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TABLE OF CONTENTS Nov 26 - Dec 2, 2012 Volume 98 Number 41 - 0 comments

Temex buys blue sky at Juby

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By: Trish Saywell
2012-11-26

Mergers and acquisitions are heating up in the mining-friendly province of Ontario, with Iamgold’s (IMG-T) acquisition in June of Trelawney Mining and Exploration and the proposed friendly takeover of Queenston Mining (QMI-T) by Osisko Mining (OSK-T) announced mid-November.  

One company that is picking up more ground in the area is Temex Resources (TME-V). The junior explorer announced acquiring a large block of claims from Goldeye Explorations (GGY-V) that surround its Juby gold project, including Goldeye’s 40% stake in the claims making up the Juby joint-venture property, in which Temex holds a 60% interest.

Temex’s 1.8 million oz. Juby project is 45 km southwest of AuRico Gold’s (AUQ-T) Young-Davidson mine and 70 km east of the Côté Lake deposit that Iamgold recently acquired when it took over Trelawney. The project, about 100 km southeast of Timmins, sits on the southwestern extension of the Larder-Lake Cadillac fault zone.  

The transaction with Goldeye increases Temex’s 100% ownership around Juby tenfold, from 1,343 acres to 14,423 acres, and would allow more efficient and aggressive exploration.

“It’s a major consolidation, and we’ve been hoping to get it done for a long time,” Temex president and CEO Ian Campbell explains in a telephone interview. “It’s a big deal for us. We’ve added tremendous blue sky exploration potential, as well as consolidated our ground around our main Juby resource, so we can accelerate expansion drilling.”

Geologist and mining specialist at Euro Pacific Canada in Toronto Christina McCarthy agrees. “This is a big milestone for Temex because they just added an additional 5 km to their property, this is an overall property increase of about 1,000%,” she writes in an email. “There is a very good possibility that Temex will expand the potential size of the mineralized footprint along strike and increase gold ounces. Temex already has 1.8 million oz. gold, which is huge for a junior company. It’s just one of those stories that is under the radar. Newmont tried to get this property back in the day, but they were unsuccessful.”

 The Juby main zone contains indicated resources of 22.3 million tonnes grading 1.30 grams gold for 934,645 contained oz. gold and 28.2 million tonnes grading 1 gram gold for 905,621 contained oz. gold in the inferred category, using a 0.4 gram gold cut-off.

Campbell says Temex has a budget of about $7 million for exploration between now and the end of next year that will be spent on “aggressively” growing resources at Juby and its Whitney project, a 60-40 joint venture with Goldcorp in the Timmins camp. Two drills are mobilizing to the project area for a 10,000-metre drill program, which would include infill and expansion drilling on the Juby main zone resource, the Juby lease property and the Golden Lake property, as well as exploration-target testing. The program is expected to carry into next year.

Some of the new ground Temex has acquired around Juby lies on the Tyrrell structural zone (TSZ) — a major structural feature that it says is geologically similar to the Cadillac-Larder Lake fault zone. Major gold zones 4 to 5 km on strike west of the Juby main zone on the TSZ include Big Dome and Hydro Creek.

Drill intersections at Big Dome included 217.5 grams gold over 2.1 metres, 13.1 grams gold over 3 metres and 80.7 grams gold over 2.1 metres. At Hydro Creek, notable intercepts included 5.89 grams gold over 12.50 metres, 3.58 grams gold over 20 metres and 4.28 grams gold over 14 metres.

The Juby main zone deposit is open at depth and along strike to the west on the Golden Lake property, where Temex recently reported drill intersections of 0.74 gram gold over 129 metres, 1.21 grams gold over 31 metres, 3.24 grams gold over 8.3 metres and 34.31 grams gold over 1.5 metres.

Meanwhile, about 100 km northwest of Juby at its Whitney project, Temex and joint-venture partner Goldcorp have carved out a resource on the Upper Hallnor deposit of 3 million tonnes grading 2.44 grams gold for 234,300 contained oz. gold in the measured category, 8.8 million tonnes of 1.97 grams gold for 555,900 oz. gold in the indicated category and 4.1 million tonnes grading 1.82 grams gold for 241,000 oz. gold in the inferred category, at a cut-off grade of 0.30 gram gold.

The Whitney property contains the past-producing Hallnor-Bonetal and Broulan Reef mines. (The Hallnor mine was the highest-grade gold mine in the Timmins gold camp, producing 1.7 million oz. gold at an average grade of 13.71 grams gold.) 

Ongoing exploration at Whitney, which stretches for 8.7 sq. km, includes further resource-definition drilling within the current open-pit outline west of the proposed pit, where mineralization is still open. A 10,000-metre program will focus on the Upper Hallnor-Bonetal mines. Temex is also planning a 25,000-metre drill program on the Broulan Reef and C zones.

In addition to Whitney and Juby, Temex’s Gowganda silver project has an indicated resource in tailings piles of 1.94 million tonnes grading 47.5 grams silver per tonne for a contained resource of 2.96 million oz. silver in the indicated category. The junior also is earning a 100% interest in the Croxall property, in the west Timmins gold district, which covers 3 km of the Porcupine-Destor fault zone. Lake Shore Gold’s (LSG-T) Thorne property hosts the Gold River zones that trend eastward onto the Croxall property. 

Temex is well financed for the next 12 to 24 months after an equity financing raised $8.9 million. The junior has also added heft to its boardroom, appointing Greg Gibson and Ron Goldsack in June. Gibson was president and CEO of Trelawney Mining when it was acquired by Iamgold, and Goldsack has been active in the investment business for decades, acting as a consultant to companies on corporate finance and mergers and acquisitions.

Institutional investors include Sprott with 16.4%, Pinetree Capital (PNP-T) with 8.5% and Libra Advisors with 5.2%. Other major shareholders consist of Goldcorp (G-T, GG-N) with 2.6%, and Teck Resources (TCK-T, TCK-N) with 2.1%.
At press time, Temex was trading at 26¢ a share within a 52-week band of 10¢ to 36¢.

Craig Stanley of Stifel Nicolaus, who initiated coverage of the company last month, has a 12-month target price of the stock of 75¢. Siddharth Rajeev and Nicole Engbert of Fundamental Research have a 12-month target price of 82¢.



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Photos

An outcrop at Temex Resources' Juby gold project in northern Ontario. Sources: Temex Resources
An outcrop at Temex Resources' Juby gold project in nor...


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