I’ll dispense with the usual preamble. Right to it. Y’all.
Defense Metals (DEFN.V)
In this era of escalating geopolitical tension and tight commodity supply chains, Defense Metals is exploring/developing a rare-earth elements (REE) deposit that holds strategic importance in a commodity arena dominated by Chinese interests.
The Company continues to deliver robust newsflow from its flagship Wicheeda Project where the current Indicated resource stands at 5.0 million tonnes averaging 2.95% TREO (total rare earth oxide). 29.5 million tonnes averaging 1.83% TREO round out the Inferred category (a 0.5% TREO cutoff binds both resource categories).
A first pass economic study, via a November 2021 PEA, demonstrates…
… an after-tax net present value (NPV@8%) of $517 million, and 18% IRR. A unique advantage of the Wicheeda REE Project is the production of a saleable high-grade flotation-concentrate. The PEA contemplates a 1.8 Mtpa (million tonnes per year) mill throughput open pit mining operation with 1.75:1 (waste:mill feed) strip ratio over a 19 year mine (project) life producing and average of 25,423 tonnes REO annually. A Phase 1 initial pit strip ratio of 0.63:1 (waste:mill feed) would yield rapid access to higher grade surface mineralization in year 1 and payback of $440 million initial capital within 5 years.
More recently, results from a 2021 (5,349-meter) drill campaign are being dispensed in rapid succession, and the REE values are not only high-grade, they extend over substantial widths.
A March 8th headline
The Company dropped six diamond drill holes totaling 845 meters in this press release. Drill holes WI21-39 and WI21-40 were collared from the same pad. Drill holes WI21-41 through WI21-44 were designed to test Wicheeda’s subsurface continuity 100 meters further to the north.
Drill hole WI21-40 returned 3.23% TREO over 162 meters[1]. Along with previously reported drill hole WI21-33 on section grading 3.17% TREO over 196 meters, these two holes yielded the highest-grade x width of the 2021 drill program to date. In addition to significant composite mineralized widths, these holes continue to demonstrate the presence of higher-grade zones of carbonatite at surface and at depth extending below the current resource pit shell.
(see map further down the page for Hole WI21-40)
A March 10th headline
An additional four diamond drill holes for 615 meters were presented in this one. Drill holes WI21-45 through WI21-48 were collared from the same site along the northern portion of the Wicheeda deposit.
Drill hole WI21-48 returned 2.50% TREO (total rare earth oxide) over 176 meters, including 6.14% TREO over 20 meters from surface. This drill hole terminated on the east side of the deposit 30 meters beyond the mineral resource block model.
A March 15th headline
Here, the Company trotted out two additional diamond drill holes totaling 189 meters. Drill holes WI21-45 through WI21-48 were collared from the same site within the northern sphere of the Wicheeda deposit.
Drill hole WI21-49 returned 3.79% TREO over 150 meters, including 4.77% TREO over 60 meters. WI21-49 was designed to test the continuity between drill holes WI21-33 and WI21-40 at depth.
Together, these three drill holes—WI21-33, WI21-40, and WI21-49—define a newly discovered zone of high-grade REE mineralization that occurs below both the current mineral resource and the resource pit shells.
It would appear that the Wicheeda deposit is destined to grow, perhaps significantly so.
(click on the image below to enhance)
Luisa Moreno, President, and Director:
“We are excited with the consistently high-grade results to date. Wicheeda is emerging as a world class deposit, and we are fortunate to be part of the development of this project. Drilling within the northern Wicheeda Deposit has resulted in the discovery of an emerging zone of high grade REE mineralization at depth. This area of the deposit was first tested by WI19-32, the last drill hole of our 2019 drill campaign. Drilling during 2021 has now shown high grade REE mineralization extends a further 100 metres vertically below the bottom of WI19-32, and beyond the current mineral resource extents.”
In the guts of this March 15th press release is a table (Table 1) showing ALL of the intercepts received to date from the 2021 drill campaign. There isn’t a single ‘NSV’ (no significant values) on the list. The Company is batting a thousand with the business end of the drill bit so far in this campaign.
I’m anticipating an aggressive 2022 drill campaign to follow up on the solid progress reported to date.
