In its drill campaign at the project, 25 km east of the city of Val-d’Or, Probe has found two shallow gold discoveries.
The first, 1,200 metres south of the former Beliveau mine, returned an intercept of 7.4 grams gold per tonne over 12.4 metres from 148 metres deep. The intercept came within a broader zone of 24.5 metres grading 4.2 grams gold.
The second, 600 metres south of the former Beliveau mine, cut 7.8 grams gold over 2.5 metres from 129 metres deep, and 1.7 grams gold over 11.8 metres from 151 metres deep.
The discovery holes were the farthest from the deposit to date, and were found in an area tested for the first time by an induced-polarization geophysical survey.
“We have had remarkable success on our Val-d’Or East project, which is not surprising, given that we are less than 20 minutes away from one of the area’s largest gold-producing systems at Sigma-Lamaque,” Probe’s president and CEO David Palmer says. “What is surprising is that this area has seen little historic exploration. This has provided us with a rare opportunity to acquire a land position in a world-class gold-mining camp that still has a lot of exploration upside.”
The company has consolidated what is now the largest land package in Val-d’Or and implemented a $9-million exploration program this year to expand the current gold resources and find more deposits, Palmer says.
George Topping of Industrial Alliance Securities noted the latest drill results support his theory that a combined open-pit and underground operation is “likely.”
“The economics of shallower ore to support deeper discoveries is useful,” he said in a research note. “With Integra Gold being acquired by Eldorado Gold for $590 million, there is clear appetite for Val-d’Or assets if a viable resource is proven.”
The New Beliveau deposit has an inferred resource of 9.1 million tonnes grading 2.63 grams gold for 770,000 contained oz. gold. The resource, completed in November 2012, was based on a cut-off grade of 1 gram gold from surface to 350 metres deep, and a cut-off grade of 1.5 grams gold at 350 metres deep. The resource includes the New Beliveau, Highway and North zones.
In May, Probe expanded its 2017 drill program to 75,000 metres from 50,000 metres, and the company expects to update the resource estimate before year-end.
The New Beliveau deposit sits beneath the past-producing underground Beliveau mine, which was operated by Cambior from 1989 to 1993, and churned out 170,000 oz. gold at 3.15 grams gold.
Among the drill results released on June 6 were gold hits in dike structures around the New Beliveau deposit. One hole returned an intercept of 1.2 grams gold over 26.1 metres.
In March, Probe found a high-grade gold zone hosted in diorite dike 300 metres west of the past-producing mine — the most western step-out that the company has drilled, and the highest grade found on the property. One drill hole intersected a quartz-tourmaline vein zone that included an interval of 1,122 grams gold per tonne over 0.7 metre. The intercept formed part of a larger interval of vein mineralization averaging 92.7 grams gold over 8.7 metres. The mineralization intersected between 272 and 281 metres deep. Highlights from other drill holes include 6 grams gold over 3 metres, 1.7 grams gold over 15 metres, 7.2 grams over 3.6 metres and 4.2 grams over 11.5 metres.
In May, Probe announced that another drill hole returned a 154.4-gram gold interval over 0.6 metre and is associated with the same structure hosting the intercept of 1,122 grams gold over 0.7 metre reported in March. It also noted that drilling traced the deposit for more than a 300-metre strike length and to 400 metres depth, with the deposit remaining open in all directions.
Probe’s drill program focuses on four areas: the initial high-grade dike discovery, the high-grade subvertical gold structure, the southeastern extension of the New Beliveau deposit and geophysical targets south of the New Beliveau resource.
The project is part of the Val-d’Or mining camp within the Southern volcanic zone in the southeastern part of the Archean Abitibi greenstone belt.
The New Beliveau deposit has parallel, east- to west-trending, moderately dipping mineralized zones hosting gold-bearing quartz-pyrite-tourmaline veins. Gold mineralization also occurs in immediate wall rocks.
The company says the sulphide content ranges from 1–5%, but could reach 10% in the higher-grade sections. The alteration zone is commonly twice the thickness of the vein itself. The north- to south-trending diorite dikes contain significant gold, with grades increasing in areas where the dikes intersect the east–west quartz-tourmaline veins. The wall rocks for both systems consist of intermediate volcanics.
Probe Metals was formed as a spinout company after the $526-million sale of Probe Mines to Goldcorp (TSX: G; NYSE: GG) in March 2015. Goldcorp still owns 13.9% of Probe Metals.
Tyron Breytenbach of Cormark Securities noted in March that he is attracted to Probe Metals for a “combination of a well-funded ($40 million cash), proven management team and a district-scale, Canadian land package that is subject to a new exploration thesis.
“Although past performance is no guarantee of future success, we are drawn to a team carried over from Probe Mines that has shown the ability to apply creative science to uncover ore deposits. The greater than 4 million oz. Borden project was discovered by the original Probe in 2010, in an area of Ontario previously viewed as barren,” the mining analyst said in a research commentary marking his coverage of the company.
“With the senior producers facing broad production declines beyond 2019, the junior space has inevitably garnered attention. Juniors with exposure to premier mining jurisdictions are destined to attract attention in this environment, as only a handful of explorers have access to capital dedicated to greenfields exploration.”
At press time, Probe’s shares were trading at $1.37 apiece within a 52-week range of 99¢ to $2.18.
Breytenbach has a “buy” rating on the stock and a $2.15-per-share target price, while Topping of Industrial Alliance Securities has a $2.50-per-share target and a “speculative buy” rating. Michael Gray of Macquarie Research has a $1.75-per-share target and an “outperform” rating on the stock.