Quebec snapshot: Eight companies to watch

An outcrop at Monarch Gold’s Fayolle gold property, 35 km northeast of Rouyn-Noranda, Quebec. Credit: Monarch Gold.

With a large landmass, favourable mining policies and a strong history of mine development and operations, Quebec is one of the world’s top destinations for mineral explorers and developers. Below, we showcase eight companies active in the province.

Falco Resources

A rendering of Falco Resources’ planned Horne 5 gold mine in Rouyn-Noranda, Quebec. Credit: Falco Resources.

A rendering of Falco Resources’ planned Horne 5 gold mine in Rouyn-Noranda, Quebec. Credit: Falco Resources.

Falco Resources (TSXV: FPC) is working to start up the Horne 5 project below the past-producing Horne deposit in Royun-Noranda.

The Horne mine, originally discovered in 1920, operated between 1926 and 1976, generating 54 million tonnes over this time, at a head grade of 6.1 grams gold per tonne, 13 grams silver per tonne and 2.22% copper.

In the fall of 2017,  the results of a feasibility study on a development at Horne 5 defined a 15-year, 16,000-tonne-per-day bulk operation, producing an annual average of 219,000 payable oz. gold over the life-of-mine. In addition to gold, the underground operation would produce 229 million lb. copper, 1 billion lb. zinc and 26.3 million oz. silver over 15 years. With all-in sustaining costs (AISCs) estimated at US$399 per oz., and a pre-production construction outlay pegged at US$801.7 million, the after-tax net present value for the proposed mine stands at US$602 million, at a 5% discount rate, with a 15.3% internal rate of return.

According to Falco, Horne 5 is “one of the largest gold projects in North America.” This site includes proven and probable reserves of 80.9 million tonnes, grading 1.44 grams gold, 14.14 grams silver, 0.17% copper and 0.77% zinc, (2.37 grams gold-equivalent), which contain 6 million gold-equivalent ounces.

Below this reserve inventory, Falco holds 21.5 million of inferred resources, at 2.51 grams gold-equivalent, with additional exploration potential at depth within the volcanogenic massive sulphide deposit.

In October, Falco announced agreements with Glencore (LSE: GLEN), including a $10-million senior secured convertible debenture bridge financing to fund Horne 5, and life-of-mine copper and zinc concentrate offtake agreements.

Last year, the company entered into a binding term sheet on a silver stream with Osisko Gold Royalties (TSX: OR; NYSE: OR). The stream would cover up to 100% of the future silver from Horne 5 in exchange for up to $180 million in up-front cash payments and ongoing payments equal to 20% of the spot silver price, up to a maximum of US$6 per ounce.

Falco is focused on permitting and project financing work for Horne 5.

The company has an $88.2-million market capitalization.

Globex Mining

Globex Mining Enterprises (TSX: GMX; US-OTC: GLBXF) is a project generator and mineral property bank focused on assets in eastern Canada, the U.S. and Germany. The company’s strategy includes property acquisition and exploration, and preparing projects for option, joint venture or sale. As compensation, Globex secures long-term royalty arrangements.

Globex holds 189 exploration, development and royalty properties in its portfolio, including base and precious metals assets, as well as specialty metals and minerals and industrial minerals.

These assets include over 40 former mines, and 54 historical or current resource inventories. They also feature 69 royalties and two active options, with cash or share payments and a gross metal royalty.

In Quebec, Globex holds several property interests along the Abitibi geological belt, between Timmins and Val d’Or.

In September, the company announced that it had received the second-year option payment from Excellon Resources (TSX: EXN) of $100,000 in cash and $325,000 in Excellon stock, for the Braunsdorf silver project in Germany.

Earlier that month, Globex also announced that Radisson Mining (TSXV: RDS) hit high grades on the Kewagama gold mine portion of the O’Brien project, near Cadillac, Quebec. Globex holds a 2% net smelter royalty on this part of the O’Brien property. Intercepts included 2.1 metres of 45.86 grams gold per tonne and 2.2 metres of 17.9 grams gold.

