Great Bear Resources (GBR) recently announced metallurgical results of 97% gold recovery at the Hinge zone of the Dixie project. Can you tell us what this means for the overall project?
The Hinge Zone was one of the original discoveries we made on the property in 2018. It is a Red Lake style, high grade gold-in-vein system and the metallurgical recoveries that we have published are in line with other miners in the area. We were expecting to get high recoveries and the tests confirmed this.
What are other ways in which GBR has progressed toward showing continuity and grade over distance in 2020?
Most of our work has been focused on the LP fault zone discovery. That is a multi-kilometer long continuous gold zone that we found in 2019, and have drilled around 100 holes since June of 2020. As we continue to drill the LP fault, we continue to see the gold mineralization and continuity. We are now showing why the high-grade gold is where it is and there is a large-scale footprint right up to surface that the zone is demonstrating.
Do you think there are any characteristics of the company that the market has not appreciated yet?
There is a lack of understanding about the potential size of the Dixie property and what it could have in terms of gold endowment. If you look at GBR, we are up to a total of 500 drill holes completed on the project. That is less important than the fact that we have a bigger system and better continuity than others at our stage. As of November 2020, we have a C$800 million market cap, and there are only two Tier 1 assets in Canada to look to in comparison. One of them is Canadian Malartic, operated by Agnico Eagle, the other is Detour Lake, operated by Kirkland Lake. Those projects were both transacted on for more than a few billion dollars net value. Therefore, if that is what we have at Dixie, which is what the market is anticipating, then we are looking at a value prospect which is multiples larger than what we have currently attained.
The Red Lake mining district has been rejuvenated thanks to gold’s bull run. With several explorers in the area, what distinguishes GBR?
GBR has the largest exploration program in the district. From a physical footprint, it is the largest gold system that has been discovered in decades in that area. At the LP fault discovery, we have drilled gold in it along 11 kilometers of strike length. There is no one else in the district that has anything like that. What we are looking at is one of the largest exploration programs and the highest success rate on drill holes. All of the drill holes that we have put in targeting our zones have hit gold mineralization, which cannot be said about any other project. The LP fault is hosted by different rocks that have a higher degree of continuity because of the difference in the type of mineralized system and the host geology.
What advice would you give to juniors who are looking to emulate the success GBR has achieved?
The key for somebody that wants to emulate the GBR experience is to have very specific ideas that you feel strongly about scientifically. First, where you might make a major discovery, and then keep the burn rate low on the company for as many years as it takes to get to that final point. It will be difficult, but if you keep the share count low and you end up making a discovery before you have diluted your share structure, you can get to a point like GBR, where during our last financing we were able to raise over C$30 million and issuing only 2 million shares. Avoiding dilution means that you can flatten the Lassonde curve, where you typically go through these early valuation peaks, and then valuation slumps later in project development. It is not easy for management to keep expenditures so low, but if you can be disciplined and do good science without cutting corners, you can get into our kind of position.