Cartier Resources (ECR.V) is no stranger to these pages. I shortlisted the company at the beginning of 2020 in my maiden Highballer report—Highballer’s Top Three Picks for 2020.
The stock was a no-brainer for a shortlist candidate.
Its price trajectory over the past few months has demonstrated good, steady, stair-stepping accumulation.
For those of you unfamiliar with Cartier Resources, but are looking for an asset-rich company operating in a mining-friendly jurisdiction, work this one into your to-do list. Run some due diligence.
As I keep harping on over at Equity Guru: Management is everything in the junior exploration arena. You can have a great asset, but without an efficient team—a gifted group of rock kickers and business-minded men and women—there’s often an erosion of value, one that becomes pervasive over time.
It’s clear to me management is on a mission to create shareholder value here.
Cartier acquired and assembled a robust pipeline of brownfield projects for pennies on the dollar. The goal is to de-risk and drive development with the drill bit, monetize the asset, and then move on down the line to the next best development project in the pipeline.
On the subject of management, I caught up with CEO Philippe Cloutier recently for a quick round of Q&A.
CEO Cloutier is a no-nonsense kinda guy. He doesn’t beat around the bush. Preferring to let the drill rig do the talking, his responses to these very elemental questions are concise and succinct—no bullshit.
Highballer’s questions (the accompanying images were supplied by CEO Cloutier):
Highballer: Your flagship Chimo Mine Project is located in the prolific Val-d’Or Mining Camp. Who are some of your neighbors, and what’s the mood like on your block?
CEO Cloutier: There’s some pretty good competition going on in the Val-d’Or Mining Camp, to name a few aggressive juniors, Probe (PRB.V), Monarch (MQR.V), O3 Mining (OIII.V) and QMX (QMX.V) and then some producers, Wesdome (WDO.T), Eldorado (ELD.T) and Agnico (AEM.T). Hecla (HL.NYS), Yamana (YRI.T), and IamGold (IMG.T) also have offices in the camp.
There’s always room for newcomers Greg. In a region with proven mineral endowment and time-tested exploration and development success, the environment can best be described as one where competitive tension, as well as demand tension, is most present.
Highballer: The Chimo mine was in operation several decades back. How much gold was taken out of the ground and what were the grades?
CEO Cloutier: The Chimo mine produced a total of 379,012 ounces of gold over a production period of 13 years with 3 different companies (table below).
|1964-67||Chimo Gold Mines||132,738||14.8||63,168|
|Total = 2,4 Mt @ 4,8 g/t Au||379,012 oz|
Highballer: Can you describe the mine infrastructure that is currently in place at Chimo? How deep is the shaft, how many levels, how extensive is the network of drifts, and how is this infrastructure supporting your current drilling campaign?
CEO Cloutier: The mine infrastructure at Chimo consists of a network of drifts distributed over 19 levels, 80 meters to 870 meters deep, all connected by a 3-compartment shaft 965 meters deep. The headframe and surface facilities were dismantled in 2008, but the electrical line and the sandpit are still present. From a surface standpoint, we have year-round access and the necessary water supply required for drilling.
Highballer: You’ve drilled over 120 holes at Chimo. Your current resource along all three zones (North, Central, and South) is now over 1.1 million ounces. Other deposits in the region have demonstrated mineralization at depths exceeding 3,000 meters, Laronde for example. What is your resource target at Chimo, and does the geological setting suggest similar potential at depth?
CEO Cloutier: Yes, the project has shown that all the gold zones (historic and new) can grow at depth. Drilling from surface does limit how much we’ll be able to outline while respecting appropriate levels of “spending”. The rest – to drill deeper more effectively and efficiently – will have to be done from underground. Once underground, targeting at depth will be less costly and risky (due to higher controls on drilling orientation). That potential is also a “value” of this past-producing mine.
Regarding our resource at Chimo, a shorter-term 1.7 million ounces, and most likely 2.0 million ounces, if engineering and drilling come together. We’ll have that resource update in Q4 of 2020.
Highballer: Can you describe where you’re currently drilling, and at what depth?
CEO Cloutier: We’re drilling the depth extensions of Gold Zones 5B4-5M4-5NE and 5CE (map below) over a length of 550 meters, situated 450 meters east of the underground infrastructures noted above. The length of this cluster of gold-bearing zones is known to be over 1,300 meters.
