Orefinders assembles western Abitibi land package

Orefinders Resources (TSXV: ORX) is scooping up gold properties in Ontario’s Shining Tree district, near Lake Abitibi. The company will acquire three contiguous properties from three different landholders, bringing its Abitibi land package to 23 sq. km. 

“I’ve been aware of these properties for 10 years or more,” Orefinders CEO Stephen Stewart says. “What the area needed is somebody to put everything under one roof.”

The 100% owned properties are adjacent to Tahoe Resources’s (TSX: THO; NYSE: TAHO) Juby gold project, which contains 26.6 million indicated tonnes grading 1.28 grams gold per tonne for 1 million oz. gold plus 96 million inferred tonnes grading 0.94 gram gold for 2.9 million oz. gold.

“Whoever develops the Shining Tree district,” Stewart says, “thinking down the road, is going to require both our land package and their land package. Neither one can be ignored.”

Hoist cable at the historic Tyrenite mine in Ontario.  Orefinders Resources.

Orefinders acquired seven properties from Premet Inc. encompassing three claims and five former producing mines: the two Mann mines plus the Minto, Duggan, Bartlett and Tyrenite — which still has leftover infrastructure, including a mine shaft and several buildings. The properties share over 30,000 metres of historical drilling.

“We’re not looking to do any major grassroots exploration,” Stewart says. “It doesn’t pay to do it.”

More recent drilling by Creso Exploration at Minto in 2010 showed positive results. Hole MC-9-1 returned 82.5 metres at 13.3 grams gold per tonne and hole 9-2 returned 65.7 metres at 18.2 grams gold plus 79 metres at 4.6 grams gold.

Creso also drilled at Duggan between 2011 and 2013 and intercepted 1.52 grams gold per tonne over 75 metres in hole D3-7 and 2.2 grams gold per tonne over 34 metres including 40 grams gold per tonne over 1 metre in hole CD13-3.

Unlike the other assets, the Mann mines are silver-cobalt projects. The company says it wants to sell these assets or enter a joint venture partnership to help develop them.

“It is not part of our immediate focus,” Stewart says. “It is an outlier. Orefinders is a gold-focused, Abitibi-focused company. You will not see us go outside of those two main criteria in any substantial way.”

The deal also includes 28 Porphyry Lake claims that cover 6 sq. km and two Tyrenite mine extension claims, bringing the company’s total Abitibi land package to 67 claims and 14 patented leases.

According to Stewart, Shining Tree is under-explored and not a well understood region of the Abitibi, and as a result it will be a bigger focus for the mining industry going forward.

A partially-flooded area of Orefinders Resources’ newly-acquired, past-producing Minto gold property in Ontario’s Shining Tree gold district. Credit: Orefinders Resources.

“That’s where I think there’s going to be a huge mergers-and-acquisitions rush coming in the future,” Stewart says. “I don’t know when. It could happen tomorrow, it could happen in 2018 or 2019. Nobody knows — but I know it’s coming. And that’s why Orefinders is going to own these high quality assets. We own them 100%.”

The company also expects to release a preliminary economic assessment (PEA) for its 100% owned Mirado project in January 2018. The 23 sq. km property lies 35 km south east of Ontario’s Kirkland Lake.  It contains 10.6 million inferred tonnes grading 1.29 grams gold per tonne for 442,000 oz. gold, as of a 2013 resource estimate.

But Stewart says he does not want to define Mirado just by the PEA.

“We’re only looking at a very high grade, near surface zone which we can mine in the near term, very cost effectively, with very little capital expenditure.

“We see the Mirado, the open pit, as a little free cash flow engine that we can use to develop our properties — including the Mirado. It’s always been: let’s use this little cash flow engine to develop the Mirado because, like any project, it needs millions of dollars’ worth of drilling.”

Stewart says the biggest task Orefinders faces over the next 90 days is accumulating all the data it’s received from the different owners and putting it into a “unified, cohesive model so that we can make heads or tails of this.”

“We’re slow and steady,” Stewart says. “We try to be as risk-averse as we possibly can be in this risky business, and make smart decisions in terms of acquisitions and how we manage our existing treasury and how we manage our capital structure”

Shares of Orefinders are currently priced at 8¢ with a 52-week trading range of 10¢ to 3¢. The company has a market cap of $4 million.