In July, the company sold 91 claims, totalling 49.6 sq. km, 80 km north of Chibougamau, Que., to Troilus Gold (TSX: TLG). These claims allowed the gold-copper developer to continue consolidating a land package south and southeast of the past-producing Troilus mine. In exchange, Troilus paid Globex 350,000 Troilus shares and granted the company a 2% gross metal royalty.

Globex has a $39.3-million market capitalization.

Iamgold

The ground-breaking ceremony at the Cote gold project in Ontario. Credit: Justin Trudeau’s press office.

Iamgold (TSX: IMG; NYSE: IAG) is a gold producer with three operating mines: Westwood in Quebec, Rosebel in Suriname and Essakane in Burkina Faso. This year, the company expects to generate a total of 645,000-700,000 oz. gold for Iamgold, at all-in sustaining costs (AISCs) of US$1,195-$1,245 per ounce.

The open pits at Essakane and Rosebel are expected to make up the majority of this year’s guidance, with Westwood anticipated to contribute 85,000-100,000 oz.

Westwood is expected to produce 130,000-145,000 gold oz. annually, at AISCs in the US$1,000-$1,100 per oz. range, once ramped up to a steady-state level. With a three to four-year ramp-up expected, production is expected to be in the range of 100,000-125,000 oz. a year.

Also in Quebec, the producer has been active on the exploration front. With excess mill capacity at Westwood, the company is looking to feed the processing site with material from satellite prospects and custom feed.

In September, the company held a ground-breaking ceremony, to mark the start of construction at its 64.75%-held Cote gold project, 20 km from Gogama, Ontario. Japan-headquartered Sumitomo Metal Mining is Iamgold’s joint-venture partner and holds a 30% interest in the 70-30 joint venture. Treelawn Investment has a 7.5% interest in the project, outside of the JV.

According to a 2018 feasibility study, and incorporating updates from this summer, the 70,000-tonne-per-day Cote open pit is expected to produce an average of 367,000 gold oz. annually, over 18 years. Assuming a gold price of US$1,350 per oz., AISCs are forecast at US$771 per oz., while the initial capital estimate is US$1.3 billion. Based on US$1,350 per oz. gold, the after-tax net present value estimate for this development comes in at US$1.1 billion, at a 5% discount rate, with a 15.3% internal rate of return.

The company is targeting commercial production at Cote by the second half of 2023.

Iamgold has a $2.5-billion market capitalization.

Monarch Gold

Aerial view of Monarch Gold’s Beaufor Mine, northeast of Val-d’Or, Québec. Credit: Monarch Gold.

Monarch Gold (TSX: MQR; US-OTC: MRQRF) is a Quebec-focused explorer and developer. The company’s flagship asset, Wasamac, is currently in the permitting stage, with financing efforts and trade-off studies also underway.

Wholly owned Wasamac covers 21.8 sq. km and lies 15 km to the west of Rouyn-Noranda. A 2018 feasibility study on the asset defined a 6,000 tonne-per-day, 11-year underground mine. This operation would produce an average of 142,000 gold oz. annually, at all-in sustaining costs of US$630 per ounce. With a construction cost pegged at $464 million, the after-tax net present value for this development stands at $311 million, at a 5% discount rate, with an 18.5% internal rate of return.

The shear-hosted deposit features mineral reserves of 21.5 million tonnes, grading 2.56 grams gold per tonne, containing 1.8 million gold ounces. Wasamac previously produced 252,923 oz. of gold between 1965 and 1971.

In May, Monarch entered into a memorandum of understanding with Glencore (LSE: GLEN), on the potential use of the major’s Kidd concentrator in Timmins, Ontario, to treat Wasamac ore. The first stage of the MOU involves a study, to be completed by Monarch, on upgrading the concentrator and infrastructure.

