VANCOUVER — Garibaldi Resources (TSXV: GGI; US-OTC: GGIFF) president and CEO Steve Regoci says he’s baffled by the staggering gains in the company’s share price since the junior began drilling in August at its historical E&L nickel-copper property in northwestern B.C.’s Golden Triangle district.
The share price has surged 2,500% to $4.50 at press time, propelled by the company’s Sept. 1 and Oct. 13 announcements that all 12 drill holes returned “broad sections” of nickel-bearing pentlandite, chalcopyrite and pyrrhotite.
Garabaldi’s drill campaign is targeting “Anomaly D,” a 260-metre long geophysical conductor sitting below the property’s historical E&L magmatic nickel-copper deposit. Assays for the drill holes are pending.
“There’s definitely potential here, but honestly, you have to shake your head. I wouldn’t have predicted prices like this,” Regoci tells The Northern Miner during a phone interview. “The same thing happened to Noront Resources in 2007, but their significant moves in stock price came after assays. We haven’t put out our assays yet so the movement in our stock is quite remarkable. The guys up on the hill aren’t shocked because they’re looking at the core, but we still have to see the assays.”
Regoci says assay results should arrive in the coming weeks.
The first move in the company’s stock came after Sept. 1, when initial results of the first drill hole were released.
The company stated that the hole, which was drilled away from the historic mineralized zones into an untested area, entered a mineralized gabbro with disseminated sulphides at 51 metres deep, with continuation to 169.5 metres. A second sulphide section with “metre-scale intervals up to 30% sulphides” was intercepted between 274.5 metres and 332 metres deep.
The second major price move was triggered by the Oct. 13 announcement that drilling intercepted “broad sections of disseminated and net-textured sulphides” in the other 11 holes, and that X-ray fluorescence analysis supported a “very high” tenor of nickel in the sulphides.
The press releases coincided with major investments by financier Eric Sprott, who raised his interest in Garibaldi from 7.7% to 10.7% on an undiluted basis after buying $2.5-million worth of Garibaldi stock in a flow-through and non-flow-through financing on Oct. 2.
Sprott raised his interest again on Oct. 20 to 11.7% after acquiring 1.6 million units at $3.15 per unit for a total of $5 million. Each unit consists of one share and one warrant, with each warrant exercisable at $4.50 for two years.
“There are networks on top of networks of people involved here. If the right people get involved in your stock they can cast quite a wide net, and if you get that kind of distribution going then it takes on a life of its own,” Regoci says. “I’m hoping it’s because they see us as something similar or half as big as Voisey’s Bay, but we don’t know that yet. It’s still early days.”
Garibaldi’s drill program is the first of its kind on the property in almost 50 years. Previous exploration at E&L outlined a historical resource of 2.9 million indicated and inferred tonnes of 0.80% nickel and 0.62% copper with anomalous values in gold, silver and platinum group metals (PGM).
The resource was based on 12 shallow holes drilled by Silver Standard Mines — now SSR Mining (TSX: SSRM; NASDAQ: SSRM) — in the 1960s, where intercepts included 37.8 metres of 1.3% nickel and 0.79% copper, and 27.7 metres of 1.2% nickel and 0.65% copper.
Magmatic nickel-copper deposits form when mafic magmas sequester sulphur and metals during their ascent through the crust, only to deposit sulphides in quiescent chambers, dikes or sills.
Regoci says that E&L is an “unusual” deposit type for the Golden Triangle district. The region is more known for a plethora of Jurassic-aged volcanogenic massive sulphide, porphyry and epithermal base and precious metals deposits, such as Barrick Gold’s (TSX: ABX; NYSE: ABX) Eskay Creek, Seabridge Gold’s (TSX: SEA; NYSE: SA) KSM, and Pretium Resources’ (TSX: PVG; NYSE: PVG) Brucejack mine.
Mineralization at E&L — the Nickel Mountain gabbro — is hosted in stocks and dike swarms that extend along a 3 km northeast trend, according to a B.C. MINFILE.
The age of the metal-rich intrusion is pegged between 185 and 110 million years old, which is younger than the world’s largest magmatic nickel-copper camps.
Most world-class magmatic nickel-copper deposits — such as those seen in the Thompson nickel belt in Manitoba, the Cape Smith belt (Raglan) in Quebec, Sudbury and Voisey’s Bay — formed during magmatic events in the late to mid-Proterozoic, some 1.9 to 1.3 billion years ago.
The world-class Norilsk magmatic PGM-copper-nickel camp in Russia is different, having formed 250 million years ago in response to a massive surge in volcanism known as a flood basalt. (This particular event extinguished 95% of life on the planet due to global warming triggered by increased volcanism. The extinction is known by scientists as “the great dying.”)
In contrast, the Golden Triangle is focused within a cordillera, built by the accretion and subduction of outboard landmasses to the ancestral margin of North America between 150 million to 50 million years ago. (For more details on the geological evolution of the Canadian cordillera please click here.)
“The Golden Triangle is arguably one of the most metal-rich districts in the world,” Regoci says. “There are an awful lot of eyes in the speculative world looking at you if you have a significant land position here. With all the new infrastructure improvements and power, there’s an awakening on the district’s potential.”
Anomaly D is one of four high-priority geophysical conductors Garibaldi has identified on its 63 sq. km property. The targets are on razorback mountain ridges spanning 6 km around glaciers and snowfields.
Because the age of mineralization at E&L is younger than the other intrusion-related mineral systems in the Golden Triangle, the B.C. MINFILE on E&L suggested that the extensive Bowser basin to the east may also be prospective for similar magmatic-style nickel-copper deposits.
Shares of Garibaldi have traded in a 52-week range of 8¢ to $5.27, and closed at $4.50 at press time. The company has 86.3 million shares outstanding for a $439-million market capitalization.