Perspective: Expanding the universe of exploration capital

Perspective Issue Twenty One - April 6, 2017

Where are the Gold Majors Placing their Exploration Dollars?

By: Gary Baschuk, VP Senior Mining Analyst

After years of exploration budget cuts and a focus to brownfields exploration, we’re now seeing the majors and mid-caps hunting for quality projects and companies. Strategic investments are being made in Quebec, mainly in the Val-d’Or and Windfall Lake areas and in the Yukon, primarily in the White Gold District.

Quebec continues to be a favourite for investors. Spurred with positive drill results from Integra Gold Corp. (ICG-TSX.V) and Wesdome Gold Mines Ltd. (WDO-TSX), the Val-d’Or Camp continues to show new deposits can be discovered and old ones renewed with new ideas. Osisko Gold Royalties (OR-TSX) increased their interest in QMX Gold (QMX-TSX.V) to 16.5%, Agnico Eagle Mines picked up an interest in Cartier Resources (ECR-TSX.V) and Goldcorp (G-TSX) invested more into Probe Metals (PRB-TSX.V), all with interests in the Val-d’Or Camp.  In addition, Barrick Gold (ABX-TSX) formed an agreement with Osisko Mining (OSK-TSX) to explore the Kan Property in Nunavik Territory, Northern Quebec. In the Urban/Barry Region, which includes Osisko’s Windfall Lake Project, activity is heating up with Kinross Gold (K-TSX) investing in BonTerra Resources (BTR-TSX.V) and more recently Kirkland Lake Gold (KL-TSX) investing in Metanor Resources (MTO-TSX.V) who own the operating Bachelor Lake Gold Mine and a number of exploration properties in the Urban/Barry Region. Osisko Mining Inc. and O3 Investments Inc., a wholly owned subsidiary of Osisko Mining, purchased an interest in Beaufield Resources (BFD-TSX.V) who own property adjacent to Osisko’s Windfall Lake Gold Project.

In the Yukon, Goldcorp, armed with a reported US$100 million investment portfolio, appears to be expanding their presence in the White Gold District. After acquiring Kaminak Gold for C$520 mln in 2016, Goldcorp has been expanding their presence in this developing gold camp. Goldcorp has taken 19.9% strategic positions in Triumph Gold (TIG-TSX.V), Arcus Development Group (ADG-TSX.V) and Independence Gold Corp. (IGO-TSX.V). Agnico Eagle (AEM-TSX) has also stepped into the White Gold District taking a 19.93% interest in White Gold Corp. (WGO-TSX.V), a company with Shawn Ryan and Robert Carpenter, key personnel behind Kaminak’s Coffee gold discovery. Newmont also recently invested in the Yukon with Goldstrike Resources’ (GSR-TSX.V) at the Plateau Project. Newmont has agreed to an initial $6 mln investment for the 2017 exploration program and may subsequently opt to contribute another $25.5 mln by 2012 which would give Newmont a 51% ownership in the Plateau property. Newmont can increase their ownership to 80% with a production decision and an additional $21.5 mln investment.

Where are the Majors and Mid-Cap Gold Company’s Placing their Money?

Source: PearTree Securities Inc.

PearTree Spotlight

Agnico Eagle’s Meadowbank Mine

PearTree is proud to feature the Agnico Eagle METC Meadowbank case study video. The Meadowbank open-pit gold mine in the Kivalliq region of Nunavut – approximately 300 km west of Hudson Bay and 110 km by road north of Baker Lake – is Agnico Eagle’s first Low Arctic mine. This Canadian success story originated as a result of METC / flow through financing.

To learn more about the Meadowbank mine, click here.

Analyst Notes

By Gary Baschuk, VP Senior Mining Analyst

Below is a compilation of Selective Press Releases from Canadian Companies released since our last Perspective Issue. For past Analyst Notes please click here.

