Gold Development and Exploration
New mines being built and high exploration investments
It is impossible to predict when the market will start rewarding exploration activity in Québec through higher valuations, but in the meantime, the developers and explorers keep drilling, assaying, and investing in the province, which saw a strong increase in exploration investment expenditures since 2021. Gold remained the most sought-after commodity, accounting for 71% of the US$990 million total expenditures in Québec in 2021. A strong gold price almost constantly north of US$1,900/oz in 2023 ensured decent profitability for miners. Touching upon gold market fundamentals, Troilus Gold CEO and director Justin Reid assessed: “The US Dollar is losing its status as a haven, and inflationary pressures persist despite attempts to mitigate them. In this context, gold continues to be sought after as a store of value. Central banks around the world have been purchasing more gold than ever before.”
The World Gold Council forecasting high demand for the commodity given the macro-environment, along with Québec’s tradition of valuable discoveries, means the province is well-positioned to remain a hotbed for exploration.
Discoveries made in regions mined for centuries suggest that some areas of Québec are still abundant with mineral potential. The latest investment figures do not lie: Côte-Nord (US$1,421 million), Nord-du-Québec (US$1,341 million), and Abitibi-Témiscamingue (US$1,334 million) received 95.4% of the around US$4 billion invested in exploration in Québec in 2021. The discovery pipeline in Québec’s major mining camps – Malartic, Rouyn-Noranda, Val d’Or, Matagami, Casa Berardi, and Chibougamau – suggests a busy exploration and deal-making scene in 2024, with, hopefully, shareholders seeing firms’ achievements finally being rewarded by a stubborn market.
Eyeing the big league
By mid-decade, the historic gold production scene in Québec will have welcomed several newcomers. Abcourt Mines owns the past-producing Sleeping Giant mine and mill located between Amos and Matagami and should (normally) become the next producer in Québec, as early as 2024 - an unusual sight for a company with a C$26 million market cap. But the firm doubled the existing resource with a new estimate in December 2022, and the June 2023 PEA detailed an NPV of C$54 million and an IRR of 33%. Abcourt CEO Pascal Hamelin believes his firm can grow the existing resource to over a million ounces, and expanding on plans: “We are headed towards pre-feasibility, construction financing (for underground development to access the new zones). We could be pouring gold as quickly as the fall of 2024.”
Another company breathing new life into a past-producing mine is Toronto-based Troilus Gold. Five years after going public, Troilus Gold is now poised to become one of Québec's largest gold and copper producers and has on short notice conducted an extensive drilling program, (over 340,000 m), leading to the discovery of the high-grade X22 zone. Throughout 2023, the firm continued to extend X22, as the target keeps revealing high-grade intercepts, most recently some at 103.81 g/t AuEq over 1 m, and 18m at 1.34 g/t AuEq, including 2 m at 7.16 g/t AuEq. Expecting to obtain permits by the end of 2024, and recalling the advantages of operating in Québec, Troilus Gold’s CEO and director, Justin Reid revealed his bullish stance: “The combination of a favorable jurisdiction, the scale of our project, a robust balance sheet, and the support we receive from the government provides a solid foundation for a highly successful project.”
Climbing the few floors on Avenue des Canadiens de Montréal to Osisko Mining’s office is worth the detour if only to witness some of the intercepts from the Windfall deposit. The firm’s flagship property, since the May 2023, 50/50 JV with Gold Fields, returned rocks impregnated with gold veins and samples of 65 g/t. With 3.3 million oz/Au inferred and 12,287 million t at 8.4 g/t, the project has been deemed by some as the highest-grade discovery in Québec recently. What is unique is the deposit’s potential to deliver in the future beyond Windfall. Discussing the inflow of capital from Gold Fields in the project, Osisko Mining’s president, Mathieu Savard, expanded: “Windfall is probably one of many more discoveries in that district, and that capital will sustain exploration for the years to come.”
A dozen kilometers away from the Canadian Malartic complex, O3 Mining’s Marban Alliance project keeps advancing intelligently. The firm recently announced a maiden resource at Malartic H, located between the northwestern extensions of the Marbenite and Norbenite shears, and eyes production in 2027. Selling assets and deal-making to ensure a healthy balance sheet is a core component of president and CEO José Vizquerra's strategy. The firm sold its Garrison property to Moneta Resources, effectively becoming the largest shareholder in the company. “We repeated the same process with Cartier Resources. Now, the Chimo project with our East Cadillac project will be valued much more than separately. We now own 14.2% of Cartier after vending the asset.”
