Gold Exploration
Golden opportunities in the Heartland Province
In 2023, Ontario spent C$952 million on mineral exploration, slightly less than the C$990 million spent in 2022, representing 19% of exploration spending in Canada. “The province has seen great exploration success, with Ontario being ranked the number one jurisdiction in 2023 for junior exploration spending in Canada. We continue to discover new rare earth metals across the province, including cesium north of Timmins, vital for national security and the movement to clean energy,” noted George Pirie, Ontario's former Minister of Mines.
Gold was responsible for 63% of the province’s total exploration spending in 2023, with companies such as First Class Metals (FCM) carrying the momentum into 2024 and reporting a fruitful field season: “FCM has extended the North Hemlo property by 34.5 km² in executing a purchase agreement with OnGold Invest Corp. Lake sediment sampling conducted last winter indicated significant gold anomalies in the new area. Further lake sediment sampling in the center of the North Hemlo claim block obtained clusters of very anomalous gold. Our focus to date has been on the Dead Otter trend which produced the highest grab sample ever on the property and the ‘north limb’ at just under 20 g/t,” shared FCM’s CEO Marc Sale.
Market conditions have shifted the focus of FCM back towards gold exploration at the North Hemlo project located next to Barrick Gold’s Hemlo mine and the Sunbeam property near Agnico Eagle’s Hammond Reef deposit. Building good relations with the First Nations has been key for FCM, allowing it to gain six exploration permits in just 18 months. The company is currently focused heavily on Ontario, with the potential to move elsewhere if opportunities arise. Flush with a loan of £700,000 and a conditional £2.18 million strategic equity funding from the Seventy Ninth Group, FCM can now decide which of its many projects to focus on for the 2025 field season. “Whilst it is presently our intention to concentrate within the province, the alliance with the Seventy Ninth Group could mean we expand our horizons,” continued Sale.
“As generalist investors recognize the correlation between precious metals and portfolio diversification, a new wave of capital could flow into the mining sector, potentially reinvigorating junior equities.”
Alejandro Hoyos, VP, Metals & Mining Investment Banking, Stifel Canada
Near Timmins, Mayfair Gold is concentrating on converting its Fenn-Gib Gold project into a producing mine in the next five years. The land was previously owned by Pan American Silver and Barrick Gold, with an Indicated resource base of 4.3 million oz. “While the mine has the potential to support a larger scale project, we are considering the initial development of a 4,800 tpd open pit mining operation, allowing the company to proceed with a provincial permitting path and reducing the initial capital cost to advance the project to production. This development path reflects our goal of advancing the Fenn-Gib gold project expeditiously to achieve production during the current gold cycle," said Nicholas Campbell, CEO, Mayfair Gold.
In 2025, Mayfair Gold is aiming to release a PFS for Fenn-Gib alongside achieving other de-risking and permitting milestones. The company is looking at producing a smaller-scale mine to become a producer faster, acknowledging the future potential for a larger-scale project on the land at some point in the future. “What helps Mayfair Gold is our proximity to Timmins. This allows us to develop and operate a mine without needing to build our own camp. We also have excellent access to the mine, with the highway running directly through to our deposit, with grid power available within 10 km of the project,” continued Campbell.
The major highlight for First Mining Gold in 2024 was the release of the Environmental Assessment/Environmental Impact Statement, the culmination of 14 years of work. Alongside this, other important steps were taken at its Springpole asset to bring it into development. “Recently, we passed the federal conformity review, and the federal comment period has begun. This is a significant achievement, as we are one of a couple of large gold projects in Canada that are undergoing such a combined federal and provincial environmental assessment process,” explained Dan Wilton, CEO of First Mining Gold.
Additionally, an advanced FS is expected in 2026. “Ontario’s supportive government and strong track record of permitting major projects like Magino and Greenstone provide a solid foundation for progress,” continued Wilton.
A company that enjoyed a transformative 2024 is Goldshore Resources, which is conducting a PEA with G Mining Services for its flagship Moss Gold project, located just off the Trans-Canada Highway, 110 km outside of Thunder Bay, with the potential to become one of Canada’s largest gold mines. Under new management, the company has planned a 15 km winter drilling program, focused on the top 200 m of rock, with basic exploration still needed to uncover the true capacity of Moss Gold owing to 23 km of prospective structural corridors. “The main reason for this program is that the deposit has not been fully drilled yet, so we are not upgrading resources from inferred to indicated. Instead, we are focused on converting waste into ore by filling in some drill spacing gaps,” highlighted Michael Henrichsen, CEO of Goldshore Resources.