Equity Research

Integra Gold Corp. (ICG-TSX)

Triangle Deposit Resource Estimate Updated

Incorporating 117,734m of new drill results, Integra released an updated 43-101 Resource estimate for the Triangle Deposit on the Lamaque Gold Project, Val-d’Or, Quebec. Using either a 3 g/t or 5 g/t gold cut-off, Indicated Resources doubled to 1,473,530 oz or 1,189,550 oz, respectively. Of particular note is the relative small decrease in inferred ounces versus the increase in indicted ounces implying that the drilling not only converted Inferred Resources, but had a high success rate of expansion or discovery. The company notes that approximately 75% of the new drilling was infill and an additional 15,021m of drilling in 75 holes has been completed but not incorporated in this resource estimate.

Source: Integra Gold Corp.

The geological model used for the resource estimate incorporates steeply dipping (45-75 degree) ‘C’ structures cut by shallow dipping (25-55 degree), quartz-tourmaline vein ‘C-Splay’ structures. The average and maximum true width of the ‘C’ structures is 3.7m and 14.7m respectively, and ‘C-Splay’ structures is 2.6m and 15.8m respectively. Expansion to the resource is expected dominantly from deeper drilling.

Source: Integra Gold Corp.

Drilling continues at Triangle with three rigs. An updated resource estimate, to a depth of 1,800m, for the entire Sigma Deposit is expected by the end of Q2/17 and an update for Lamaque by year-end.

The PEA, discussed below, included only 1,098,515 oz from Triangle and the company believes there is potential for increased mine life at Lamaque and potential higher mill throughput due to the increase in ounces.

Details of the Resource estimate is available at:

Positive Updated PEA Released for Lamaque

In late Feb, 2017, Integra released results from an updated 43-101 compliant Preliminary Economic Assessment for the Lamaque South Gold Project located in Val-d’Or, Quebec. The PEA includes the Nov. 2016 updated resource estimate along with mine design improvements but does not reflect the updated Triangle Resource detailed above.

The PEA, which includes Indicated and Inferred Resources, illustrates a robust post-tax IRR of 43% with a 4.2 yr payback period and NPV (at 5% discount rate) of C$362.5 mln. Initial capital requirements are estimated at C$175 mln (US$ 135.6 mln) but with an expected pre-production revenue of C$64 mln (US$50 mln). The mine life, estimated at 12 yrs. (up from 4.5 yrs. in the previous PEA) includes 1.5 yrs. of pre-production and average annual production of 123,000 oz gold per year (LOM production of 1.3 mln oz). Costs are estimated to be low with All-in-Sustaining Costs (AISC) of C$824/oz (US$634/oz) and Cash Costs of C$595/oz (US$458/oz). The mining will be dominantly by long-hole method resulting in the lower costs.

After-tax NPV and IRR Sensitivity to Gold Price

Source: Integra Gold Corp.

For more details of the PEA, see:


First Cobalt Corp. (FCC-TSX.V)

Getting the Cobalt Properties Lined Up

First Cobalt has commenced building an asset base with an option to earn 100% interest in the past producing Keeley-Frontier silver-cobalt mine located in Silver Centre, just south of Cobalt, Ontario. The property is adjacent to First Cobalt’s South Lorrain land package which covers 1,950 ha and combined now encompasses 2,100 ha (21 sq km).

The Keeley-Frontier Mine was reportedly the largest producer of cobalt in the camp with production of over 3.3 mln lbs plus 19 mln oz silver from approximately 332,000 tonnes of ore. Mineralization was hosted in narrow, high-grade veins in faults often along the contacts of diabase dykes and reportedly averaged 58 oz/tonne silver and 0.5% cobalt.

To earn the 100% interest, First Cobalt plans to acquire all outstanding shares of privately-held Cobalt Projects International Corp. who hold the rights to acquire the mine from Canadian Silver Hunter Inc. Existing shareholders of Cobalt Projects Int’l will receive 4.45 mln First Cobalt shares to be exercised over a 4 to 18-month period in six equal tranches. Payment for the acquisition of the Keeley-Frontier Mine will total $1.8 mln over 5 years including work commitments of $3 mln and the production of an NI 43-101 compliant Technical Report. Upon earning a 100% interest, Canadian Silver Hunter retains a 2% NSR of which 1% can be purchased by First Cobalt through a right-of-first-refusal agreement for $1 mln within 10 yrs.

