Balmoral Resources (TSX: BAR; US-OTC: BALMF) has made a new high-grade gold discovery at its wholly-owned Fenelon property. The property forms part of the company’s district-scale Detour Gold Trend project, 75 km west-northwest of Matagami, Quebec.
The company conducted a drilling campaign at the property in the winter of 2019-2020, with its western-most drill hole, 52-20-18, intersecting 3 metres grading 307.9 grams gold per tonne starting 101 metres downhole. The intercept also contained a higher-grade core of 1 metre grading 858 grams gold per tonne.
“We started drilling in the area last year, working from late summer and into fall,” Darin Wagner, the company’s president and CEO, said in a telephone interview. “The winter program that produced these results was a follow-up to that, as well as modelling based on the drill results from last year.”
The discovery occurred in the Reaper zone, which is situated along the western margin of the Area 51 intrusion and the southern part of Area 52 of the Fenelon property.
Located on the eastern margin of the intrusion and on the adjacent development-stage Fenelon gold mine property, purchased by Wallbridge Mining (TSX: WM) from Balmoral for $3.7 million in 2016, the Tabasco Zone also shows high-grade gold mineralization.
Highlights of a drill program conducted by Wallbridge at the lower Tabasco zone in early 2020 include drill hole 19-094 which intersected 10 metres grading 32.18 grams gold per tonne starting at 717.45 metres downhole, with a higher-grade core intersecting 5 metres grading 58.81 grams gold per tonne.
In March, Balmoral and Wallbridge entered into a definitive arrangement agreement, in which Wallbridge will acquire all of Balmoral common shares based on 0.71 of a Wallbridge common share for each Balmoral common share.
Although the announcement of the merger predates the Reaper discovery, the high grades found by Wallbridge on the eastern side of the intrusion coupled with the high grades at the Reaper discovery to the west and south show that there is an extensive system of mineralization that spans both properties, Wagner said.
“Our geological modelling suggests that what’s on one side should wrap around to the other, and so could present a large target area,” explained Wagner. “The Reaper discovery, therefore, essentially cements the rationale for putting the two companies together so that this system can be worked in its entirety.”
Furthermore, as mining financier Eric Sprott is also a significant shareholder in both companies, the merger is similar in some respects to the merger, in 2016, of Newmarket Gold and Kirkland Lake Gold (TSX: KL; NYSE: KL) over another high-grade gold system, Wagner said.
The proposed agreement, to be finalised on or about May 22, according to Wagner, would lead to a consolidation of the Area 51 gold mineralized system. It would combine Wallbridge’s Fenelon gold mine and Tabasco zone with Balmoral’s land holdings along the Detour Gold Trend, which includes the Fenelon property and the nearby gold and nickel resource assets, Martiniere and Grasset.
Once the Quebec government has lifted the suspension of exploration activities, the company intends to commence follow-up drilling at the hole.
At press time in Toronto, Balmoral Resources was trading at 52¢ per share within a 52-week trading range of 10¢ and 53¢.
The company has around 178.4 million common shares outstanding for a $93-million market capitalization.