Over the past three months, the Defense price chart demonstrates a (constructive) stair-stepping price pattern. Traders will be watching the $0.36 level closely…
The following summary reiterates the Company’s goals for 2022, as per a January 20th press release:
- Upgrade and expand mineral resource, initiate engineering geotechnical. The drilling results will support an updated geological model for the Wicheeda REE Deposit to inform continued 2022 infill drilling to improve the confidence of the mineral resources to higher categories (i.e., measured and indicated), in addition to pit geotechnical, and hydrogeological drilling and testing.
- Optimize flowsheet – The floatation process to produce high-grade concentrate will continue to be optimized. Bench scale tests have demonstrated that the Company has more than one route for hydrometallurgy and the Company will determine the most economic and least complex route, and then conduct pilot scale tests to firm up the flowsheet.
- Start Pre-Feasibility Study – Using the results from the planned 2022 drilling program and pilot plant, the Company intends to commence the pre-feasibility study in 2H 2022 that may extend into next year.
- Environmental, Social and Governance Strategy – The Company plans to implement an Environmental, Social, and Governance strategy to follow high environmental standards, to foster stronger collaborations between the Company and the local and First Nations communities, and further strengthen the Company’s corporate governance, like the appointment of Dr. William Bird, as independent Director.
- Continue to engage end users – The Company will use product from the pilot plants to continue to engage end users and pursue off-take agreements ahead of the pre-feasibility studies.
- Strengthen balance sheet – Defense Metals will need to secure the required funding to fast track the development of the Wicheeda REE Project including the development and operation of the pilot plant with SGS and the pre-feasibility study.
Cartier Resources (ECR.V)
We haven’t been keeping close tabs on Cartier in recent months as its flagship Chimo Mine Project appears to have lost much of its momentum… and audience.
After a nice ramp-up beginning in Q2 of 2020, and with the exception of an occasional high-volume flurry in the first half of 2021, the stock has been a big disappointment.
But recent news out of the Cartier camp has generated renewed interest—note the volume spike at the far right on the chart—it coincides with this recent headline:
Cartier Signs Non-Binding LOI With O3 Mining to Acquire 100% of Chalice Gold Mines (Quebec) Inc.
On February 28th, Cartier announced the execution of a non-binding letter of intent (LOI) to acquire O3 Mining‘s East Cadillac property in the Val-d’Or gold camp of Quebec. East Cadillac lies contiguous to Cartier’s Chimo project, making it a good, logical fit.
The Transaction is subject to due diligence, corporate and regulatory approvals, completion of the review of definitive documentation and other customary closing conditions. Cartier will now work to complete its due diligence review, negotiate and enter into definitive agreements and obtain all required stock exchange approvals. For the time being, the LOI remains non-binding and may or may not result in definitive agreements being executed or regulatory approvals being obtained.
The price of admission? Approximately 46.2 million common shares of Cartier. O3 Mining will own roughly 17.5% of Cartier’s issued and outstanding shares if the deal goes through.
O3 Mining is betting on Cartier equity for the (potential) future upside at East Cadillac. O3 obviously has confidence in Cartier management.
Transaction Highlights
In acquiring O3 Mining’s East Cadillac property, Cartier will augment its land position in the prolific Val-d’Or gold camp to 29,754 hectares (refer to Figure 1 and Figure 2).
- Cartier will hold 100% interest in largest land position east of Val-d’Or:
- Immediate increase of the resource base to 714,400 oz in the indicated category and 1,527,400 oz of gold in the inferred category (***);
- Initial budget designed to increase resources and explore additional potential;
- Significantly increases exploration territory and potential for new discoveries
- Enhanced capital markets profile and exposure;
- Platform for further district consolidation;
- New partnership formed with O3 Mining.
If the transaction closes and Cartier gets busy defining drill targets at East Cadillac, it could find a whole new gear, and it has the cash to kick things off with a flurry of exploration activity.
Promptly following closing of the Transaction, a technical committee will be formed and comprised of one (1) nominee of Cartier and one (1) nominee of O3 Mining with a purpose to provide strategic advice and guidance to Cartier on exploration and development activities for the Project, and provide a forum for Cartier and O3 Mining to share their views on the exploration, development and advancement of the Project.
Philippe Cloutier, CEO of Cartier: “The acquisition provides Cartier with largest land holding along the prolific Larder Lake – Cadillac Fault east of Val-d’Or as well as a solid resource base with significant growth potential. The Simon West, Nordeau West and Nordeau deposits, immediately adjacent to the gold resources of the Chimo Mine property, provide short term targets to significantly increase our gold resources.”
