Last week, one of Highballer’s top three picks for 2020—Coral Gold (CLH.V)—was the subject of a friendly takeover that pushed its share price to multi-year highs.
Today, another stock on our top three list—Cartier Resources (ECR.V)—tagged multi-year highs. It’s one of my favorite charts in the junior exploration arena, a chart characterized by an orderly stair-stepping accumulation pattern—a series of higher highs and higher lows…
Cartier was given “Top Three” status for the same reason as Coral: I believe the company has an endgame. I believe a resource-hungry producer will acquire the company’s Chimo Mine Project and richly reward Cartier shareholders in the process.
A quick review of Chimo’s fundamental/technical advantages:
- it’s located in a mining-friendly jurisdiction, in a region steeped in mining culture and history;
- it has a significant resource that continues to grow (details further down the page);
- it’s a past producer (Cartier has metallurgical and production data that unlock Chimo’s defining characteristics);
- it has a 920 meter shaft with multiple drifts allowing ease of access to the deposits deeper subsurface layers;
- it’s near a paved highway;
- it’s is within easy reach of six local mills (no need to build a mill onsite).
The resumption of steady newsflow
Now that its $9.3M flow-through PP is a done deal, the next phase of (development) newsflow can begin.
On August 25th, Cartier Resources (ECR.V) dropped the following headline:
Without a doubt, the high-grade values encountered in the new 5CE Zone will add to Chimo’s ounce count.
Highlights:
- An intersection grading 20.4 g/t Au over 2.0 meters, included within a mineralized interval of 18.0 meters at 2.7 g/t Au, was intersected in the new Zone 5CE, in the East Sector of the property, 125 meters above drill hole CH19-54E which graded 11.9 g/t Au over 2.0 meters within a mineralized interval of 16.0 meters at 2.1 g/t Au;
- An intersection grading 11.9 g/t Au over 1.6 meters, included within a mineralized intersection of 14.6 meters at 3.1 g/t Au, and an intersection grading 7.5 g/t Au over 2.5 meters, included within a mineralized intersection of 13.7 meters at 3.2 g/t Au, were also intersected in Zone 5B4.
- These 15 holes (8,811 meters total) drilled in the East Sector of the property demonstrate continuity of mineralization in Zones 5B4 5M4 5NE over a distance of 1.3 kilometers. Drilling also led to the discovery of Zone 5CE and opened-up the potential for increased resources along this part of the property (map below):
- The property hosts three gold-bearing corridors (North, Central, and South) that to date host the following mineral resources, calculated using a gold price of US $1,300 per ounce and a cut-off grade of 2.5 g/t Au:
- 4,017,600 tonnes at an average grade of 4.53 g/t Au for a total of 585,190 ounces gold in the indicated category;
- 4,877,900 tonnes at an average grade of 3.82 g/t Au for a total of 597,800 ounces gold in the inferred category.
- To date, two internal engineering studies have been completed with positive conclusions. Two other internal engineering studies are underway, along with an internal study to prepare for a new mineral resource estimate on the Chimo Mine Property.
The positive conclusions to these engineering studies should also augment Chimo’s global ounce count.
This upcoming resource estimate—a potentially significant near term catalyst—is expected in Q4 of 2020.
Amplifying these recent results, the August 25th press release went on to state:
The interval of 20.4 g/t Au over 2.0 meters (included within 18.0 meters at 2.7 g/t Au) was intersected 200 meters below the resources of Zones 5B4-5M4-5NE.
The intersection grading 11.9 g/t Au over 1.6 meters (included within a mineralized intersection of 14.6 meters at 3.1 g/t Au), and an intersection grading 7.5 g/t Au over 2.5 meters (included within a mineralized intersection of 13.7 meters at 3.2 g/t Au), were also intersected in Zone 5B4.
This drilling program—a campaign that began back in December of 2019—encountered numerous mineralized intersections over an area measuring 550 meters by 200 meters below Zones 5B4-5M4-5NE (above map).
“The resources in this area will soon be estimated and added to the resources already published for the project.”
Here’s Chimo’s resource broken down into all three zones—Central, North, and South:
Philippe Cloutier, Cartier’s CEO:
“The results from Cartier’s 124 drill holes totalling 58,054 meters, along with the results of two completed internal engineering studies and two others still underway, have provided robust information which support our vision of potential scenarios for economic development.”
For those with a vested interest in the company, a recent Korelin Report interview with CEO Cloutier is well worth your time (the Cartier segment begins at the 37 minute mark—link below).
Korelin Weekend Show – Sat 29 Aug, 2020
Here, CEO Cloutier talks resource numbers, expectations, and timelines.
Cloutier states that this eastern section along the Central corridor—a panel measuring 550 meters by 200 meters—will likely add 500,000 ounces to the current 1,182,990 ounce resource base.
If my math is correct, that one area will push the ounce count at Chimo to nearly 1.7 million ounces.
Cloutier also details exploration work that will be undertaken at the Benoist Project, and the nearby Fenton Project. The recently closed $9.3M flow-through PP are funds that are destined to go directly into the ground. This will open up the exploration upside of Cartier’s robust project portfolio.
Though exploration work at Benoist is still in the planning stage, CEO Cloutier envisions an aggressive 20,000 meter, multiple rig drilling campaign that will test the projects (historical) resource, the depth potential of said resource, and several deep-seated IP anomalies.
Benoist’s historical (non 43-101 compliant) resource numbers as per Cartier’s Project Page:
In 1993, the historical estimate calculated by Minnova for the Pusticamica Gold Deposit is 481,851 tm grading 5.52 g/t Au, 12.10 g/t Ag et 0.27 % Cu inside of 4.63 millions of metric tons of rock grading 1,89 g/t Au (Murgor Resources Inc. press release dated January 17th, 2012).
This is a gold-rich VMS system. Take a close look at some of the project’s historical drill intercepts (map below).
Those are some fat hits.
There is a lot of excitement and anticipation surrounding this project.
With multiple rigs in play and a dynamic approach to delineating a resource base, Benoist could deliver significant value to shareholders in a short period of time.
The Fenton Project—a 50/50 JV with SOQUEM—will also be targeted for its exploration and resource potential as it lies within 50 kilometers of Benoist. Both projects can be worked concurrently.
Fenton also has a historical resource:
A historical estimate reports 426,173 tons grading 4.66 g/t Au corresponding to 63,885 oz Au of which 23,643 oz Au are located in the first 50 meters below the surface. This estimate was made in 2000 by M. Denis Chenard, Eng. Datac Geo-Conseil Enrg on behalf of Boreal Exploration from 73 holes drilled on the three main areas of the Fenton Gold Deposit. This calculation was performed with a lower cut-off grade of 2.0 g/t Au and true minimum thickness of 1.0 meter.
Now that Chimo has been pushed significantly along the development curve, Cartier’s robust project portfolio is being opened up for a similar (aggressive) push along the curve.
For a deeper delve in the company, the link below will help bring you up to speed…
July 28th, 2020, Highballer article: Cartier (ECR.V) looks to monetize flagship gold asset, sets stage for aggressive drilling campaign at Benoist project
Cartier’s newsflow will be strong over the balance of the year and well into 2021.
The company has a current market cap of $61.7M based on its 192.81 million shares outstanding and recent $0.32 close.
The company’s current cash position = just under $14M.
I like Cartier. I believe it has an endgame—I suspect the company is in the crosshairs of one or more resource-hungry predators looking to bulk their mineral inventory. But I am biased. Do your own due diligence.
END
—Greg Nolan
Full disclosure: Cartier is a Highballer marketing client. The author is long the stock.
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