First Cobalt Property Location

Source: First Cobalt Corp.

For more details, please refer to the Press Release at:

Marathon Gold Corp. (MOZ-TSX)

Valentine Lake Continues to Yield Wide Gold Intercepts

Marathon continues to intercept wide intervals of gold mineralization on the Marathon Deposit, part of the Valentine Lake Gold Camp in Newfoundland. The new drill results are located within the Marathon Deposit Resource pit shell as reported as part of Global Resource Estimate released in mid-February. The Global Resource contains 1.388 mln oz gold grading 1.91 g/t (Measured and Indicated) plus 0.766 mln oz gold grading 2.24 g/t (Inferred). Note that the grade for most of the drill hole intercepts reported recently exceed the grade for the open pit resource. At the Marathon Deposit, the average open pit grade was 1.71 g/t gold (Measured and Indicated) and 1.99 g/t gold (Inferred).

New drill hole results, with gold cut to 45 g/t and estimated true widths, include:


  • 3.20 g/t gold over 20.9m starting only 4m from surface,
  • 1.91 g/t gold over 77.9m from 45m downhole,
  • 2.74 g/t gold over 20.9m from 220m downhole,
  • 3.79 g/t gold over 9.5m from 372m downhole.


  • 2.92 g/t gold over 67.5m from 24m downhole,
  • 1.88 g/t gold over 129.2m from 118m downhole.


  • 14.17 g/t gold over 5.4m from 91m downhole,
  • 2.32 g/t gold over 17.1m from 200m downhole.


  • 2.86 g/t gold over 3.4m from 58m downhole,
  • 2.35 g/t gold over 24.7m from 117m downhole,
  • 7.11 g/t gold over 3.4m from 160m downhole.


  • 1.97 g/t gold over 3.0m from 51m downhole.

Marathon Gold Deposit Pit Shell with Drill Hole Locations

Source: Marathon Gold Corp.

The 2017 30,000m drill program continues with over 20,000m still remaining on the Marathon Deposit. Gold Mineralization is hosted in a series of stacked, lenticular quartz, pyrite, tourmaline veins within a structurally controlled corridor. The corridor is regional in extent and Marathon has over 18km of the structure which contains numerous deposits and showings (see figure below).

Marathon Gold’s Property Location along Regional Structural Corridor Illustrating Numerous Gold Deposits and Showings.

Source: Marathon Gold Corp.

The Marathon Deposit pit shell encompasses a mineralized zone of approximately 1,500m on strike and up to 750m wide. To assist identifying additional potential mineral zones in proximity to the pit shell, Marathon has conducted a seismic survey covering 2.3km strike length by 500m width to the southwest of the Marathon Deposit Trend. We expect the survey to readily identify the controlling regional structural fault and potential parallel ones. Complete results are expected within 3 months.

Following discussions with the company, we believe the Valentine Lake Gold Camp has many geological and mineralogical similarities to the Cadillac-Larder Lake Break Camps extending from Kirkland Lake, Ont. to Val-d’Or, Quebec. Deposits from both camps generally lie on the footwall side, associated with splays, off a regional fault adjacent to a linear trend of intrusives.

In simplified terms, Newfoundland was created from the advancement of Laurentia (now North America) subducting seafloor sediments under Gondwana (now part of north Africa) and the subsequent development of a back-arc basin (circa 800-600 Ma). Subducting oceanic plate melted giving rise to plutons aligned parallel to the back-arc basin (similar to the Marianas Trench of the Pacific today or the west coast of the Americas). Continued subduction led to the upheaval of Laurentia (similar to the creation of the Andes, Sierra Nevada or BC Mountain Ranges) to form part of the Canadian Shield. Erosion to todays landscape left four distinct geological regimes in Newfoundland (from north to south) – Humber (Laurentian Continental Margin), Dunnage (Oceanic Floor), Gander (Continental Slope deposits from Avalon) and Avalon (Detached piece of West Africa).