Recent months saw significant consolidation in Québec’s most prolific districts. Covering 19 km of favorable strike along the prolific Destor-Porcupine Fault Zone, First Mining Gold’s Duparquet and adjacent properties collectively represent one of the top four largest undeveloped gold projects in Québec. Hoping to unlock a new wave of successful exploration, First Mining picked up Porcupine East from IAMGOLD, allowing the company to tighten its grip on the Duparquet district. CEO Dan Wilton explained the decision-making process behind the decision: “What we are most excited about is the drilling done at satellites around Duparquet. This will allow us to follow the known mineralization and lead to a low-risk high-return exploration opportunity.”
"The demand for physical gold has remained strong with record-level central bank buying and uncertain economic times, with inflationary pressure suggesting demand will stay strong going forward."
Matthew Hornor, President and CEO, Maple Gold Mines
Explorers with common goals and different strategies
In the current environmental and macroeconomic climate, the patience that an experienced management team brings is invaluable. Capital is rare, and drilling is expensive, making finding the perfect strategic balance vital. In April 2023, Cartier Resources released a PEA, but its summer 25,000-m drill program was cut short by the wildfires, with only 200 m remaining in the program. Seeing the glass half-full, president and CEO Philippe Cloutier assessed in June: “We would have preferred to continue drilling, but with US$3 million in the bank, the forest fires raging, and the markets not paying attention, the situation is perfect for us right now.”
Cartier Resources announced new intersections of up to 9.6 g/t at the Chimo mine and East Cadillac properties.
Creating value through successful drill holes is a strategy that will not displease any shareholders and one that Fury Gold Mines actively pursued in 2023. The firm hit one of its best drill holes at its Eau Claire flagship in James Bay at the end of 2022, and intercepted 13.5 m at 8.05 g/t Au. Such strikes are like breaths of fresh air in such a suffocating period for gold juniors. For Tim Clark, Fury’s CEO: “Over the past few years, we have seen our share price pull back along with the rest of the industry. Fortunately, Fury Gold has been able to unlock value through positive drill results.”
Hunter or hunted? Having released a mineral resource estimate (MRE) at its Philibert property in August, Northern Superior Resources established the pillar it needed to further its consolidation strategy in the Chibougamau camp. With Philibert located adjacent to IAMGOLD’s Nelligen and Monster Lake projects, and the MRE showcasing Philibert’s high-grade compared with its neighbors, the coming months will determine the directions that the seemingly inevitable consolidation will take in Chibougamau. Touching upon what makes the camp’s particularities unique, president and CEO of Northern Superior CEO Simon Marcotte detailed: “Lac Surprise is adjacent to Nelligan, which already has a resource of 2 million oz in the indicated category and 3.6 million oz inferred. Enlarging that radius to 17 km allows us to include Monster Lake, which has a resource carrying a grade of 12 g/t, and Chevrier, which has a sizable resource with enormous potential.”
Untapped potential in the Abitibi
Having yielded over 200 million oz of gold, the Abitibi region will still be the mother of multiple future discoveries. This opinion is shared between Canada’s finest gold mining executives, geologists, and financiers. Amex Exploration, one of the province’s best success stories in Québec market capitalization-wise in recent years, keeps generating targets for its Perron project. The firm did its biggest-ever financing of close to C$50 million in 2022 and is advancing the newly discovered Team Zone as both an underground target, as well as a near-surface open pit type system. Speaking of the Abitibi Greenstone Belt, president, and CEO Victor Cantore forecasted: “Amex has found gold in an area that has never seen gold before, and thus the answer is clearly and quantifiably that future discoveries will be made. I believe there is much more discovery potential across the entire Belt.”
Numerous are those who assess that Québec’s miners have only scratched the surface of the Abitibi Greenstone Belt. The Cadillac Fault is well understood, but considering that the Windfall deposit was not discovered until a few years back, the potential for untapped geological endowments remains enormous. Matthew Hornor, president and CEO of Maple Gold Mines, which recently released the first phase of deep drilling at the past-producing Telbel mine area of its 50/50 JV Joutel project (with Agnico Eagle), is of that opinion: “The Abitibi is well endowed, and I expect there will be gold mines producing new ounces here 100 years from now.”
Great discoveries start with great explorers, and Québec proudly boasts another resource envied by the entire world: its talent. Producers, developers, and explorers alike praise the skilled labor in Québec. Recalling that firms like Agnico Eagle, Barrick, and Teck started their journey in the Abitibi decades ago, Pascal Hamelin summarized the pride of Québecois miners: “There is a lot of talent here, people are proud miners, mining is perceived well, and people understand the wealth it generates.”
Image courtesy of O3 Mining