The following is a Stockhouse Q&A
interview with Balmoral Resources Ltd.
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) President and CEO Darin Wagner.
For investors new to this story, Balmoral has just released an impressive set of drill results from its Martiniere gold property in Central Quebec. Can you explain to us how this impacts the expansion of your high grade zone?
Balmoral is a Canadian discovery company and our principal assets are focused in Quebec along the same geological feature which hosts the massive Detour Gold
deposit next door in Ontario - set to become Canada’s largest gold mine. We own 100% of roughly 80% of this belt and our principal focus has been on high-grade gold discoveries on our Martiniere Property where the recent drill results originate.
The latest results are some of the strongest produced to date and not only continue to demonstrate continuity of the high to bonanza grade gold zones in the near surface but also emphasize that they remain open to depths below the 400 metre level. In many ways – at least for the Abitibi region where we are working – this is shallow drilling with a multitude of deposits active well below 1,000 metres.
The new results also demonstrate near surface potential for high-grade gold mineralization over 500 metres south of the principal area we have been testing along our Bug Lake Zone offering us further expansion potential. Despite three years of work we are still learning about and making new discoveries within the Martiniere system which has demonstrated clear potential to produce strong gold grades over a broad area.
One of the drill intercepts mentioned in your press release was 9,710 grams per tonne gold over 0.57 metres. Can you discuss the significance of this result and what it says about the project.
At a stunning 312 oz/ton gold
this is not only the highest grade assay we (or anyone else) has every reported from the Detour Gold Trend it is also the highest grade assay I have had the pleasure of reporting to my shareholders in 25 years of exploring for gold globally. It’s a special intercept and tells us a great deal about exactly how strong a gold system we have at Bug Lake. The follow-up 324 g/t (or 9.45 oz/ton) intercept somewhat pales in comparison which is kind of funny as it would have been one of the strongest numbers we have reported in its own right.
Majors are looking for quality high grade economic ounces; you have filled the high grade criteria, what are your next steps to expand your resource?
It’s really just a drilling exercise. We have demonstrated that the system has high to exceptional grades, which separates it from likely 90% of what’s out there at the moment, we have demonstrated that it has lateral and vertical continuity in multiple zones and open-ended exploration potential.
Now it becomes about the eventual “ounce count” and that, in these types of systems, simply takes drilling. Over the last 2-3 years we haven’t had a market that rewarded the explorer for converting “potential into ounces”. Given that scenario we have taken a patient (prudent?) approach to expanding the zones which appears to be paying dividends if the strong performance of our share price in an otherwise pretty dull market can be seen as an indicator.
Goldcorp Inc. (TSX: T.G, Stock Forum), Yamana Gold Inc. (TSX: T.YRI, Stock Forum)and Agnico-Eagle Mines Ltd. (TSX: T.AEM, Stock Forum) were all competing for gold properties in the Abitibi Greenstone belt. Can you explain why this area is a hotbed for mineral exploration?
You could easily add another few names to that list. The Abitibi is “soul-food” for the gold miner. When times get tough they return time and time again to munch on assets in the Abitibi. It combines the attributes of jurisdicational safety/certainty, with high-grades, large deposits, one of the most experienced work forces on the planet, excellent access and an almost unparalleled history of successful/profitable mine development.
For over 100 years the Abitibi has been one of the pre-eminent gold and base metal districts in the world. We don’t see that changing any time soon with discoveries like those made by Osisko Mining Corp.
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), Detour Gold Corp.
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), Queenston Mining Inc.
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), West Timmins (our former home), Brigus Gold Corp.
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), ourselves and a long list of others. When you consider all the trials and tribulations effecting gold miners oversea’s you understand why deposits in the Abitibi command a premium over deposits virtually anywhere else on the globe.
Is the new discovery on the Grasset Ni-Cu-PGE project, located 30 kilometres east of the Detour Gold Trend project in Quebec, a benefit to Balmoral shareholders?
It’s very hard for us to contain our excitement over the Grasset discovery, especially at a time when nickel prices are soaring and there are very few new projects on the horizon. With the caveat that we are a whole 10 drill holes into evaluating the opportunity at Grasset it has already shown all the attributes of an important new discovery.
We have outlined nickel-copper-platinum-palladium mineralization for over 840 metres along strike, for over 300 metres vertically, have intersected multiple productive “horizons” and have demonstrated the presence of high-grade massive sulphides within the system. Add that the fact that very limited historic drilling has demonstrated the presence of similar mineralization in the same intrusion 8,300 metres northwest of us, with virtually no drilling between the two occurrences, you can start to understand the level of our enthusiasm.