Regional Setting of the Valentine Lake Project

Source: Modified from H. Williams, 2004 and from Marathon Gold Technical Report by Micon International, March 28, 2017

Major structural weaknesses occur along breaks between each zone. Close to the Valentine Lake Camp, the Red Indian Line, located to the north of the project area, forms a zone of structural weakness separating the Dunnage from the Gander Zone. Within the proximity of the Valentine Lake Gold Camp, occur the Victoria Lake Group – an assemblage of island arc and back arc volcanic, volcaniclastic and epiclastic rocks. This assemblage was intruded by granodiorite to gabbroic plutons. Along the southern margin of the Victoria Lake Group rests an unconformable conglomerate sequence referred to as the Rogerson Lake Conglomerate. This sequence is believed to have been formed within a fault-bounded basin. Later movement resulted in brittle deformation within the more competent intrusives and ductile deformation in the sediments. Hydrothermal fluids carrying gold, boron (tourmaline) and quartz, etc filled the brittle fracture zones creating the known deposits. Note gold showings occur in lateral zones proximal to the known faults. The setting and structurally controlled brittle deformation deposits have many similarities to those along the Cadillac-Larder Lake Break and Destor-Porcupine Fault Zone in Ontario and Quebec. In the Kirkland Lake and Val-d’Or regions, gold mineralization is dominantly hosted in quartz veins within intrusives due to brittle deformation, a similar setting to mineralization at the Marathon Deposit.

Similarities Between the Valentine Lake and Cadillac-Larder Lake Break Camps

Source: PearTree, Marathon Gold Corp., Ispolatov, V. and LaFrance, B., 2008 Society of Economic Geologists, vol. 103, pp.1309-1340More details on regional geology can be found on Marathon Gold’s website in Micon’s Technical Report on The Mineral Resource Estimate of The Valentine Lake Project, Newfoundland, dated March 28, 2017.

Details of the Geological and Structural setting of gold mineralization in the Kirkland Lake –Larder lake Belt can be found at:, and

Geological Society of Canada, Greenstone-Hosted Quartz Carbonate Vein Deposits, Benoit Dube and Patrice Gosselin

Additional details from the Press Releases can be found at:

Nighthawk Gold Corp. (NHK-TSX.V)

Indin Lake Exploration Cranks Up the Heat

Nighthawk Gold has commenced the 2017 exploration program on the 100%-owned Indin Lake Property located in the Northwest Territories.  The program includes up to 25,000m of drilling and is expected to run until late September. Drilling will commence at Colomac Zone 1.5, following up from an intersection of 7.72 g/t gold over 52.07m from hole C16-03, and will also test Colomac Zones 1.0, 2.5, and 3.5 plus the Goldcrest Sill target.

Indin Lake Winter 2017 Phase I Drill Sites.

Source: Nighthawk Gold Corp.

In addition to the drilling, Nighthawk plans prospecting and geological mapping programs focussing on drill-target definition within the recently discovered Nice Lake sill.

The Nice Lake sill is a quartz-diorite intrusion similar to the Colomac and Goldcrest sills and is located 1.5km east of Colomac. Grab samples yielded up to 2.61 g/t gold.  Limited prospecting occurred in 2016 but defined the Nice Lake sill over 4 km in strike length with unknown width.

Nice Lake Sill Location Illustrated by 2nd Vertical Derivative Magnetic Signature (Note Similarity to Colomac and Goldcrest Sills)

Source: Nighthawk Gold Corp.

Galway Metals (GWM-TSX.V)

Clarence Stream Returns More Gold for Galway

Galway reports results from eight drill holes completed at the Clarence Stream Deposit located in south-west New Brunswick. Four holes were drilled in the North Zone and four in the South Zone.

