in close proximity to known discovery zones. Additionally, there are copper showings at surface across an expansive area of 10 square kilometres, suggesting the presence of plenty more tantalizing drill targets.
Claudia Tornquist, President of Dunnedin, sees MPD as being a prospectively very valuable asset going forward once her company starts to probe for its richest mineral concentrations.
“MPD is a quality project with immediate exploration upside and the potential to yield a major copper-gold porphyry system,” she says. “What we are doing is advancing a known mineral discovery this is undervalued and has the geological characteristics that can drive rapid value growth for investors when modern exploration methods and management’s experience is applied.”
Re-establishing Strength Through Diversification
Elsewhere, Dunnedin is creating a suitable environment for year-round news flow with the more recent acquisition of the Mohave copper-molybdenum-silver porphyry project in Yavapai County, Arizona.
According to a Dunnedin news release on March 3rd: “Mohave has the potential to host a large-scale copper porphyry deposit with silver and molybdenum credits. Its geology is considered analogous to Freeport McMoran’s (NYSE: FCX) Bagdad copper porphyry mine which is located approximately 33 kilometres to the east of Mohave.”
The final hard rock asset in Dunnedin’s porfolio that is expected to see active news flow this year is the advanced-stage Trapper copper-gold porphyry project in northern British Columbia. It spans 3,756 hectares in the richly-mineralized Golden Triangle and has significant size potential, as well as plenty of historic drill holes to guide further exploration work.
Highlights of a 2011 drill program undertaken by a previous project operator intersected grades as high as 1.71 g/t of gold over 34.1 metres.
Accordingly, Dunnedin may yet invite the participation of a major mining company to fully explore this property’s potential to become a sizeable, high-grade copper-gold deposit. This will allow Dunnedin to offset exploration costs to a third party that will have to “earn-in” on its ownership of any emerging discovery.
Investment Summary
Dunnedin plans to resume drilling for new diamondiferous discoveries this summer in Nunuvat. So investors who are excited about the involvement of Dr. Chuck Fipke -- the world’s most famous diamond hunter – do not have to worry about Dunnedin losing its focus.
However, in a tough market for mining stocks, it is shrewd for Dunnedin to diversify into other cost-efficient exploration projects that offer additional opportunities for world-class discoveries. And with the guidance of a CEO who has already hit the ball out of the park in Red Lake with a world-class gold discovery, Dunnedin’s prospects look very encouraging.
Once again, it cannot be over-emphasized that the kind of geological detective work that Taylor and his team excel at represents a secret weapon of sorts. It demonstrates the ability to succeed via the systematic modelling of large mineralized systems to determine where economic copper and gold values are most densely concentrated.
On a technical note, the company has approximately 130 million shares outstanding (which is actually a relatively tight share structure compared to most mining juniors these days). This reality, when matched with the advent of a steady flow of upbeat news year-round, should provide positive impetus to Dunnedin’s over-sold share price.
In fact, investors should expect continuous news from several different exploration fronts, including the advanced-stage Nunavut diamond project and the similarly extensively drilled MPD copper-gold project.
In particular, Chris Taylor aims to prove that his exploration team’s savvy geological detective work also has the potential to work wonders at Dunnedin’s new hard rock assets, starting at MPD this spring.
ABOUT THE AUTHOR:
Marc Davis has a deep background in the capital markets spanning 30 years, having mostly worked as an analyst and stock market commentator. He is also a longstanding financial journalist. Over the years, his articles have also appeared in dozens of digital publications worldwide. They include USA Today, CBS Money Watch, Investors’ Business Daily, the Financial Post, Reuters, National Post, Google News, Barron’s, China Daily, Huffington Post and AOL.
FULL DISCLOSURE: Dunnedin Ventures is a client of Stockhouse Publishing.