Cartier Resources’ (V.ECR) announcement of a revised 43-101 Resource Estimate with over one million ounces indicated and inferred at its Chimo mine in Quebec was not actually a surprise. CEO Philippe Cloutier told motherlodetv.net what the company was going to do back in February,
“First off, we have just awarded to an independent firm the mandate to commence work on a second 43-101 Resource Estimate which will include the drilling results from the Northern and Southern Gold Corridors,” said Cloutier. “This will add to the ounces identified in the Central Gold Corridor. We’re hoping this will raise it to over 1 million ounces.”
We’ve been covering Cartier for years and when Cloutier says something will happen it happens.
The Chimo mine historically produced 400,000 ounces of gold and was shut down when the gold price cratered back in the mid to late 1990’s. Cloutier points out, “We’ve demonstrated a resource three times the size of what the Chimo Mine produced.”
With this revised resource estimate, Cartier also moved into the + 1 million-ounce league. It is a critical number because major and mid-tier miners looking at projects tend to see a million ounces as about the lowest number it makes sense to develop.
The increase in the resource estimate came from the extensive drilling Cartier has undertaken since 2017. “121 holes, 55,000 meters,” said Cloutier. “we should reach 60,000 meters, that with an inhouse review of several technical aspects of the project, will lead to a third resource estimate .”
“We’re hoping to lift this to 1.7 million ounces in the next resource estimate,” said Cloutier.
Ounces in the ground are a beginning for a mine. But mining is about costs as well as resources. “The Chimo mine is right beside the highway. Forty-five minutes from Val d’Or,” said Cloutier. “There is a skilled workforce, power and there are mills with spare capacity.”
The old workings of the Chimo mine itself, now flooded, are immensely valuable. While it will cost money to dewater those workings, compared to the cost of sinking a 1000 meter shaft that cost is insignificant.
“The resource blocks we are developing are all accessible from the existing infrastructure,” said Cloutier. “And they are shallow and open at depth.”
What that means is that the Chimo mine could re-open for a relatively low CAPEX and actually be mining valuable rock quite quickly. Cartier is working on engineering studies to explore the re-commissioning of the mine. The company is also looking at industrial sorting technologies to evaluate what impact they would have on pre-concentrating the mineralization at the Chimo Mine project.
What Cartier is envisioning at Chimo is what might be described as “light touch” mining. The Val d’Or district has a number of mills which can process the Chimo rock which means that the Chimo operator does not have to permit and build a mill. A huge saving right there. However, what may be the most important “light touch” factor is the huge advances which have been made in the field of ore sorting technology.
Mining operators build mills at their mines because trucking thousands of tons of rock is very expensive. With a shaft infrastructure that could accommodate a hoist capacity of up to 5000 tons per day Chimo’s operating numbers would be tight if all the rock had to be trucked to a mill. However, sorting the mineralization at surface should cut the amount of rock which has to be trucked in half while doubling the grade of the material processed. (Editor: This may be pessimistic. I am aware of ore sorting being used which eliminates up to 90% of the mined rock.)
A million ounces, low CAPEX, low OPEX, low environmental impact and a growing resource all make the Chimo mine an attractive target for a large or mid-tier operator. Which Cloutier sees as one of the options to create shareholder value.
“With the price of gold going up and people hunkering down because of COVID there is an additional interest for projects like Chimo Mine,” said Cloutier.
“We’re also seeing heightened interest from the retail side of the market,” said Cloutier. “Retail has lots of time to look at companies and their stories. There is more money on the street.”
There is a familiar pattern in the retail market. “First you see the price of gold going up. Then you see, and you are seeing, the senior gold miners’ shares going up. Now it is the juniors’ turn.”
Cartier was hit by the March market plunge trading as low as $0.075, but it has risen and is trading at $0.15-0.165. Perhaps as importantly, for the last few trading sessions, there has been excellent volume. “In the stock market volume is the weapon of the bull,” said Cloutier.
What drives that volume is a company doing the work which creates hard news. In the next few months, Cartier will complete its drill program on the depth extension of its new discovery east of the shaft, report the results of that drilling, complete internal engineering studies and, if Cloutier is right – and he usually is – put out a third Resource Estimate that targets 1.7 ounces. In a bull market for junior gold explorers that run of news could easily triple Cartier’s stock price.