Drilling on the North Zone returned 56.2 g/t gold over 0.55m (true width) within a quartz-vein zone that grades 2.75 g/t gold over 12.8m (true width) at a vertical depth of only 36m in drill hole AD17-96. The company reports the hole was drilled between the North Zone resource (240m to the north) and a series of previously drilled intersections that have not been reported in a resource. These other holes reportedly include intersections of 5.8 g/t gold over 5.0m, 1.1 g/t gold over 19.0m, 5.3 g/t gold over 13.0m and 9.0 g/t gold over 3.0m. These previously drilled holes are located in areas 550m to the south and 840m to the southeast of the resource. The company believes the mineralization in hole AD17-96, plus the resource and the other two areas, are all part of a single deposit. The company plans to continue drilling to test this hypothesis.

Drilling in the South Zone continues to extend the mineralization at depth. Drill hole CS16-349 returned 2.1 g/t gold over 10.2m and is located only 26m below the previously reported  intercept of 10.1 g/t gold over 13.0m (including 108 g/t over 1.0m) in hole CS16-348. New drilling also returned 1.1 g/t gold over 6.2m (true width) in hole CS16-351.

For complete results and interpretation, please refer to the Press Release at:

Wellgreen Platinum Ltd. (WG-TSX)

Wellgreen Platinum Releases Metallurgical Test work Results

Wellgreen commenced a Metallurgical test program aimed at refining the recovery of payable metals as defined in the 2015 PEA and to determine the viability to produce a marketable bulk Ni-Cu-PGM concentrate. As part of the test work, Wellgreen categorized the resource into two geo-metallurgical domains: Peridotite (host to the bulk of the resource) and Clinopyroxenite. The company reports that the objectives were met with a marketable bulk Ni-Cu-PGM concentrate of 11.9% for the peridotite and 14.3% Ni-Cu-PGM for the Clinopyroxenite being achieved.  This compares quite favourably to the 10% reported in the 2015 PEA.

The following tables outline the recoveries for each element based on past test work wrt the geo-metallurgical domain.

Source: Wellgreen Platinum Ltd.

Phase II of the Metallurgical Test Program, slated for H2/17, is to include a mini pilot study aimed at producing a sufficient quantity of concentrate to further refine the process to produce a separate nickel and copper concentrate.

Furthermore, Wellgreen plans to review throughput rates, production profiles and site layout plans to ensure optimization of the project.  The company has engaged AGP Mining Consultants, Inc. and Ausenco Engineering Canada Inc. to work with the Wellgreen team to develop a new plan. In addition an updated Resource Estimate is expected in Q3/17. The company also plans to prepare an updated PEA during the latter half of 2017.

For further details, please refer to:

Important Information and Legal Disclaimers

This report has been prepared for general information purposes only and should not be considered either a solicitation for the purchase or an offer of securities. This research report does not constitute a recommendation. The securities mentioned in this report may not be suitable for all types of investors. The information contained in this report is not intended as individual investment advice and is not designed to meet any particular investment objectives, financial situations, or needs. Nothing in this report constitutes legal, accounting or tax advice.

Information, opinions and statistical data contained in this report were obtained or derived from sources believed to be reliable, but its accuracy cannot be guaranteed. PearTree Securities Inc. (“PT Securities”) and/or its affiliates and/or any of their respective officers, directors, and representatives (collectively “PearTree”) does not represent that any such information, opinion or statistical data is accurate or complete (with the exception of information contained in the Important Disclosures section of this report provided by PearTree or individual research analysts). Any opinions or analysis herein reflect the views of the Analyst as at the date appearing above, and are subject to change without notice. The Analyst writing the report is not a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in this report.

PearTree may, in exchange for remuneration, participate in the financing of companies mentioned in this report. PearTree analysts are salaried employees who may receive a performance bonus that may be derived, in part, from corporate finance income. PearTree and members of their families may hold positions in the companies mentioned in this report and may buy and/or sell these stocks on the market or otherwise.

PearTree shall not be held liable for any loss or damage resulting from the use or the implementation of the information contained herein, except to the extent that liability may arise under specific statutes or regulations applicable to PearTree. The investments to which this report relates can fluctuate in value.