José Vizquerra, President and CEO of O3 Mining: “O3 Mining is pleased to have entered into this agreement with Cartier Resources, which furthers our strategy of deriving value from certain of our exploration assets while retaining exposure to the upside as significant shareholder. This divestment is part of our go-forward strategy of finding strategic buyers for certain of our assets, who have strong management teams and are well-capitalized and technically strong operationally. We look forward to partnering with Cartier’s management team, through our board representation, and being part of Cartier’s growth story through our participation on the Technical Committee”.
For now, this is what Cartier has under the hood:
- 684,000 ounces of gold Indicated (6,616,000 tonnes at 3.21 g/t Au);
- 1,358,000 ounces of gold Inferred (15,240,000 tonnes at 2.77 g/t Au);
- $ 5.7M in cash;
- A market cap of $30.54 million (some might characterize Cartier as “cheap”).
Goldseek Resources (GSK.C)
On March 9th, Goldseek updated progress at its flagship Beschefer Project where a 4,000 meter Phase-2 drill program is nearly complete.
Goldseek Provides Beschefer Drill Program Details: Central Shallow and Deep Targets
Goldseek is another company with good connections in a prolific gold camp—the Detour Gold Trend of mining-friendly Quebec. The option terms underpinning the Beschefer deal have Wallbridge Mining betting on Goldseek equity for the Project’s future upside. That’s a decisive vote of confidence.
Beschefer represents the fulfillment of CEO Deluce’s promise to shareholders, acquiring an asset with significant resource potential that would carry flagship status. Beschefer’s Central Shallow zone holds that resource potential in management’s view.
The Central Shallow zone has seen the lion’s share of historical drilling. Four holes from this current campaign will infill this zone. Last year’s Phase-1 campaign highlighted a 28.65-meter interval grading 4.92 g/t Au, including 11.39 g/t Au over 9.1 meters.
One of the objectives of Phase-2 is to test the downdip continuity around drill hole 28 (10.28 g/t Au over eight meters).
The objective for each hole drilled during this Phase-2 campaign is detailed below:
- BE-22-15: Planned to a depth of 320 metres on the Central Deep Zone to attempt extending two mineralized stacked trends, respectively at 40 metres from hole B14-1 at 150 metres depth and 50 metres up-dip from hole BE13-035, which encountered 1.95 g/t gold over 17.85 metres
- BE-22-18: Planned to reach a vertical depth of 260 metres to attempt the down-dip extension of the Central Shallow Zone (“CSZ”) 40 metres down-dip from BE 18-048, which encountered 2.55 g/t gold over 20.01 metres
- BE-22-19: Planned to reach a vertical depth of 225 metres to attempt the lateral eastward extension of the CSZ immediately following the mineralized interval of BE-11-01, which encountered 2.9 g/t gold over 9.84 metres.
- BE-22-20: Planned to a depth of 225 metres on the eastern side of the CSZ to attempt extending the zone down-dip 50 meters from B14-4, which encountered 16.94 g/t gold over 0.79 metres
- BE-22-28: Planned to a depth of 280 metres on the eastern side of the CSZ to attempt extending the zone down-dip 50 meters from BE13-035, which encountered 10.28 g/t gold over 8.0 metres
This infill drilling along the Central Shallow zone, followed by a summer campaign of at least 4k meters, will serve as the foundation for a maiden resource estimate due by year’s end.
The labs aren’t as backed up now as they were only a few months back. We should see initial assays from Phase-2 drilling in the first week of April.
If the Company successfully tags mineralization consistent with previous campaigns, expect an acceleration in activity—up to 10k-plus meters—as the year progresses. Management believes there’s significant potential in Beschefer’s subsurface stratum. But for now, it’s a cautious approach in order to keep the cap structure tight.
With a market cap of <$4M, there’s lots of room for these shares to run should the drill bit hit its mark.
A March 9th CEO update can be accessed here.
HighGold Mining (HIGH.V)
Earlier this month, HighGold delivered a final set of drill hole assays from its flagship Johnson Tract Gold Project in southcentral Alaska—a project that boasts a high-grade resource of just under 900k ounces at roughly 10 g/t AuEq (Indicated and Inferred).
We should see an updated resource estimate before crews are mobilized back to Johnson Tract for the upcoming 2022 field season. We should also see something on the metallurgical front (a disciplined team will always gain insights on metallurgy while they drill).
