Cartier Resources’s (V.ECR) CEO Philippe Cloutier has worked in the exploration business for over twenty-five years. He understands the potential of prospective properties and he knows that the very best place to find gold is where gold has already been mined. He also knows that to develop and execute a drilling program is expensive. Which is why, when we began our interview, Cloutier said, “Cartier is cash rich, we have 16 million dollars in the bank.”
It is an important point. One which investment bankers Macquarie made in a recent report when they divided junior exploration companies into “Haves and Have Nots” based on whether or not they had enough cash in the bank to fund their exploration plans. Macquarie noted that only a small group of companies are funded for their exploration plans. Cartier is one of the “Haves”.
“We’re lucky,” said Clothier. “Agnico Eagle came in as a strategic investor in late 2016. They are betting on a select number of exploration teams and we are one of them. Plus we have several very seasoned institutional investors. Those institutions will hold the stock. And most of our shareholders are sophisticated rather than flippers.”
Now that Cloutier had “set the table” it was time to discuss what these investors were actually buying. While Cartier has a number of properties, two, both in the Abitibi, stand out. The flagship property is the past producing mine, Chimo.
Chimo has a shaft which goes down to 920 meters. Which is deep, but not exceptional for the Abitibi where economic gold is found as deep as 3000 meters. Because Chimo is a past producing mine, Cartier has had access to drill logs, cores and other details which outline the shape and structure of the resource.
“We have four drills at Chimo,” said Cloutier. “Two are drilling deep: 1200 to 1800 meters. These drill holes will be wedged so that we will get three additional branches for each long hole. By wedging we can reorient the hole at depth and drill out horizontally from the vertical.”
Using the wedge holes Cartier hopes to get a sense of the deep structure of the geology which surrounds the old Chimo mine. Those structures and the drilling plan can be seen very clearly in this, short, 3D video. (link)
“At Chimo, past producers mined three sheer zones,” said Cloutier. “There are 24 known gold zones and our 44-hole drill program will cut 177 times the extensions of these historic gold zones.”
The other two drills at Chimo are deployed drilling to confirm the historical discoveries on the property. Under the National Instrument 43-101 rules, historical drill results and core cannot be included in a resource estimate until they have been confirmed by modern drilling.
“Our ongoing program leads towards a maiden resource estimate at Chimo,” said Cloutier. “Which means we anticipate a very solid news flow from now until well into the summer.”
In fact, the first of these releases came out January 18, 2018. In this release, Chimo reported mineralization at depth. Intriguingly, the holes reported were drilled 230 m and 110 m east-northeast of the existing shaft. In the release, Cloutier commented, “These new results demonstrate that the 2B and 4E Zones extend at depth and confirms their exploration potential. What is encouraging, is that the potential to develop new ounces, from these areas near the shaft, adds to those at depth along the main 5 Zones plunge.”
Part of the challenge of a 43-101 resource estimate is waiting long enough for there to be a substantial number of ounces to disclose.
“We don’t want to launch the 43-101 process too early and anchor in people’s mind a number that could only grow,” said Cloutier. While Cloutier would not be pinned down on what number he wanted to see, the bare minimum seems to be a million ounces.
“This is why we are drilling so intensely,” said Cloutier. Not needing to go back to the market for cash to drill means Cartier can afford to keep drilling until it reaches a number the market will respect.
Along with what looks like a very good chance of proving up a significant gold resource, Chimo also has the great advantage of being “downtown”, just down the road from the town of Val d’Or. “We are very close to infrastructure, roads, power and a well-trained workforce,” said Cloutier. “Being downtown really reduces the challenges.”
Overall, Cloutier views Chimo as “the lowest risk, lowest cost, highest reward” property he has seen in his career.
At the same time, Cartier is not putting all its eggs in the Chimo basket. “Our Wilson project is very near Osisko’s projected mill, in the Urban-Barry Belt, again in the Abitibi,” said Cloutier. While Wilson is not the focus of Cartier’s activity at the moment, work continues on the project, as well as on several other projects in the Abitibi.
The prospect of a firming gold price and a steady news flow should bring the market’s attention to Cartier. Cloutier is anticipating solid results from Chimo. As he points out, “Chimo did not cease producing for lack of resources but rather because of a very low price of gold. Much of the upside remains and we are focussed on revealing it.”