VANCOUVER — It has been a bit of a tough year for Calgary-based junior Stratabound Minerals (TSXV: SB; US-OTC: SBMLF) at its wholly owned Captain North Extension (CNE) zinc–lead–silver deposit in the prolific Bathurst mining camp. But the company has persevered, despite permitting delays, and for doing so has been named New Brunswick’s “Developer of the Year” by the New Brunswick Prospectors & Developers Association.
During the first quarter of 2013 Stratabound kick-started production at CNE, with ore trucked to Glencore Xstrata’s (LSE: GLEN) Brunswick mill for custom processing. The shipments came during the final days of Glencore’s operation, which was shut down in April after running for over 50 years.
Stratabound had hoped to use a 10-week window to mine and truck ore to Brunswick, with a delivery target of between 90,000 and 150,000 tonnes.
However, due to those permitting delays, the company only delivered 62,750 tonnes between March and mid-April, at an average grade of 8.13% zinc, 3.22% lead and 111 grams per tonne silver. Payable metals in concentrates were 7.5 million lb. zinc, 2.3 million lb. lead, 75,500 oz. silver, 12,462 lb. copper and 144 oz. gold.
“I guess perhaps our award is for developing and producing from a deposit in what must be world-record time. We certainly didn’t profit from the operations,” commented president Stan Stricker during a phone interview, noting that Stratabound nearly “broke even.”
“Our expectations were that we’d be able to proceed with development much earlier than turned out to be the case. Based on our previous record with the same pit back in the 1990s, we were hoping we’d receive an expedited response on our permit applications. We were really disappointed when we didn’t receive them with the usual conditions in August 2012,” he said.
Stratabound filed its environmental-impact assessment for CNE in April 2012, but did not receive its development certificate until nine months later. As a result the company realized production revenues of $10.4 million through September, which barely offset costs related to CNE’s sales that totalled $10.3 million. Stricker said Stratabound paid back most of its production loans, however, with just over $100,000 outstanding at press time.
“There were definitely benefits to surrounding communities,” Stricker noted, mentioning investments in road infrastructure. “I think if you take direct and indirect employment, we had a couple of hundred people profit from the project. It’s tough to say how many trucks we had going since it varied day-to-day based on the weather, but we had a large workforce, along with the typical supply chains.”
As a result of the production shortfall, Stratabound turned to the market to raise money for more drilling at CNE and its nearby Captain deposit.
The company outlined several geophysical anomalies during recent surveying that could indicate volcanogenic massive sulphides with zinc–lead–silver or copper–gold mineralization.
In October the company closed a $250,000 private placement, issuing 2.5 million units at 10¢ per unit.
The financing fuelled a 1,100-metre drill program that includes eight holes targeting separate anomalies.
“We’re well into drilling those electromagnetic anomalies at CNE and Captain,” Stricker said. “You could call them wild-cat targets, as they’re all blind without the benefit of outcrop. We’re basing it on our geological projections showing these things are in the right horizons and host rocks.”
Another hole will be collared at the 10.5 sq. km Commander property, which adjoins the CNE and Captain claim groups to the north.
Back in December 2010 Stratabound signed an option agreement with Commander Resources (TSXV: CMD; US-OTC: CMDRF), wherein it can earn a 65% stake in the project by spending $2.35 million in exploration by 2017.
“We’re definitely looking at other project opportunities, and I do have my eye on a potential acquisition,” Stricker said.
“I think we’ll continue to focus on New Brunswick over the next year, and though there are plenty of opportunities, I’m not sure how many would generate any market interest. There is little appetite for grassroots exploration, in my opinion, so we’re looking for projects that are near the resource stage.”
Stratabound reported a working capital deficit of $100,000 at the end of September.
Shares have traded within a 52-week range of 4¢ to 12¢, and closed at 4¢ per share at press time.
Stratabound has 76 million shares outstanding for a $3-million market capitalization.