The company also has a 100% stake in the past-producing Beaufor underground mine, 20 km north of Val-d’Or. The site was placed on care maintenance in June 2019. Monarch is looking to re-start this operation in the next 12 to 18 months. Material mined from Beaufor is processed at the company’s 1,600 tonne-per-day Camflo mill, 50 km away.

In May, Monarch also signed an agreement with Caisse de depot et placement du Quebec, selling a 3% net smelter return royalty on gold production from the mine for $5 million. With these proceeds, the developer has started a 42,500-metre drill program, focusing on near-mine and near-surface targets.

Also in Quebec, Monarch holds the high-grade McKenzie Break exploration project, as well as the past-producing Camflo property.

On Nov. 2, Monarch and Yamana Gold announced a friendly acquisition agreement under which Yamana will acquire Monarch’s Wasamac property and its Camflo property and mill in a cash and share deal worth about $200 million (see story on page 1).

Monarch Gold has a $127.4-million market capitalization.

Probe Metals

In the field at the Cadillac Break East project. Credit: Probe Metals

Probe Metals (TSXV: PRB; US-OTC: PROBF) is focused on advancing its Val-d’Or East project, 25 km east of Val-d’Or. The district-scale project covers 435 sq. km and, according to Probe, is one of the largest land holdings in the Val-d’Or camp. The property includes three past-producing mines (Beliveau, Bussiere and Monique) and falls along four regional mine trends, including 14 km of strike along the Cadillac Break.

Val-d’Or East features two known parallel gold trends, Courvan and Pascalis.

In September 2019, Probe tabled an updated resource estimate, with total measured and indicated resources of 14.6 million tonnes, grading 1.85 grams gold per tonne, for a total of 866,300 gold ounces. Additional inferred resources stand at 37.9 million tonnes, at 1.96 grams gold, for a further 2.4 million oz. of gold.

These resources include both a pit-constrained, as well as an underground component, and are contained within three deposits along the Pascalis trend, five along Courvan, and also include resources at Lapaska and Monique. Monique lies within the Val-d’Or East land package, whereas Lapaska is part of the Cadillac Break East property, optioned from O3 Mining (TSXV: OIII), where Probe may earn up to a 60% interest.

In October, the company released results from Val-d’Or East – drilling hit near-surface gold mineralization around existing resources, as well as two new gold zones around the Pascalis trend. Highlights from a new zone southeast of the New Beliveau deposit included 26.4 metres of 1.4 grams gold starting at 26.6 metres and 0.6 metre of 94.1 grams gold from 18.3 metres.

In September, Probe announced high-grade gold intercepts from expansion drilling at the wholly owned Monique property, reporting drill highlights of 24.5 metres of 4.1 grams gold and 6.7 metres of 3.6 grams gold.

In August, the company released results from the Courvan area at Val-d’Or East – notable intercepts included 7 metres of 8.8 grams gold and 4.4 metres of 10.3 grams gold. This drilling included resource expansion and infill work.

Towards the end of July, Probe announced a new discovery at Cadillac Break East, where a discovery hole hit 8.8 metres of 8 grams gold, along a trend with several gold zones.

The company is on track to drill a total of 90,000 metres this year and aims to release a resource estimate in the first quarter of next year.

Probe Metals was formed as a result of the sale of Probe Mines to Goldcorp in March 2015.

Probe Metals has a $207.6-million market capitalization.

Troilus Gold

Drills in the J zone at Troilus Gold’s namesake gold project in Quebec. Credit: Troilus Gold.

Troilus Gold (TSX: TLG; US-OTC: CHXMF) ) is working to re-start the Troilus gold project in Quebec, in the northeastern part of the Frotet-Evans greenstone belt.