Dissemination of Research

Research reports are disseminated through electronic medium or in printed copy. Clients may access reports on our website, or receive publications directly via email. PearTree strives to ensure all recipients receive research in a timely manner and at the same time.

For Canadian residents: PT Securities is registered as an Exempt Market Dealer, a Registered Portfolio Manager and Investment Fund Manager pursuant to NI-31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. PT Securities is a subsidiary of PearTree Financial Services Ltd., an unregistered firm that consults to charities on tax and other matters related to a flow through share donation program.

For US residents: The information provided herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country including the United States, where such distribution or use would be contrary to law or regulation or which would subject PearTree to any registration requirement within such jurisdiction or country.

Analyst Certification

I, Gary Baschuk, hereby certify that the views expressed in this report accurately reflect my personal views about the subject and the issuer.


Important Disclosures

Of the companies included in the report the following Important Disclosures apply:

Ticker Company 1 2 3 4 5
AEM-TSX Agnico Eagle Mines Ltd.
ADG-TSX.V Arcus Development Group Inc. x
ABX-TSX Barrick Gold Corp. x
BFD-TSX.V Beaufield Resources Inc.
BTR-TSX.V BonTerra Resources Corp.
AGH.H-TSX.V Canadian Silver Hunter Inc.
ECR-TSX Cartier Resources Inc.
FCC-TSX.V First Cobalt Corp.
GWM-TSX.V Galway Metals Inc.
G-TSX Goldcorp Inc.
GSR-TSX.V Goldstrike Resources Ltd.
IGO-TSX.V Independence Gold Corp. x
ICG-TSX.V Integra Gold Corp. x
K-TSX Kinross Gold Corp.
KL-TSX Kirkland Lake Gold Ltd.  x
MOZ-TSX Marathon Gold Corp.
MTO-TSX.V Metanor Resources Inc.
NHK-TSX.V Nighthawk Gold Corp. x
OR-TSX Osisko Gold Royalties Ltd.
OSK-TSX Osisko Mining Inc. x
PRB-TSX.V Probe Metals Inc. x
QMX-TSX.V QMX Gold Corp.
TIG-TSX.V Triumph Gold Corp.
WDO-TSX Wesdome Gold Mines Ltd.
WG-TSX Wellgreen Platinum Ltd.
WGO-TSX.V White Gold Corp.
1 The Analyst(s) preparing this report (or a member of the Analyst’s household) have a financial interest in this company.
2 PearTree has managed or co-managed or participated as selling group in a private placement for the issuer’s in the past 12 months.
3 As of the end of the month immediately preceding the date of issuance of this research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month, PearTree collectively beneficially owned 1% or more of a class of the issuer’s equity securities.
4 PearTree has visited projects of the issuer and a portion of the expenses for this travel may have been reimbursed by the issuer.
5 PearTree, the analyst or an associate of the analyst responsible for this report or any individuals directly involved in the preparation of this report hold or are short the issuer’s securities directly or through derivatives.
The research analyst is not aware of any other material conflict at the time of publication.

This newsletter is dedicated to providing insight and analysis on Canadian mineral exploration and development stories. We welcome your feedback.

PearTree Securities is the largest provider of mining flow through capital in Canada. As an exempt market dealer and portfolio manager, PearTree Securities has approximately $250 million available for investments annually.

Upcoming Conferences & Events

CIM Convention in Montreal – April 30 – May 3, 2017

Mines and Money New York – May 3-4, 2017

Canadian Mining Symposium in London, U.K. – May 9, 2017

1 2 1 Mining Investment in New York – June 6-7, 2017

Diggers and Dealers in Kalgoorlie, Australia – August 7-9, 2017

Precious Metals Summit in Beaver Creek, CO – September 18-20, 2017

Denver Gold Forum in Colorado Springs, CO – September 24-27, 2017


Contact Us

David Donato
President, Head of Banking
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416.613.3848 x446

Lisa Davis
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416.613.3848 x437

Gary Baschuk
VP Senior Mining Analyst
Email Gary
416.613.3848 x470

Danny Mah
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