It is always a pleasure to speak with Philippe Cloutier, CEO of Cartier Resources (ECR.V). ECR is embarked on a 100,000-meter drilling program at its Cadillac property on the Abitibi gold belt in Quebec.
Pretty consistently, every two or three weeks, Cartier has hard news with results from its most recent drilling. But, on December 18th, it put out an updated 43-101 compliant Mineral Resource Estimate. The chart at the top of this article tells the story.
In the world of 43-101 compliant reports a “measured” resource is the highest level before a resource becomes an actual mineral reserve. This is the first time Cartier has had a “measured resource” to include in an MRE. It is a number fund managers and institutional investors want to see before buying into a company.
The second number fund managers look at is the market cap. Cartier just passed 100 million which is often the cut-off for institutional investors.
Cloutier could not be happier. “Our drilling is turning out better than expected,” said Cloutier. “10% lower cost than budgeted. Lower cost per meter and more meters drilled.”
“You can see on the chart that we’ve added nearly a million inferred ounces and every resource estimate keeps graduating ounces to higher level value,” said Cloutier. “With our infill drilling, we have also moved half a million ounces to the measured category. And we have excellent exploration targets to bring in more ounces.”
“The price of gold has gone up so much,” said Cloutier. “We’re working on a revised Preliminary Economic Assessment to take our new ounces and the new price of gold into account. It will have sensitivity tables for the gold price, for the choice to build our own mill or toll mill, and the results of the metallurgical work currently being done.”
Gold price and gold grade affect every aspect of a project like Cadillac. For example, the current PEA includes a 100 million plus mill in the projected CAPEX. But the reality is that there are five mills with significant overcapacity within 50 kilometres of Cadillac. With the right gold price and grade, it may make a lot of sense to truck the ore to one of those mills.
Cloutier loves the innovative use of technology. About 25% of the targets in the current drilling program have been selected using AI. He is well aware of the potential of ore sorting. “We could crush and sort at the mine and avoid having to pay to truck waste rock.
“We have assay results from drilling done before Christmas, which will be coming out very soon,” said Cloutier. “And we are back out drilling now. It is actually easier and faster to drill in the winter. The ground is frozen, so you can get into areas which are muddy or swampy with no tree-cutting site preparation.”
“We’re getting higher grade results near surface,” said Cloutier. “We see visible gold frequently.”
The drilling itself has been seamless. “We have a very experienced crew, flat terrain and highway access,” said Cloutier. “We are pretty glitch proof.”
The December 18 complete MRE 43-101 Technical Report is likely to be revised before the Vancouver Resource Investment and AME Roundup Conferences January 25-29. Cloutier will be attending the Conferences and CEO’s like to have up to the minute results released before this sort of event. ECR will not have a booth but Cloutier will not be hard to find.
Investors who bought shares last summer at $0.08-0.10 have seen more than a double as ECR has risen to $0.25. But Cloutier believes there is much more to come. “Our market cap is just over 100 million,” said Cloutier. “We have over 3 million measured, indicated and inferred gold ounces and we’re finding more. We’re investing in marketing to bring the Cartier story to the attention of retail investors as well as institutions.”
Retail investors and institutions can do the math: 3 million $4000 gold ounces is 12 billion dollars’ worth of gold. Yes, it will cost money to mine and mill it, but at current gold prices the Cadillac project is very, very attractive. Or, run the math the other way: a 110 million dollar market cap means the market is valuing the ECR gold ounces in the ground at $36.00 an ounce. Since M&A is picking up in this industry Cartier is prepared on all fronts.
Which is an indirect way of pointing out that Cartier is far from fully valued. Its value will only increase as Cloutier and his team press forward with their 100,000 meters. Cartier is already planning to grow the program to 250,000 meters and adding several additional drill rigs.