In the face of challenging financial conditions, Québec’s juniors are finding strategies to drive their projects forward.
Image courtesy of Commerce Resources
Since winning discovery of the year at the 2016 Xplor conference for its flagship Cheechoo gold asset, located in James Bay a mere 7 km from Goldcorp’s Éléonore mine, Sirios Resources has continued conducting intense exploration, reaching 50,000 m of drilling on the property. By the middle of 2019, Sirios will produce its first resource estimate, and capacity at the camp is being increased from 20 to 50 people, with improvements to road access allowing machinery to be transported to the site directly anytime of the year. Dominique Doucet, founder and CEO of Sirios, believes Cheechoo has the potential to host at least 3 million oz of gold and is bullish on its chances of becoming a significant mine in the future: “I consider the probability of a mine being developed from the project to be greater than 75%, which is remarkably high considering that the probability of a grassroots project moving into production is far below 1%.”
Another junior with ties to Goldcorp in James Bay is Eastmain Resources, which operates three different projects in northern Québec. Eastmain’s flagship asset is the Eau Claire project on the Clearwater property, for which a preliminary economic assessment (PEA) was issued in May 2018. Eastmain’s second asset, the Éléonore South project, is held in a joint venture agreement with Goldcorp and Azimut. Describing the six targets that the company is currently working on, Claude Lemasson, Eastmain’s president and CEO, said: “We are trenching, stripping and drilling. The vision is to continue work on these targets, leading to further discoveries, and advance the project itself through pre-development,” he said. Lemasson went on to praise the pro-development business approach of the Cree community in James Bay, and mentioned other benefits that mining brings to the district, including an extensive infrastructure network and the presence of HydroQuébec, which supplies energy across eastern Canada and the eastern seaboard of the United States.
One of the larger market cap juniors operating in Québec is Probe Metals, formed as a result of the sale of Probe Mines Limited to Goldcorp in March 2015 for over C$500 million. In 2016, Probe Metals acquired all of the outstanding common shares of Adventure Gold to create a well-funded Québec and Ontario-focused gold explorer and developer. The aim of the acquisition was to attain financing to rapidly advance the Val-d'Or East project, which Probe Metals has realized, with a shareholder base consisting of players such as Goldcorp, La Caisse de dépôt et placement du Québec, and SIDEX, among others. Marco Gagnon, executive VP of Probe Metals, detailed the mineralization found at Val-d’Or East: “We have already identified numerous gold zones, which are characterised by sulphide-bearing, quartz-tourmaline veins typically associated with mineralized diorite dykes,” he explained.
Market conditions have not favored the junior community since the end of the super cycle, and a collaborative approach that brings together financial resources and expertise is becoming more commonplace. One such case is Québec Precious Metals Corporation (QPM), which was formed in April 2018 as Canada Strategic Metals acquired Sphinx’s three gold projects through an asset purchase, and then teamed up with Matamec Explorations and the Sphinx management team to create the new gold exploration company. Goldcorp invested C$4 million, and an initial exploration program commenced at the Sakami gold project in Q3 2018. Normand Champigny, CEO of QPM, outlined the reasoning behind this business model: “The industry requires consolidation, as there are currently too many junior companies with too little funding in the market. It is better to offer very high-quality projects that will attract investment and encourage development,” he said. The changing landscape of junior mining in Québec has also seen companies rebrand to convey a change in focus. In 2017, GFK Resources changed its name to Opus One Resources, as it highlighted a new geological approach and a sharpened focus on its three standout properties. Opus One has properties located above the 49th parallel and therefore qualifies for the Québec Plan Nord, which translates into better tax credits for both flow through investors and the company itself. Louis Morin, CEO and director of Opus One, detailed the upside potential of the assets: “Opus One’s properties are well located, have favorable geology, are under explored, and are in low-cost exploration areas, as at this stage, only shallow drilling is required.”
Toronto-based financial services firm Red Cloud Klondike Strike takes an innovative approach to sourcing investment for mining clients, and its spin-off company, Blue Thunder Mining, will follow suit by adopting innovative solutions to find mineral deposits at its Chibougamau-Chapais property in Québec. Blue Thunder will crowd source for innovative ideas by uploading geologic reports online, according to Chad Williams, Blue Thunder’s chairman. Expanding on the theme of innovation, Williams continued: “we will be using artificial intelligence (AI) and drone-supported geophysics, as we have linked up with a big data/AI firm in Montréal that we will partner with going forward. This methodology should allow us to increase the odds of finding an economic mineral deposit.”