We have four holes pending, completed at the end of the winter program, including the most visually impressive hole to date which hosts heavy sulphide mineralization over 40+ metres, in one of three mineralized horizons in the hole – the first hole into this new horizon. Finger crossed, but if we can demonstrate strong nickel grades over this kind of thickness in a new discovery with nickel reaching two year highs we think we may have something special on our hands. Apparently nickel is something you find when you set out to look for something else, like diamonds or gold!
In terms of funding, how well is Balmoral equipped to continue exploration on its properties?
Over the last couple of years we have been one of the fortunate few to have had, and been able to maintain, a strong treasury so we are in the enviable position of being able to aggressively pursue our exploration plans. Our current working capital is north of $7.0 million dollars and with “in the money” options and warrants positioned to deliver another $4.0+ million into the treasury its full speed ahead.
It is my understanding that you have had previous success in the mineral exploration sector. Can you tell us a bit about your experience?
Prior to Balmoral myself and our team co-founded and managed West Timmins Mining. Like Balmoral, West Timmins made a series of high-grade gold discoveries in an “over-looked” area of the Abitibi which resulted in the sale of the Company to Lake Shore Gold in late 2009 in an all share deal valued at $424 million dollars.
WTM’s lead asset was the Thunder Creek gold deposit which is now Lake Shore Gold Corp.
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star asset. The difference for us this time is that Balmoral owns 100% of both the Martiniere and Grasset discoveries, while with WTM we only held a 40% interest in the Thunder Creek discovery. Thus we have established our credentials in the Abitibi both as explorers but equally importantly as a group who can create significant shareholder value on the back of our discoveries.
We are also not new to the nickel-PGE space. I managed exploration for Platinum Group Metals Ltd.
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) for 7 years which included working on and evaluating numerous nickel-PGE opportunities for the company in Canada and abroad, including PTM’s Western Bushveld deposit in South Africa which is currently under development. So we understand the nature of these deposits, the key exploration and economic parameters and the intricacies of the nickel and PGE markets better than most.
Can you tell us about your management team and what kind of experience the members bring to the table?
I am very proud of our team – they collective have one of the best work ethics it’s ever been my pleasure to be associated with. Our exploration efforts are led by Mr. Richard Mann. We were very fortunate to have Richard join us after he spent several years working for Barrick Gold Corp.
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) on the world-class Porgera gold deposit in PNG. His experience with Barrick, Cominco and others make him ideally suited to help us identify opportunities which would potentially appeal to the majors.
Our marketing activities are a team effort combining the veteran wisdom of John Toporowski, who has more than 30 years “on the street”, with the youthful enthusiasm and talents of Carleigh Hoffman, the newest member of our crew. Sue Chipperfield, our corporate secretary, and Peggy Wu, our CFO, are the steady hands every Company needs to be successful.
I think our Board of Directors provides us with an ideal balance of experience, diverse opinions, technical and financial strengths. Larry Talbot is a veteran securities lawyer with a rare understanding of the technical end of the business, Gordon Neal is an experienced marketer and financier whom your readers likely recall from Mag Silver Corp.
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) as they will MAG’s former President and CEO Dan MacInnis who recently joined the Board to provide top notch technical and managerial experience in the sector. Graeme Currie, whose 30 years of experience as a mining analyst and investment banker in the space makes him ideally suited to evaluate our activities, along with myself, round out the Board.
What new developments can investors look forward to reading or hearing about in the next 3 months?
More excitement! In the near term you have the next round of results from the Grasset nickel discovery to look forward to, which we have high hopes for. Following that the drills will be turned loose again at both Martiniere and Grasset in June once things have dried up a bit on the project. On the latter front there will be a substantial push by the Company to try and understand the full extent of this new discovery over the next few months.
In our back pocket we have a couple of very exciting new targets within the 700 square kilometres we own along the Detour Gold Trend, including one which has been jokingly nicknamed the “Sexy Beast”. We will roll more details on these targets out over the months ahead as they are ready for drill testing.
We firmly believe that the discoveries at Martiniere and Grasset, as exciting as they are, represent a beginning – not an end – as we look to unlock the mineral wealth of the Detour Trend and have it join the Timmins, Kirkland Lake, Rouyn-Noranda and Val d’Or camps as one of the “go-to” take-out locations for resource hungry gold and base metal mining companies.
Disclosure: Balmoral Resources is a Stockhouse client.