Beyond the immediate resource area, there are multiple high-priority targets along JT’s 12-kilometer mineralized trend. The regional potential of this 8,475-hectare property is amplified by last October’s discovery some four kilometers northeast of the JT deposit, at Difficult Creek.
DC delivered a jaw-dropping 578 g/t Au and 2,023 g/t Ag over 6.4 meters.
The March 1st headline alluded to above:
HighGold Mining Provides Alaska JT Project Update and Reports Final Drill Holes from 2021 Season
HighGold drilled 16,198 meters in 44 holes during the 2021 summer campaign. Last year’s exploration budget was split between resource expansion and first-pass (regional) target drilling. The Company also carried out property-wide geological mapping, geochemical sampling, and prospect-scale airborne / ground-based geophysics.
Select (shallow) Zn-Ag-Au mineralized intersections:
- 3.9 meters at 1.69% Zn, 15.5 g/t Ag, in hole JT21-136 (including 1.2m at 3.42% Zn, 3.9 g/t Ag);
- 3.4 meters at 2.80% Zn, 15.3 g/t Ag, in hole JT21-138 (including 1.0m at 4.63% Zn, 19.8 g/t Ag);
- 3.0 meters at 1.50% Zn, 46.50 g/t Ag, in hole JT21-139 (including 1.5m at 2.41% Zn, 47.2 g/t Ag);
- 9.0 meters at 1.34% Zn, 0.29 g/t Au, 3.9 g/t Ag in hole JT21-140 (including 3.0m at 2.67% Zn, 0.56 g/t Au);
- 15.0 meters at 0.60% Zn, 0.38 g/t Au, 4.6 g/t Ag in hole JT21-143 (including 4.5m at 0.73% Zn, 0.63 g/t Au);
- 91.4 meters at 0.46% Zn, 0.15 g/t Au, in hole JT21-144;
- 5.1 meters at 1.26% Zn, 13.9 g/t Ag, in hole JT21-145.
According to this March 1st press release, the Company’s exploration team and technical consultants are currently working on a number of key initiatives to push the project further along the exploration/development curve, including:
- Metallurgical testwork – on drill core collected from the JT Deposit during the Program with results expected in late Q1-2022. The testwork will provide new Au/Ag/Cu/Zn/Pb recoveries to support an updated mineral resource estimate.
- Geological modeling of the JT Deposit – the 3D geological model and mineral resource domains are being revised and expanded based on new data from the 2020 and 2021 drill programs.
- Preparing an updated mineral resource estimate (H1-22) – the new JT Deposit mineral resource estimate will incorporate 27,000 meters of new drilling completed in 2020 and 2021 within the JT Deposit area since the last estimate.
- Synthesis and interpretation – of property-wide geological, geochemical and geophysical results from the Program.
- Drill planning and budgeting for the 2022 exploration season – with a focus on continued resource expansion and a large follow-up campaign with first-pass drilling within the DC-Milkbone discovery corridor.
- Project development related investigations – including evaluation of preliminary environmental baseline studies and high-level project engineering to support future project development.
Darwin Green, President and CEO:
“We are very pleased with the results of our 2021 Program and we continue to be impressed with the overall size of the JT mineralizing system and the prospectivity of the greater Project. Our step-out drilling at the JT Deposit continues to highlight the depth potential of Au-Ag-Cu-Zn-Pb mineralization and our recent high-grade gold discovery at the Middle DC prospect (4km to the northwest of the JT Deposit) and high-grade surface rock samples along the 6-km long Milkbone Trend will set us up for an exciting program in 2022. With the last of the drill results now in hand, we look forward to completing a revised mineral resource estimate, finalizing plans for the 2022 exploration program, and continuing to build on the significant exploration success achieved to date.”
On March 10th, the Company delivered assays from its Munro-Croesus Project located in the prolific Timmins gold camp of Ontario:
The highlight interval from the late 2021 drill campaign is in the headline’s text—25.80 g/t Au over 1.0 meter.
This first phase of drilling probed the #2 Vein and #4 Vein targets located one kilometer west of the past-producing (high-grade) Croesus Gold Mine.
(click on the image below to enhance)
An 8,000-meter Phase-2 campaign, designed to follow up on Phase-1 results, is currently underway. Phase-2 will also test additional high-priority targets across this newly consolidated property.