In September, the developer released the results of a preliminary economic assessment for the project. The study defined a 22-year, 35,000 tonne-per-day open pit and underground operation, producing an average of 220,000 gold oz. annually in its first five years. With all-in sustaining costs forecast at US$1,051 per oz. and an initial capital outlay of US$333 million, the after-tax net present value estimate for the project comes in at US$576 million, at a 5% discount rate, with a 22.9% internal rate of return, based on US$1,475 per oz. gold.

Troilus plans to deliver a pre-feasibility study next year.

At the end of July, the company published an updated resource estimate for the property, with 177.3 million indicated tonnes grading 0.75 gram gold per tonne, 0.08% copper and 1.17 grams silver, as well as 116.7 million inferred tonnes at 0.73 gram gold, 0.07% copper and 1.04 grams silver.

With land holdings totalling over 1,000 sq. km, the company is the largest mineral claims holder in the underexplored greenstone belt.  Existing resources are contained within the J, Z87 and Southwest zones, which lie within a 20-km long geophysical trend.

In October, the developer reported regional exploration results – highlight samples from a new target, Testard, 10 km south of the main resource area, included 203 grams gold, 2,440 grams silver and 4.37% copper; 54.2 grams gold; and 31.5 grams gold and 13.4 grams silver. According to Troilus, these results included “the highest in-situ gold grades recovered to date within the Frôtet-Evans Greenstone belt.”

Earlier in October, the company announced that the summer’s exploration program defined another new zone of mineralization, the Goldfield Boulder zone, 36 km from the main mineral zones. Highlight sample assays included  26.2 grams gold and 27.8 grams silver; and 6.51 grams gold.

In September, Troilus started a 20,000-metre drill campaign, to upgrade resources and growing its inventory. Later that month, the company announced that samples from the regional exploration program suggest a new zone of mineralization, 8 km of the Southwest zone. Assay highlights include 9.7 grams gold and 1.1 grams silver; 2.81 grams gold and 2.69 grams gold.

The Troilus property includes a past-producing gold and copper mine, which generated over 2 million gold oz. and 70,000 tonnes of copper between 1996 and 2010.

Troilus Gold has a $121.8-million market capitalization.

Vanstar Mining

Winter drilling at Vanstar Mining’s Nelligan Project in Quebec. Credit: Vanstar Mining Resources.

Vanstar Mining Resources (TSXV: VSR) holds a mineral property portfolio in Quebec – these include the Nelligan, Felix and Amanda projects.

Nelligan, the most advanced holding, covers 58 sq. km, and is under an earn-in option to joint venture agreement with Iamgold (TSX: IMG; NYSE: IAG). This site, 60 km west of Chibougamau, includes a mineral deposit with 96.9 million inferred tonnes, at 1.02 grams gold, with 3.2 million gold ounces.

Iamgold holds a 75% interest in Nelligan, and Vanstar holds the remaining 25% stake. The gold producer may acquire an additional 5% interest, for an 80% holding, by completing a feasibility study. Vanstar would then retain a 20% non-contributory carried interest until initial production, with development funded by Iamgold.

There are four major known gold zones at the site – Rendard, Liam, Dan and 36.

In June, Iamgold announced exploration results from Nelligan, which suggest potential for a western extension of the resource, and confirm the resource model. Drill highlights included 27 metres of 2.86 grams gold; 25.1 metres of 1.87 grams gold; and 10.5 metres of 10.5 grams gold.

Vanstar also wholly owns the 16.3-sq.-km Felix project, 86 km northeast of Rouyn-Noranda. The claims were originally explored for iron in the 1940s, before gold exploration in the 1970s and 1980s. There are two untested electromagnetic conductors at the site. The company is compiling data on this asset and plans to complete an airborne geophysical survey, as well as 2,500 metres of drilling.

