Ontario-based juniors exploring across Canada
In the same way that many of Toronto’s best mining companies operate outside of Canada, many of the best Toronto-based juniors operate outside of Ontario. In this article we feature three standout projects in Canada’s east, west, and central provinces: Québec, British Columbia and Manitoba.
Québec – O3 Mining transitions from explorer to developer
O3 Mining (TSXV: OIII) reached a number of milestones in 2020, including the PEA for its Marban project in Val-d’Or, Québec, released in September. The study, led by Ausenco, used a US$1,450/oz gold price, producing a net present value (NPV) of C$423 million and an internal rate of return (IRR) of 25.2%, with an AISC of US$822 and an affordable CAPEX of C$256 million.
“The NPV of the conservative scenario of US$1,450/oz equates to twice our market cap. Out of the 3.9 million ounces that O3 Mining has already defined, less than half equates to a potential market cap two to four times our current size,” said O3 president and CEO, Jose Vizquerra, who added that there is the opportunity to extend the mineralization outside of the PEA pit and expand this resource at Marban.
This opportunity will be explored thoroughly in 2021, as on January 6th, O3 announced it had mobilized 12 drill rigs in Val-d’Or. Four of the rigs will focus on Malartic (where Marban is located) for a total of 45,000 meters (m), with the remaining eight focusing on the Alpha property for a total of 100,000 m of planned drilling.
For its 2021 exploration campaign, O3 has partnered with Mira Geoscience to define targets using artificial intelligence (AI). Vizquerra elaborated: “We are the first group in Val-d’Or to use AI by putting together historical data to create blocks of geological information, including the location of the faults, sonic alteration, and areas with the most gold and concentration of shear zones.”
Considering O3’s properties sit only 8 km from Wesdome’s Kiena mine, and 12km from the Canadian Malartic mine, which is due to run out of ore by 2027, Val-d’Or will be a hotspot of exploration, development, production, and maybe even M&A in the years to come.
“Being able to get an entire team to buy into the dream that you set out, and work towards it with a singular focus is how great discoveries are made.”
Terry Harbort, President & CEO, Talisker Resources
When BC Premier John Horgan declared that the province had its highest investment in mineral exploration since 2012 this past year, it was welcome news for Talisker Resources (TSX: TSK), who has made sizeable bets on the prospectivity of the region. The Toronto-based explorer purchased 100% of the Bralorne gold project, which lies 248 km northeast of Vancouver, from Avino Silver & Gold Mines in a multimillion-dollar cash and stock deal in December of 2019. It has since undertaken aggressive exploration resulting in an expanded drill program. As of the end of 2020, TSK has completed 21,547.95 m of drilling at Bralorne, and results continue to verify and prioritize the interpreted expansion and continuity of targeted vein corridors. According to the company’s president & CEO, Terry Harbort: “The major thing that makes the Bralorne project more attractive, is the level of de-risking that Talisker has done with its exploration drilling. We are very different to a lot of companies that are exploring and drilling and hoping they hit where the veins are and have grade or mineralization. We use the level plans, where we have been able to digitize the outline of historic veins in areas that were not previously mined. As a result, we have not only been able to build a very well constrained potential, but it also gives us good control on grade, thickness of veins and total tonnage of potential ounces that we expect to be able to drill out…We are drilling what we already know is there and we are validating that historic data to bring it into a resource base.”
Consisting of three main mines, Bralorne was one of the longest producing high-grade gold deposits in British Columbia, operating from 1929 to 1971. In 2021, TSK intends to continue to use its strong balance sheet, to ramp up drilling efforts, bringing the asset a step closer to achieving its former glory.
“The most favorable finding of the PEA is the ability to show positive project economics on deposits of our size, shape and grade. By gaining this knowledge, we are also now able to understand what size of deposits can attract the financing necessary for a company such as Rockcliff that is looking to transition from an explorer to producer.”
Alistair Ross, President & CEO, Rockcliff Metals Corp.
Perhaps one of the most influential pieces of commodity research in 2020 came from a September report by Bernstein Research titled ‘King Copper once and future’. The thesis they outlined was that all the elements of a good commodity stew are present and will likely to remain present long term. These ingredients include—a dollop of demand strength, a sprinkle of supply concerns, a rising cost curve and minimal threats from alternatives.
In fact, the fundamentals of copper are so strong, that it encouraged industry veteran Alistair Ross to come out of retirement to look for ways to mine copper that was previously considered uneconomic. Bullish fundamentals were only half the story for Ross. The other key motivation was the opportunity to think creatively and resourcefully about new ways of planning a mine. “When I joined Rockcliff Metals (CSE:RCLF), the deposits on their books suggested there was no known way to mine them profitably. I wanted to take on the challenge of creating a mining method that would have the economic capacity to turn pretty rock into a valuable asset,” Ross declared.
This journey led the company to the Flin Flon-Snow Lake area of central Manitoba, where RCLF has its 100%-owned Tower and Rail project. The secret to driving more positive economics lied in questioning old industry dogma and implementing technology in a clever way. The most common law Rockcliff tried to break away from is Taylor's Law, which provides a guideline of how many tons per day (mt/d) a miner should be able to take out of a deposit. At Rockcliff, according to Taylor’s law, the deposit suggests production of 800 mt/d, peaking at around 1,000 mt/d. The company engineered a design in its PEA that demonstrated the potential to mine 3,000 mt/d by utilizing technology not in use when Taylors Law was developed. Using the base case assumptions, the PEA also indicates that the project has technical and financial merit with an after tax NPV of US$71 million and an IRR of 30% assuming a US$3.15/lb copper price.
Ross concluded of the PEA: “The most favorable finding is the ability to show positive project economics on deposits of our size, shape and grade. This is a major step forward. By gaining this knowledge, we are also now able to understand what size of deposits can attract the financing necessary for a company such as Rockcliff that is looking to transition from an explorer to producer.”
Image courtesy of Talisker Resources