CEO Green again:
“As we embark on a sustained, multi-phase exploration campaign at Munro-Croesus it is very encouraging to have intersected widespread gold mineralization in this initial step-out drilling on two of the known vein systems. Our focus now is to continue systematic testing of these and the many other exciting prospects that surround the former Croesus Mine for new high-grade zones of Croesus-style gold mineralization. Our philosophy is to ‘drill for structure / drift for grade’ with the goal of delineating multiple permissive gold-bearing vein structures. With Phase 2 drilling now well underway, we look forward to additional results in the near term from the ongoing exploration of this recently consolidated and under explored package of prime geological real-estate.”
Last year’s discovery hole at Difficult Creek—an Opaxe Global Top 10 Best—has piqued my interest. According to a recent Joe Mazumdar interview with CEO Green, they’ll be hitting the Difficult Creek discovery area hard in 2022 (music to this shareholder’s ears).
The 2022 JT drill season is fully funded (HighGold has $20-plus Mill in the till). The details for this upcoming campaign are pending.
Prime Mining (PRYM.V)
On March 8th, Prime delivered additional drill hole assays from its wholly-owned Los Reyes Project in Sinaloa State, Mexico.
Here, the Company announced (continuing) positive drill results from Guadalupe East, one of the eight known gold-silver deposits at Los Reyes.
Drill hole 22GE-33, located along the west side of the Guadalupe East conceptual open-pit (map below), tagged a 41.6-meter-long mineralized interval within the high-grade Estaca vein, including a 4.5-meter cavity of a historic mining stope (see Figure 2).
A 1.5 meter mineralized intercept in the hanging wall, the 4.5 meter mining stope, and a 35.6 meter etw (estimated true width) mineralized interval in the footwall reveal that considerable mineralization remains in place despite previous small-scale underground mining of the high-grade Estaca structure.
The Estaca vein intercept (drill hole 22GE-33):
- 11.60 g/t Au and 219.0 g/t Ag over 1.5 meters (etw = 1.2 meters);
- 4.5 meter cavity from historic underground small-scale mining; and,
- 3.67 g/t Au and 120.5 g/t Ag over 35.6 meters (29.2 meters etw) including 6.57 g/t Au and 137.2 g/t Ag over 9.0 meters (7.4 meters etw) and including 8.39 g/t Au and 321.0 g/t Ag over 2.6 meters (2.1 meters etw).
Drill hole 22GE-32, drilled east of the current Guadalupe East conceptual open pit boundary (see Figure 3), intercepted a 3.8 meter cavity followed by a 10.3 meter intercept of high-grade mineralization. Final assay results for this drill hole, and several others from Guadalupe East, are expected shortly and will be released upon receipt.
Daniel Kunz, CEO:
“We do not normally release a single drill hole, but these results provide important information. Wide mineralized intercepts alongside historic stopes are confirming that underground mining at Guadalupe East did not extract much of the major mineralization. Further, these new drill holes are located within our conceptual open pit. We have reviewed all the cavities encountered in our drilling and believe that previous historical underground mining will not materially impact the resource potential at Los Reyes.”
According to this March 8th dispatch, eight drill rigs are currently turning at Los Reyes, four of which are now testing Guadalupe East’s San Nicholas, San Manuel, and Estaca veins along strike, at depth, and along known extensions of the current open-pit resources.
The Company has also drilled holes to determine the extent and alignment of near-surface resources at the San Nicolas and San Manuel veins. This mineralization stands to be mined in conjunction with the primary Guadalupe East pit-constrained resource.
Of the 49 drill holes where results are pending, 15 are due from Guadalupe East.
END
—Greg Nolan
Full disclosure: of the companies featured in this article, Defense and Goldseek are Highballer clients. The author owns Defense, Goldseek and HighGold stock.
(***) The Resources are presented as described in the technical report titled “NI 43-101 Technical Report and Mineral Resource Estimate for the Chimo Mine Project, Quebec, Canada, Christine Beausoleil, P. Geo. and Claude Savard, P. Geo., InnovExplo Inc., March 2021” as well as in the Technical Report titled: “2019 Technical Report & Mineral Resources Estimate : East Cadillac Gold Project, Val-d’Or, Québec, John Langton, P. Geo., Vincent Jourdain, P. Eng., MRB & Associates, April 30th 2019”.
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