Moving into 2025, the company is looking for new deposits, eyeing a completed infill drill program and finalized environmental work to begin permitting in 2027.
Another company under new leadership is Red Pine Exploration, which updated the resource estimate on their Wawa project to 1.5 million oz, a 150% increase since 2019. The company is exploring more opportunities to expand in Ontario, targeting new land or looking to collaborate on other projects surrounding its current holdings. “We have launched a fully funded 25,000 m drilling program through July 2025, targeting new prospects and extending known deposits. This program amounts to approximately 3,500 m of drill core monthly that will provide regular news updates. This ambitious initiative includes step-out drilling to expand the gold system and wildcat drilling to explore high-potential new targets identified during 2024 prospecting,” stated Michael Michaud, president and CEO of Red Pine Exploration.
Located on the Mishibishu Lake Greenstone Belt, a region that has seen great success for Alamos Gold and Wesdome Gold Mines, Angus Gold holds a promising 290 km2 land package through its 100%-owned Golden Sky project. “The land we hold has not been systematically explored for the past 30 years, as it was primarily in the hands of smaller prospectors or companies with limited landholdings, preventing meaningful and systematic exploration,” explained president and CEO Breanne Beh.
2024 was the busiest year yet for the company, shifting focus to the Banded Iron Formation (BIF) Zone. “Our primary focus has been on the BIF Zone, which we have been developing, but Dorset has consistently delivered better-than-expected results, making it an increasingly important priority. During 2025, the new high-grade discovery along Dorset’s western extension will become a prime focus of the project,” elaborated Beh.
The new deposit yielded results of 7 g/t over 12.4 m, and the company is looking to expand westwards once again in 2025, preparing more grassroots areas for exploration.
While producers have the advantage of cash flow from the ore coming out of the ground to invest in exploration initiatives, juniors are reliant on investor sentiment to finance their projects. With challenging equity markets, Ontario’s are leveraging their expertise and resources to explore more with less. “We share resources, like using the same drilling company as Wesdome Gold Mines, which allows us to save on transport fees. There is a strong workforce in the area, available power, and infrastructure that junior companies in remote regions cannot always access,” shared Beh.
With inflationary pressures and the ever rising cost of mining, majors have been placing emphasis on growing their operations, focusing on leveraging the economies of scale to maintain profitability. This has meant that larger projects, like the recently developed Côté Gold, are becoming all the more attractive. “Springpole’s large size makes it worthwhile for majors and opens doors for partnerships, as seen with Osisko’s Windfall project. Just 50% of the production at Springpole could be significantly larger than some producing mines in the Red Lake region,” said Wilton.
For more advanced projects nearing FID, juniors are having to grapple with inflationary pressures in the aftermath of the pandemic. While prices for certain construction materials like steel have settled, labor prices remain high. “The biggest challenge for maintaining costs is people. Irrespective of the size of our project, we are competing with every other company in the region to access the best people to run the mine,” said Campbell.
“Pension funds are not investing in exploration, so resource funds continue to be the primary capital source, despite weak inflows.”
Craig Stanley, Director - Precious Metals, Raymond James
On the other hand, the US$700/oz increase in gold prices over the past year means that old resource estimates based on significantly lower gold prices do not reflect the current economic reality, opening the door for projects to have lower cutoff grades and expanded profitability. “This pricing shift allows for a large portion of our resources to be potentially mined as an open pit, which was previously not feasible and may be more profitable than using underground mining methods for the near surface gold mineralization,” said Michaud.
Furthermore, for juniors with major gold producers as shareholders, the boost in their cashflow will hopefully translate into increased spending on prospective projects adjacent to their mines: “Nowadays, a 70,000 oz/y producer can generate roughly C$275 million in revenue, creating an opportunity to develop assets that would previously not have been economically viable,” continued Campbell.
Ontario’s explorers are blessed with generous government support in the form of the OJEP and Flow-through shares scheme, among others, however, ultimately the capital markets dictate which projects turn into mines, and which will never break ground. “The Premier of Ontario and the Minister of Finance are aware of this issue, and we have an active file to address financing concerns in the junior sector. Juniors must gain financial backing to explore, build infrastructure and create jobs, and this can only be done through the markets,” said Minister Pirie.
The reality for Ontario’s juniors is that there are many factors beyond their control. Gold prices may change dramatically again, or a new government might overhaul the permitting process overnight. All they can do is focus on the project and prove to investors that their project stands above the rest. “For juniors, a compelling exploration story is vital. There is no substitute for making meaningful discoveries when it comes to success,” said Trevor Turnbull, managing director - global mining & metals, banking, National Bank Financial.
Article header image courtesy of New Gold