We’ve reported the progress of Cartier Resources (V.ECR) at its Chimo Mine project in Val-d’Or Quebec. It is a story which actually began long before Cartier acquired the rights to the mine.
The mine was a past producer having yielded 379,012 ounces of gold before it was shut down in 1997. During its productive life, a 965-meter shaft was sunk and a network of drifts are distributed over 19 levels. While this is flooded, it represents significant, pre-existing, infrastructure. It is a lot cheaper to dewater a shaft than to dig a new one.
Philippe Cloutier, President and CEO of Cartier, is fond of pointing out that the Chimo mine did not close because it ran out of gold, it closed because the price of gold made mining it uneconomic. The price of gold has recovered since 1997 and this makes the Chimo Mine project an opportunity.
Which Cloutier sees as a good start. “With a former producer you get a database and the infrastructure,” said Cloutier. “There is a nearby workforce, power” Adding, “factor that with undeniable gold endowment and the future looks bright”
The key to making Chimo a mine again is not only the gold which was left when the mine was closed, but also it is the gold structures which surround the shaft but which were only minimally explored when the mine was in operation. Finding and drilling those structures has been Cartier’s mission for the last two years.
“We have two years of work into the Chimo,” said Cloutier. “We’ve drilled 105 holes for a total of over 47,000 meters. We’ve demonstrated the extension of known gold zones. And we’ve found and drilled new gold zones.”
Cloutier knows that having an old mine was not enough. There are plenty of old mines in the Abitibi. What Cartier needed to do was to add ounces to the old mine and to provide a geological model which reflects the extended gold endowment which surrounds the Chimo shaft.
Cartier planned its work in phases. The first phase was designed to prove by drilling that there was mineralization below and beside the old workings. Cloutier was not surprised that Phase One delivered. Mines in the Abitibi tend to run deep and new mines have been redeveloped right under past producers. The drill holes beside the old workings were successful because they traced structures that were understood, but not explored or developed, by previous operators. Obviously, the closer to the older workings the new discoveries were, the more economic the gold they contained would be.
Phase Two of the drilling was more speculative. Working with the old database and its own mapping and structural analysis, Cartier had identified a number of targets which stood off from the old mine. Some were quite close, others were up to five hundred meters away. We reported on the early Phase Two results back in November. With all the results now in, Cartier is able to include many of its Phase Two targets in its understanding of the Chimo mine.
“Our drilling will continue with Phase Three,” said Cloutier. “And we are now moving on to building a wireframe of the 24 known mineralized gold zones on the property.”
Building a wireframe model of a deposit is an integral part of the 43-101 Resource Estimate process. Essentially you develop a computer model which takes into account the all drill hole results on the project to date. This, in turn, is part of the package which is turned over to an arm’s length, third party, consultant who actually produces the Resource Estimate.
The challenge for Cartier and Cloutier is when to pull the trigger on the 43-101 because once that Resource Estimate is published it becomes the reference point for future evaluation of the project.
“We have always under promised and over delivered,” said Cloutier. “To this point, we have been about getting the foundational stuff right. Only recently have we been creating a bit of a dream. Phase Three of our drilling is designed to keep building the dimensions of the mineralized zones.”
Cloutier is often asked, “Why drill more now?”
It is a good question and it goes to the heart of the exploration equation. While it is possible that Cartier could develop the Chimo mine itself, it is more than a little unlikely.
“At PDAC this year one dominant theme was M&A. It was all about the financial element and deal-making,” said Cloutier. “Which is all the better for Cartier. There could be very rewarding opportunities for our project and company.”
Even with the existing shaft and drifts, it is going to take a lot of money to bring the Chimo mine back into production. That implies that Cartier will have to come up with strategic alternatives.
For Cloutier. “The progress on the Chimo Mine project since 2017 has been steady and sure. Success in 2019 will be measured by how we can unlock the value all that work has created.”