The Abitibi gold belt stretches from Wawa, Ontario to Val-d’Or, Quebec and rests in a storied gold mining district that has hosted over 100 mines and produced 170 million ounces of gold since 1901.
Osisko Mining (OSK.T) has been investing heavily in the Abitibi since the turn of the millennium and is currently the largest stakeholder in the Urban-Barry Greenstone Belt with over 40% of the land staked.
The jewel in Osisko’s crown is the Windfall Lake Gold deposit.
According to a PEA released by Eagle Hill Exploration in 2015, Windfall was expected to produce 106,200 ounces of payable gold annually for 7.8 years at an average cash cost of $778 per ounce.
The mine was also expected to pay for itself in just under four years with a post-tax Internal Rate of Return (“IRR”) of 17.2% – way better than taking out a CID.
To say Osisko has been active at Windfall would be a wild understatement. The company is in the midst of a massive 400,000 metre drill program where its is working to expand and upgrade its resource numbers as well as advance regional exploration.
The markets are behind Osisko one hundred and fifty percent in this effort. Why shouldn’t they?
After all, these are the same people that not only discovered the 10-million-plus ounce Canadian Malartic Gold Deposit, they were also able to design, finance and build the $1.1 billion-dollar 55,000 TPD Malartic Mine.
So, it’s no surprise that due to an almost rabid demand, Osisko was able to increase a recently announced bought deal financing to $52.0 million.
Concurrent to this offering is another $30.0 million bought deal equity financing of flow-through shares.
Let’s just say that money isn’t a problem for Osisko right now.
Since the company started a 1400 metre step out drill at Windfall at the beginning of the month, it continues to report amazing assay results including an intersection of 64.3 g/t gold over 2.3 metres.
Results will continue to pour in as there are 12 rigs in the Windfall/Urban-Barry region with another five drills be added by the end of March.
Osisko intends to continue updating its resource numbers this year with feasibility studies expected to commence in the second half of 2018. Once permitting is complete, the company expects to begin construction in 2019.
Because of this, the region itself has become an investment hotspot as other juniors attempt to capitalize on Windfall’s good fortune.
Take Spearmint Resources (SRJ.V) who announced today that it had entered into an agreement to acquire a private company’s assets of 23 claim units comprising 1,294 hectares.
The property is directly adjacent to Osisko’s Windfall Lake Project.
Spearmint President, James Nelson commented, “This gold district is one of the most exciting areas in North America. The Windfall Lake Urban-Barry area has recently seen more than 70 million dollars raised this year for projects in the direct area. Juniors such as Durango Resources Inc (DGO.V) and Beaufield Resources Inc. (BFD.V) have seen a tremendous interest due to land in this area. We are very pleased to establish an initial footprint in this much talked about gold district in Quebec, and look forward to moving onto the property as soon as possible. Quebec is one of the most mining friendly jurisdictions in the world and hosts many local experts to tap into for the work to be carried out.”
Speaking of Durango Resources…
The junior popped 55.56% during afternoon trading today after the company announced that it had received another unsolicited offer on its wholly-owned Trove Property which adjoins Osisko and Beaufield land packages.
Marcy Kiesman, CEO of Durango, stated, “Three companies in the Windfall Lake area have raised over $70 million dollars this month for exploration. As two of Durango’s immediate neighbours are drilling over 400,000 metres at Windfall, the Trove Property remains positioned for discovery. Durango’s Board of Directors is reviewing the offers for the Trove Property, however no agreements have been reached, and the Company will provide further details as they become available.”
Durango is living the high life. In just four days, the company has gone from trading at $0.07 per share to $0.28 per share today – that’s a 300% increase.
I’m thinking Durango shareholders are wearing a smile.
The success at Windfall is also creating drama for juniors operating in the region.
Beaufield Resources has been duking it out recently with Jim Deluce and the Shanghai Huaxin Group who claim to be acting on behalf of a small number of shareholders, representing approximately 11% of the company’s shares.
Within days of the company’s scheduled AGM at the end of February, Deluce/Shanghai Huaxin Group put forward nominees for Board election without warning.
Beaufield management accused Deluce/Shanghai Huaxin Group of making misleading statements in its press release and claimed this was just an attempt to remake the Board and eventually take control of the junior miner.
The AGM has been postponed until April to allow the dust to clear.
As far as I can see, the Deluce/Shanghai Huaxin Group’s nominations do seem a little opportunistic and in my opinion, some of the nominees aren’t qualified for the position.
Beaufield just closed a $6.0 million-dollar financing and has about $8.0 million in the kitty.
Also in the region, you have Aldever Resources (ALD.V) with its Urban Barry project situated approximately 13 kilometres northeast of Bonterra Resources’ Gladiator Project.
Aldever released news back in October last year that a further 282 soil samples from the project reconfirmed highly anomalous silver and gold values obtained in the regional soil sampling program completed earlier in the year.
Analysis returned results from 0.11 g/t Au and 12.4 g/t Ag with the best coming from zones adjacent to the Barry Deformation Zone and parallel to the fault system that hosts Bonterra Resources’ Gladiator Zone.
Company President, Clive Massey, commented on the results, “The Company is extremely pleased with the results of this second soil sampling program as they confirm the results observed in the previous program. On the strength of these anomalous precious metal values in soils, the Urban Barry Project now demands greater attention and prioritization, especially in light of other notable discoveries made elsewhere and in similar geology in the area.”
Which leaves us with Bonterra Resources (BTR.V).
Bonterra just announced increasing a bought deal financing back in the middle of February to $13.9 million from the original offering at the beginning of February of $6.0 million.
Gladiator has an inferred resource of 905,000 t @ 9.37 g/t Au and is located just east of Windfall Lake.
Bonterra continues to dig up impressive results at Gladiator and at the end of January announced that it had made multiple high-grade intersections at the Deep Eastern Zone of the Deposit.
Some highlights from those results included 5.0 metres grading 20.7 g/t Au (Main Zone) at ~425 metres below surface and 8.5 metres grading 15.7 g/t Au (Footwall Zone).
Nav Dhaliwal, President and CEO of Bonterra, stated, “Once again, drilling continues to indicate that the Gladiator Gold Deposit is increasing in size, and also continues to deliver consistent high-grade gold intersections. Our first step out hole to the east in 2017 has produced multiple intersections of impressive grade and width, including 5.0m of 20.7 g/t gold. In addition, a new gold zone was also discovered with excellent width, and the visual indicators of another strong horizon. We look forward to delivering continued news flow of drill results from the eastern and western extensions, and now potential newly discovered zones from the Gladiator deposits over the coming months as we complete our aggressive resource development program.”
Osisko’s dogged determination and exploration success has turned the Windfall region of the Urban-Barry into a hotbed of activity.
This is good news for an industry that lost approximately $1.4 trillion in shareholder value during the last commodity pricing downturn.
Now that the market has turned and gold is staying above $1,200 per ounce, juniors and traders have a unique “Windfall” opportunity at Urban-Barry.
Smart investors should keep this region and its operators on their radar.
–Gaalen Engen
http://twitter.com/gaalenengen
FULL DISCLOSURE: Osisko Mining, Durango Resources, Beaufield Resources, Aldever Resources, Spearmint Resources and Bonterra Resources are not EQUITY.GURU clients.