Eight gold plays to watch

With gold prices on the rise, the second half of 2016 is going to be a lively time for gold projects in Canada. The following is a snapshot of eight Canadian junior explorers and developers with recent financings under their belt and ambitious programs ahead.

Atlantic Gold

Atlantic Gold (TSXV: AGB) expects to begin construction at its Moose River gold mine in Nova Scotia this summer. The company has landed a commitment for bank debt of $115 million, as well as additional equipment and other financing to cover the open-pit mine’s initial $137-million capital cost.

A mid-2015 feasibility study for the fully permitted Touquoy and Beaver Dam deposits at Moose River projected a 30% post-tax internal rate of return (IRR) and $168-million net present value (NPV), based on US$1,200 per oz. gold. The project has an eight-year mine life, with reserves of 760,000 contained oz. gold in 16.5 million tonnes averaging 1.44 grams gold per tonne. Production is expected to start in late 2017.

 

Balmoral Resources

Balmoral Resources (TSX: BAR) is starting a $4-million, 20,000-metre drill program at its Martiniere property in Quebec. The summer–fall campaign will see two drill rigs initially focus on expanding known gold zones along the Bug Lake trend.

The winter 2016 drill program returned results including 3.44 grams gold over 7.1 metres and 3.14 grams gold over 8.8 metres from the Upper Bug Lake zone, as well as high-grade intercepts from the Hanging Wall porphyry zone. Past results from the project have included up to 1,138 grams gold over 4.9 metres.

Balmoral is also advancing its Grasset nickel-PGM project in Quebec.

 

Falco Resources

Falco Resources (TSXV: FPC) is conducting a 20,000-metre drill program at its Horne 5 project in Rouyn-Noranda, Que. Drilling will target the Western Extension, which could add 5 to 10 million tonnes of ore, as well as the Quemont Extension.

A preliminary economic assessment (PEA) released in May predicts an underground mine at Horne could produce 236,000 oz. gold a year at all-in sustaining costs of US$427 per oz., net of by-product silver, copper and zinc credits. The $905-million, bulk-tonnage operation would have a 12-year life, based on indicated resources of 58.3 million tonnes grading 2.86 equivalent grams gold per tonne and 12.7 million inferred tonnes grading 3.08 equivalent grams gold.

 

Harte Gold

Harte Gold (TSX: HRT) is in the midst of a $20-million, 70,000-tonne bulk sample at its high-grade Sugar deposit in northern Ontario. The program, which will be completed early next year, should give it enough information to make a production decision.

A 2012 PEA suggested that Sugar would be profitable at US$1,200 per oz. gold. The deposit holds indicated resources of 980,900 tonnes grading 8.72 grams gold per tonne (capped) for 275,000 oz., as well as 580,500 inferred tonnes averaging 7.03 grams gold for 131,300 oz. gold.

The bulk sample, which could produce 24,000 oz. gold this year, is being processed at Barrick Gold’s Hemlo mill. Production is targeted for the third quarter of 2017, and permitting is underway.

The company is also testing for continuity between the Sugar deposit and the Wolf zone, 2 km away.

 

Integra Gold

Integra Gold (TSXV: ICG) will use data from its recent Gold Rush Challenge to inform a drill program slated for August. The contest used crowdsourcing to find promising targets at Integra’s Sigma-Lamaque gold property in Val-d’Or, Que., based on historic data.

A 90,000-metre drill program aimed at expanding the project’s Triangle deposit is already underway. An updated PEA and resource estimate should be complete before year-end.

At a cut-off grade of 5 grams gold per tonne, indicated resources stand at 3 million tonnes grading 9.04 grams gold for 872,850 ounces. Inferred resources add 2.7 million tonnes at 9.08 grams for 800,620 ounces.

A March 2015 PEA (based on a previous resource) projected a 59% post-tax internal rate of return and a $113.5-million NPV.

 

Premier Gold Mines

A busy summer awaits Premier Gold Mines (TSX: PG), whose first mine — the 40%-owned South Arturo gold joint venture (JV) with Barrick Gold in Nevada — should begin production in the third quarter.

In northern Ontario, a feasibility study for Premier’s 50%-owned Trans-Canada project, a JV with Centerra Gold, is also due in the third quarter.

This year the company expects to establish an initial resource for its Hasaga project in the Red Lake district of Ontario, after a 50,000-metre 2016 drill program. Results have included 117 metres of 1.18 grams gold and 2 metres of 57.65 grams gold.

The nearby Rahill-Bonanza project, a 44%-owned JV with Goldcorp, and Premier’s wholly owned McCoy-Cove project in Nevada will both see 10,000 metres of drilling, this year.

In addition to providing a $30-million loan and US$15 million in equity, Orion Mine Finance has agreed to provide Premier up to US$400 million to advance its projects or for potential acquisitions.

 

Probe Metals

Probe Metals (TSXV: PRB) — a spin-off of Probe Mines after its 2015 acquisition by Goldcorp — finalized a merger with Adventure Gold in June. The combined company’s flagship project is Val-d’Or East, in Quebec. A 2013 resource estimate pegged inferred resources at Val-d’Or East at 9.1 million tonnes grading 2.63 grams gold for 770,000 ounces.

Adventure also contributed 19 early-stage exploration projects in other high-profile gold camps in Ontario and Quebec, including West Timmins, Casa Berardi and Detour Quebec.

At press time, 2016 exploration plans had not yet been announced, but Probe has $22 million in its treasury to advance its portfolio.

 

Victoria Gold

With the help of a recent $24-million financing, Victoria Gold (TSXV: VIT) is updating a 2012 feasibility for its Eagle gold project in the Yukon, and hopes to add resources.

The deposit hosts probable reserves of 91.5 million tonnes at 0.78 gram gold for 2.3 million oz. gold. Indicated resources inclusive of reserves are 222 million tonnes grading 0.68 gram gold, with inferred resources adding 78 million tonnes at 0.6 gram gold.

The previous feasibility study projected a 10-year mine life, $366-million post-tax NPV and 23.5% IRR, with a $400-million initial capex. The project is envisaged as an open-pit, heap-leach mine.

This year Victoria Gold also plans to release a maiden resource for the Olive-Shamrock target, 2.5 km away from Eagle. A 12,000-metre, 2016 drill program has returned up to 144.5 metres of 1.16 grams gold and 26.5 metres of 2.16 grams gold.