Northeast of Chibouagamau, Vanstar holds a 100% stake in the 74.7-sq.-km Amanda project, with five known gold showings associated with iron formations. These were discovered in 1995 and 1996; with 24 drill holes completed between 1997 and 2002. Highlight intercepts included 7 metres of 5.4 grams gold; and 18 metres of 1.15 grams gold. After prospecting and sampling at the property this year – which led to the discovery of four new gold showings – the explorer plans to start mapping, stripping and drilling next year.

Vanstar Mining has a $73.4-million market capitalization.

Wesdome Gold Mines

Aerial view of the Kiena mine complex in the Province of Quebec. Photo Credit: Wesdome Gold Mines.

Wesdome Gold Mines (TSX: WDO) is a gold producer and holds the Eagle River mine in Ontario, 50 km east of Wawa, as well as the Kiena complex in Quebec, within Val-d’Or.

This year, the company expects to generate 90,000-100,000 oz. gold at all-in sustaining costs of US$985-1,040 per ounce. The majority of this production is expected from the Eagle River underground mine, with a contribution from the Mishi pit. These feed a 850-tonne-per-day mill at Eagle River.

In September, the producer announced underground drill results from Eagle River – this work targeted the Falcon 7 zone, which the company says could provide additional mill feed. Drill highlights included 1.8 metres of 51.3 grams gold; and 12.5 metres of 18.6 grams gold. Wesdome has traced this zone from surface, over 1,000 metres of plunge; the area is an up-plunge extension of the 7 zone being mined currently.

The company expects to include mineral resources and reserves from Falcon 7 in its year-end update.

Proven and probable reserves across the 110-sq.-km complex total 1.2 million tonnes, at 14.4 grams gold, containing 550,000 ounces.

In Quebec, the 65-sq.-km Kiena complex has been on care and maintenance since 2013 and contains a permitted, 2,000 tonne per day mill, a 930-metre shaft, and a ramp system that extends down to 1,050 metres.

In May, Wesdome released the results of a preliminary economic assessment on a restart of Kiena. The study outlined an eight-year operation, producing an average of 85,931 oz. gold annually at AISCs of US$512 per ounce. With an initial capital cost estimate of $35 million, the after-tax net present value estimate of the development is $416 million, at a 5% discount rate.

In September, the gold company announced the results of underground definition drilling at Kiena – highlights from the higher-grade A zone included 13.1 metres of 151.1 grams gold; 10.8 metres of 96 grams gold; and 2.7 metres of 157.7 grams gold. According to Wesdome, this work has confirmed the geometry of the high grades in the A zone and traced new mineralization.

An updated resource for Kiena is on track for release later this year, ahead of next year’s prefeasibility study for the asset.

Wesdome Gold Mines has a $1.8-billion market capitalization.

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2 Comments on "Quebec snapshot: Eight companies to watch"

  1. It is no wonder Quebec enjoys the prosperity it has, due to it’s mining savvy and pursuit. Mining is reported to support 46% of it’s commerce on mining and the spin off jobs and materials that flow via the mines. You’ve indicated those that are gold producers and the indications are, Quebec’s precious metals and industrial mineral reserves are keeping those provincial coffers full. Precious metals are traded in grams as they should, given their constant and secure value, however there is as of this week another element that has joined that rare and exclusive club and has now risen from a commodity to an ultra pure component in the nuclear and new scientific portal to new innovative wonders that will unfold, and it lies in Quebec’s Laurentian district. The element is graphite and an upcoming and developing junior miner, Canada Carbon, has just delivered 50,000, grams of 5 nines pure natural graphite for CRM (certified reference material) to their distributor, to supply laboratories and industry world wide. It too is sold by the gram and now as well in multi-kilo quantity for larger projects! It is an industrial mineral that has reached the milestone of selling in the precious metals plateau. Jay Currie, of Seeking Alpha has a blog on the subject and it is well worthwhile reading.

  2. Interesting that you have only gold mines in your list. Have you considered Canada Carbon CCB.V – they are in the niche nuclear graphite sector – they just delivered their first 50,000 grams and the price per gram is far better than gold in my opinion

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