Highballer: Can you describe the nature of the mineralization you’re encountering—we’ve seen some pretty nice grades in your headline numbers recently?
CEO Cloutier: The mineralization we’re encountering consists of non-refractory arsenopyrite, smoky and / or whitish quartz veins, biotite, and visible gold grains (image below).
Highballer: How many meters remain to be drilled in 2020?
CEO Cloutier: The program winds down in the following weeks. We’ve drilled just under 10,000 meters in 2020.
Highballer: I talk about Peak Gold in my Highballer reports. If there is some validity to the theory, significant deposits located in mining-friendly jurisdictions are almost certainly in the crosshairs of resource-hungry producers. Do you believe we’re at a peak of discovery and production?
CEO Cloutier: If discovery has peaked, we are in deep shit… The entire industry is going to have to discover more since its production is significantly outpacing its own capacity of discovery. That is why seniors need to buy the deposits that are found. Sub-shovel ready deposits in mining-friendly jurisdictions are extremely valued in this business.
Highballer: Do you believe Chimo has what these resource-hungry predators are looking for?
CEO Cloutier: I have said in many presentations that we have built a “dataroom” and that we have initiated a “process”. In industry parlance that means we have “taken the necessary steps and precautions” to ensure we are in play (asset and-or corporate).
Highballer: When I quizzed CEO Cloutier on what I consider to be an extremely modest market cap for such an asset-rich company, he simply directed me to the following slide via the company’s Corporate Presentation…
This next slide fleshes out a more appropriate valuation for Cartier’s current ounce count and cash position (Cartier common shares last traded at $0.265)…
Highballer: Final question Mr. Cloutier: What is your ultimate goal for the Chimo Mine Project?
CEO Cloutier: Our goal at Cartier is to reward shareholders – we believe monetizing Chimo and the pursuing exploration on our three other deposits (Benoist, Fenton and Wilson) is the best path for that.
Highballer: Thank you sir.
“Management is everything”. Note below, the resumes of those running the show at Cartier.
A P.Geo, Cloutier holds a B.Sc. in Geology and a certificate in Human Resource Management and has over 25 years of experience in the mining exploration and development business. Mr. Cloutier has previously worked for industry leaders such as Noranda Inc., Aur Resources Inc., and Soquem. Mr. Cloutier played a lead role in the discovery and delineation of the Bell-Allard South Cu-Zn Mine (3.4 Mt @ 1.26 % Cu, 13.94 % Zn, 0.67g/t Au, 42.34g/t Ag) in Matagami, Quebec.
For over 25 years, Mr. Lavallière has worked in the field of mineral exploration. He graduated with a Bachelor Degree in Geology from the Université de Montréal and a Ph.D. in Mineral Resources from the Université du Québec à Chicoutimi (UQAC). His specialization is in metallogeny and optimization of associated exploration strategies. From 1985 to 1994, he worked for Noranda Inc. Horne Division, Les Mines Selbaie and Noranda Minerals Matagami Division. Then, from 1994 to 2006, he was Regional Manager of Exploration for SOQUEM inc. While at SOQUEM, he participated in the discovery of the Brosman and Clairy-Domergue deposits and the generation of many high profile exploration projects as Moblan (Li). He was instrumental in securing several business partnership agreements; optimized strategies and methodologies of exploration in addition to developing business relationships with various First Nations communities. From 2006 to 2007, he was Exploration Manager for Canadian Royalties. From 2007 to 2011 he was General Manager at GROUPE MISA, a business network of expertise in Mining Innovation with over 1300 members. Since September 2011, he is Vice-President at Cartier Resources Inc.
Deroff holds a Masters in operations and management of mineral resources (EGERM), from the Université d’Orléans (France). He has been with Cartier Resources since May 2008. His areas of expertise include geochemistry, geology and metallogeny. His expertise also includes high-level GIS data management and utilization.
Full disclosure: Cartier Resources is a Highballer marketing client. The author owns shares in Cartier Resources.
Postscript: Highballer would like to thank Luc Ten Have for his invaluable insights, and for introducing Highballer to CEO Cloutier. Many thanks Luc!Disclaimer - Legal Notice
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