I’ll dispense with the usual preamble this go-round. Let’s get right to it.
Forum Energy Metals (FMC.V)
On September 29th, Forum dropped the following headline:
For those new to the story, Janice Lake is Forum’s flagship asset. The property encompasses some 38,250 hectares located in north-central Saskatchewan within the Wollaston Domain, “a northeasterly-trending belt of metamorphosed lower Proterozoic supracrustal rocks deposited upon Archean granitoid basement.”
The property boasts over 20 sediment-hosted copper showings that hold the potential for multiple layers of copper mineralization.
Without a doubt, Janice Lake has district-scale potential, a claim validated by Rio Tinto’s interest in the project…
“Forum entered into an agreement granting Rio Tinto Canada a four year option to acquire a 51% interest in the Janice Lake Project by spending $10 million in exploration, making $490,000 in cash payments, and servicing the remaining $200,000 in underlying cash payments to Transition Metals Corp. Rio can earn a further 29% interest (total 80%) by spending a further $20 million in exploration over a three years (total $30 million) and making further cash payments of $150,000 to Forum (total $640,000).”
Rio doesn’t mess around with the small stuff. They’re only interested in projects that hold world-class potential.
The terms of this $30M JV are aggressive.
Rio spent over $3M on the project in less than a year. They plan to spend another $7M on a multiple phase drilling campaign, one that began with RAB drilling earlier this summer.
Back to the September 29th news:
Historical copper showings, structural and geophysical targets identified on the property—seven target areas in total—were probed with 25 RAB holes for 818 meters.
Sedimentary-hosted copper-silver mineralization currently extends for approximately 8 kilometers along strike.
“The intent of the RAB drilling was to drill short intersections of bedrock samples beneath glacial till covered areas to help delineate the extent of the sedimentary-hosted copper-silver mineralization.”
“Mapping and sampling crews took 525 outcrop samples over the 52km extent of the property. A total of 167 soil samples, 379 vegetation samples, 22.5 line km of gradient array Induced Polarization (IP) and 6.4 km of DCIP surveys were completed over the Jansem and Rafuse targets as an orientation study to test exploration methods for the rest of the property. The soil and vegetation samples have been submitted for geochemical analysis and initial interpretation of the IP data suggests that chargeability coupled with lithological and magnetic filters could be an effective targeting tool for future drilling. A 9.2 km Audio Magnetic Telluric (AMT) survey line was conducted over the Jansem/Janice target area to gain an understanding of the basin architecture and processing is underway.”
The Janice Lake exploration team is pulling out all the stops, applying good science (both geochemical and geophysical), as it homes in on the highest priority drill targets along this 38,250-hectare property.
In examining the map above, the Rafuse target has my attention. It’s a big target with multiple copper showings on surface extending for almost 3 kilometers.
An indication of the potential at Rafuse: historical drilling of short holes in 1969 yielded some good Cu grades over decent widths, including 17 meters of 0.68% Cu.
This recently concluded RAB drilling sets the stage for an aggressive diamond drilling campaign this coming winter.
Assays from these 25 (RAB) drill holes are expected within the next four to six weeks.
Rick Mazur, President & CEO:
“Rio Tinto is compiling all of the data collected from this summer’s program for planning of a potential drill program in 2021. Results from this summer’s work are expected to help refine drill targets, including the 2.8 km long Rafuse target, located 3km north of Janice which has seen limited historic drilling. Further details are expected by the end of October.”
This news release went on to state that construction of the on-site 80 person Burbidge Lake camp is now complete and positioned to serve as a base of operations for future exploration campaigns on the property.
This just in…
Forum Accelerates Earning of 100% Interest in Janice Lake Copper Project, Saskatchewan
This was a real heads up move on CEO Mazur’s part.
Here’s how events played out:
Stepping back a few weeks, Transition Metals (XTM.V), the original holder of the Janice Lake project, entered into an agreement to sell Nova Royalty Corp (NOVR.V) a basket of royalties, including one-half of a 2% NSR on Janice Lake—an NSR that would only come into fruition after Forum completed its remaining payments due on the property (as per a February 2018 option agreement).
Forum had $150k left to pay Transition to secure 100% of the project.
But without Forum making the final $150k payment to Transition, the 2% NSR was not a done deal. And Nova wasn’t interested in buying an option on the Janice Lake royalty.
CEO Mazur wasted no time seizing the opportunity.
As a condition of Transition’s royalty sale to Nova, Forum requested that the future option payments of $150,000 to Transition be waived.
This resulted in:
- the completion of the acquisition of Janice Lake;
- the 2% NSR royalty being established (immediately subject to buyback of 0.75% for $1.5 million by the Forum/Rio Tinto joint venture), and;
- Forum gaining 100% interest in the Janice Lake Project immediately, 2 years ahead of schedule.
Done deal. Forum just saved itself a tidy $150k.
Clearly, as per this October 5th Nova Royalty press release, the Janice Lake royalty formed the cornerstone of the basket of royalties purchased from Transition.
Forum, at current prices, represents a good set-up: solid management, district-scale assets, mining-friendly jurisdiction, a disciplined approach to exploration, etc.
Current prices may represent an opportunity.
Consider this: between Janice Lake (Rio Tinto JV), Fir Island (Orano Canada JV), and Love Lake (100% Forum), we could see three (3) aggressive concurrent drilling campaigns in the coming months. How many Junior’s in this arena can boast that kind of push… that kind of potential for assay-related newsflow?
