Successful people make successful mines. And some of the best have come together to create Mayfair Gold (TSXV: MFG) and unlock the true value of the Fenn-Gib gold property in the Timmins camp, the company says.
Under the leadership of CEO Patrick Evans, Mayfair is launching its initial public offering in late February to raise as much as $20 million for drilling and related work at the property. Shares are expected to sell at $1.85 each, giving Mayfair a post-money equity value of as much as $150 million with 76.6 million common shares outstanding.
Evans has successfully taken five public companies to the development stage, then either sold to or partnered with senior companies who built commercial mines. His latest was Mountain Province Diamonds (TSX: MPVD; US-OTC: MPVD), co-owner of the $1 billion Gahcho Kué mine with De Beers Canada.
His business strategy is to take high quality assets in top locations through resource delineation, feasibility and permitting, then attract a senior producer to take the project through construction and into production. “Most of my companies have been sold to mid-tier or senior producers”. He calls it “taking an asset up the value curve.”
His new venture is Mayfair Gold, which was founded in July 2019. “We made a strategic decision to acquire gold development assets in tier one jurisdictions,” he said in an interview. “We reviewed a total of 94 opportunities in North America, and the one that ticked all the boxes was Fenn-Gib.”
Located 80 km east of Timmins, Ontario, Fenn-Gib comprises the North block on the Pipestone fault and the South block on the Porcupine fault. The property is in the right place. It was first discovered and explored 110 years ago, but never reached commercial production.
Former owners considered Fenn-Gib a non-core asset, so it changed hands several times. In the past 25 years there were six owners. The most work at the property was done by Lake Shore Gold in 2011-15 and Tahoe Resources in 2016-17. Tahoe consolidated claims in the North block and completed a 37,000-metre drill program. Historically, there was a total of approximately 130,000 metres of drilling completed in 420 holes.
Mayfair acquired 100% of the 2,000-hectare property from Pan American Silver (TSX: PAAS; NYSE: PAAS) for US$11 million and a 1% royalty in 2020.
The rising price of gold figured prominently in Mayfair’s desire to own a gold asset, Evans said. “In our original strategy to look for gold assets, gold was about $1,500 an ounce. Then it climbed much higher, and we expect that gold will continue to perform strongly.”
When Mayfair filed its first NI 43-101 compliant report for Fenn-Gib on Dec. 31, 2020, the property was estimated to contain 2.08 million oz. of gold in 70 million indicated tonnes grading 0.92 gram gold per tonne. There are a further 75,000 oz. gold in 4 million inferred tonnes grading 0.62 gram gold per tonne. Both figures use a 0.35-gram cut-off. The report was prepared by JDS Energy & Mining.
The deposit can be traced for 1.25 km on strike and is up to 300 metres wide. Disseminated mineralization is continuous from surface, making the project bulk-mineable using open pit methods.
The grade may be “modest” according to Evans, but the potential is “robust.” The base case 43-101 rock value is US$55 per tonne (at US$1,700 per oz. gold) and the total operating cost is an estimated US$23 per tonne processed.
With its bulked-up treasury, Mayfair is proceeding with Phase One of the recommendations in the 43-101 report.
Within three weeks of closing the acquisition, Mayfair’s first drill was turning. At least 30,000 metres of infill drilling is planned on 25- and 50-metre spacing at the Fenn-Gib deposit, and potential strike extensions to the mineralized zone will be tested with at least 20,000 metres of drilling. It plans to update the resource by the end of the year and Evans expects that three to four million oz. of gold will be outlined.
There is also considerable near-resource expansion potential, he said. A 3,000-line kilometer airborne survey is planned to better understand the structural geology on both the North and South blocks. Past drilling to the southwest of the resource on the North block intersected close to 11 metres at over 5 grams gold per tonne. Drilling on the South block intersected 1.5 metres at over 3 grams gold per tonne.
Preliminary metallurgical tests by previous owners are robust, based on a highly predictable geo-metallurgy. The ore is amenable to several different simple, proven flowsheets. Flotation recovery testwork conducted by SGS in 2015 produced recoveries of over 90%. Further testing is planned as fresh core is recovered under the Phase One drill program.
Mayfair has a sound business strategy – one that has proven itself time and time again – and there is no reason to doubt a positive outcome now as there are many cash-rich gold producers who are resource-starved, said Evans. Fenn-Gib is on the fast track to development.
— The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by MAYFAIR GOLD and produced in co-operation with The Northern Miner. Visit www.MayfairGold.ca for more information.