Balmoral Resources (TSX: BAR; US-OTC: BALMF) founder Darin Wagner has had his eye on the Hwy 810 property for years now as part of a corporate effort to plant the junior explorer’s flag over greater parcels of Quebec’s rich Abitibi greenstone belt.
“The Abitibi hosts the second-largest accumulation of high-grade gold deposits on the planet, so it remains a primary focus of mergers and acquisitions activity in the gold sector,” says Wagner, a geologist and the company’s president and CEO.
The 250 sq. km Hwy 810 property the company staked in early August is 35 km south of its Bug Lake and Martiniere West gold deposits (part of Balmoral’s larger Detour Trend project in northwestern Quebec), and just 15 km northeast of Hecla Mining’s (NYSE: HL) Casa Berardi, an underground gold mine that produced 127,900 oz. gold last year.
“There were a couple of bigger blocks at Hwy 810 that we thought would eventually come open, and with the way things have been over the last four or five years with the downturn, they eventually did, so the time to act was now,” he says. “There are some upsides of the downturn — opportunities become available that wouldn’t necessarily otherwise.”
The property also happens to sit 18 km south of Selbaie — a mine that before it closed churned out 53 million tonnes of ore (at average grades of 1% copper, 1.9% zinc, 41 grams silver per tonne and 0.6 gram gold) — and 100 km west of Glencore’s (LSE: GLEN) Bracemac-MacLeod deposit in the Mattagami volcanogenic massive sulphide (VMS) camp.
“The property straddles the Mattagami domain, which has VMS deposits, and the domain that hosts Casa Berardi, which is what we liked about it,” Wagner says. “It has a little of both — there are clear indications of both styles of mineralization — but we’d say the gold mineralization probably outweighs the base metal potential. Still, you can’t ignore the fact that there was a 53-million-tonne base metal deposit sitting in your backyard.”
Like Balmoral’s Detour Trend project to the north, historic exploration on the Hwy 810 property seems to have focused on the area’s base metal potential, and only minor effort was spent on the structurally controlled gold targets similar to Detour, Casa Berardi and Martiniere.
Wagner notes that the acquisition partly came from regional compilation work that used the company’s proprietary airborne and geological databases.
“In 2010, when we bought the Martiniere and Fenelon properties, we also acquired a regional [magnetic and electromagnetic] airborne and geological data set that stretched from north of the Detour Trend project area to the south of Casa Berardi,” he says. “We’ve had a number of these other areas — like Highway 810 — that we’ve kept an eye on, and in some cases we’ve added a few small properties.”
As the name suggests, the property boasts excellent access via an extensive logging road network connected to regional Hwy 810, which cuts north–south through the property. The company uses Hwy 810 to access its Detour Trend project.
Initial testing on the property is likely to take place next winter and will not affect the company’s 2016 exploration plans. “The opportunity was too good to pass up, but we don’t want it to distract us from our other work,” he says. “It’s a 2017 project for us.”
The company has two drills working on Martiniere, and the first set of 2016 results should be out in the next couple of weeks. Drilling would continue through to October and possibly into November, weather permitting. The $5-million drill program this year (20,000 metres), is completely funded and the company should exit 2016 with more than $10 million in the treasury, which Wagner says is more than the company has ever spent in a single year.
The company has no debt.
“We never have and we never will” have debt, he says.
(Wagner’s other accomplishments include cofounding West Timmins Mining, which was sold to Lakeshore Gold for $424 million.)
So far, 51% of the holes drilled into the Martiniere system have returned intercepts grading greater than 10 grams gold per tonne. The highest-grade sample came from the Bug Lake footwall zone, measuring 9.71 grams gold over 0.6 metre. The Martiniere gold system is 45 km east of Detour Gold’s (TSX: DGC) open-pit gold mine in Ontario.
Ninety-five percent of the drilling at Martiniere is less than 250 metres deep. The fully owned system is open at depth and spans at least 4 by 2 km.
The company has also discovered the Grasset deposit on its Martiniere property, 37 km from the project’s main gold deposits, which contains nickel, copper, cobalt and platinum. Grasset has an indicated resource of 3.5 million tonnes grading 1.7% nickel-equivalent at a 1% nickel-equivalent cut-off grade, for 136.28 million lb. nickel equivalent. Inferred resources add 91,100 tonnes grading 1.2% nickel equivalent for 2.39 million contained lb. nickel equivalent.
Over the last year, Balmoral’s shares have traded in a range of 33¢ to $1.09. At press time the company traded at $1.05.
Balmoral has 125 million shares outstanding for a $131-million market capitalization.