On the subject of Love Lake, Forum’s district scale Ni-Cu-PGM project, I find it interesting that management has elected to drop the prospect generator business model and maintain 100% control.
Strategic Metals (SMD.V)
On October 1st, Strategic dropped the following headline:
Strategic Metals Completes Drill Program at its Mt Hinton Gold and Silver Project, Yukon
A quick review of this flagship asset, as per the press release…
“Mt Hinton is a road accessible project located in the Keno Hill District of the Tintina Gold Belt, in central Yukon. The property lies immediately southeast of silver/lead mines on Alexco Resources’ Keno Hill property, which are expected to resume production before the end of the year, and 35 km southeast of Victoria Gold’s Eagle Mine, which was commissioned in June, 2020.”
Mount Hinton drilling began back in late July. We’ve yet to see assays flow out of this ~7,000 meter program, and the delays have generated concern, especially among some of the more twitchy, weak-kneed punters out there.
Addressing these concerns, the company stated:
“Assay results of core samples from the drill holes have been severely delayed by overloading at the analytical laboratory. Problems related to COVID safety protocols have been compounded by a rapid up-tick in drill activity world-wide. Mt Hinton core processing has been further delayed by the very rigorous sampling, sample preparation and analytical techniques being used to ensure that the results are as reliable as possible given the presence of coarse gold in some veins.”
The delays are understandable, but this is a bit of a read between the lines kinda thing, what with, “… to ensure that the results are as reliable as possible given the presence of coarse gold in some veins.”
Hmmm.
Moving along…
The guts of this press release conveyed a positive overview of the 32 diamond drill holes completed during this 6,978 meter campaign.
Quoting the press release:
“The drill program tested parts of three zones within a 6 by 4.5 km area of known mineralization and gold-rich soil geochemistry. The targets in all three zones were vein complexes cutting a west dipping stratigraphic section comprising thick quartzite beds interlayered with lesser phyllite horizons and gabbro sills. These are the same units that host the mineralized veins on the adjacent Keno Hill property.”
“The majority of the holes were drilled on a series of section lines across the Granite North Zone where surface sampling returned numerous high assays, including a rock sample that graded 2,340 g/t gold and a chip sample of 26.9 g/t over 1.2 m. The section lines cross a number of sub-parallel, 5 to 25 m wide vein/breccia/alteration bands that were mapped in talus and outcrop within the up to 400 m wide zone. Collectively the section lines tested a 425 m strike length along the zone. All of the holes intersected abundant quartz veining of differing types. Many of the veins are limonite stained and contain vuggy cavities. Some veins host residual sulphide minerals, and native gold was observed in a few of them.”
Once again: “abundant quartz veining” — “native gold”… I’m liking the narrative here.
The press release went on to state:
“Five holes were drilled at the Southwest Zone where a chip sample containing visible gold assayed 200 g/t gold over 1.2 m. All five holes intersected strong structures containing quartz veining. Some of the quartz veins host arsenopyrite but most are oxidized. The holes spanned a 330 m strike length along this 1,750 m long zone. On average the holes intersected the zone about 100 m down dip of surface.”
“Three holes targeted veins in the Northern Structural Corridor. All three holes intersected mineralized veins but all were terminated for various reasons short of their ultimate target depth. The Northern Structural Corridor is a 4 km long, up to 750 m wide zone that was the main focus of earlier work on the Mt Hinton property. It contains numerous gold and silver rich veins, where historical chip samples assayed more than 10 g/t gold over widths of 1.0 to 2.1 m.”
Regarding the timing of the first batch of assays, we should see some numbers by mid-month.
According to the company, this first batch will comprise holes spanning the entire width of the first section line across the Granite North Zone.
“A comprehensive section should provide a better idea of the distribution and character of the mineralization. The drilling and sampling programs are designed to evaluate potential for both bulk-tonnage and discrete vein targets.”
The market’s reaction to this news was decidedly negative, resulting in a short-lived (20%) clip from the previous sessions close. But the sell-off was a low volume affair.
Sadly, there’s a contingent of speculators in this arena that exhibit signs and symptoms of myopia – a “lack of imagination, foresight, or intellectual insight“. These ‘investors’ rarely look beyond the headlines.
Some, particularly those with itchy trigger fingers, interpreted this headline—Strategic Metals Completes Drill Program at its Mt Hinton Gold and Silver Project, Yukon—as a “that’s all folks” – “there’s nothing to see here” – “the show’s over” type of event. Their knee-jerk response was to sell.
Of course, those of us looking beyond the intra-day swings are happy to see these casino clowns blow out their shares. Adios muchachos.
This price weakness may also represent an opportunity.
END
—Greg Nolan
Full disclosure: Forum Energy Metals is a Highballer client. The author owns shares in Forum and Strategic.
Disclaimer - Legal NoticeHighballerstocks.com (Greg Nolan) is not a licensed financial advisor and does not give investment advice.
The content of this report is for information purposes only.
Nothing contained herein should be construed as a recommendation or solicitation to buy or sell any security.
Always consult a licensed qualified investment advisor in your legal jurisdiction before making any investment decisions.
Though Highballerstocks.com (Greg Nolan) believes its sources to be credible, and the statements contained herein to be true, readers must conduct their own thorough due diligence, and or consult with a qualified investment advisor before important investment decisions are made.
Highballerstocks.com (Greg Nolan) accepts no responsibility or liability for the accuracy of the contents of this report.