The history of major metals discoveries is rife with stories of deposits
that were only uncovered when geologists looked beyond existing
mineralization systems, or considered new models. Sometimes the best
discoveries occur when exploration takes place off the beaten path—even when
there are gold ounces underneath that path. An open mind sometimes opens
doors, to both new discoveries and greater shareholder value.
For example, Ivanhoe's Kamoa-Kakula copper deposit in the Democratic
Republic of Congo was already one of the world's richest and largest copper
discoveries when company geologists decided to look further afield. In March
2017 they drilled a new discovery—Kakula West—4 kilometers west of existing
mineralization, making an already world-class deposit even richer.
More recently, Discovery Group company Great Bear
Resources Ltd. (GBR:TSX.V; GTBDF:OTC) drilled the Bear-Rimini discovery
at its Dixie project in Red Lake, Ontario. Great Bear had been intercepting
plenty of high-grade gold mineralization at its Hinge and Dixie Limb Zones,
with a very pleasing 1-year stock chart to match. But the company's push
beyond areas of known mineralization led Great Bear to hit pay dirt with
Bear-Rimini, drilling multiple shallow high-grade intercepts a full 2.5
kilometers away from existing gold zones.
Genesis
Metals Corp. (GIS:TSX.V; GGISF:OTC) has a long way to go before being
mentioned in the same breath as Ivanhoe or Great Bear. But the company is utilizing
a similar exploration ethos at its Chevrier gold project in Quebec's Abitibi
Greenstone Belt, 35 km southwest of Chibougamau. Genesis, also part of the
Discovery Group, is in the middle of a property-wide till geochemical survey
at the claims package. It's an exploration method that has paid off for
IAMGOLD, which is drilling the nearby Monster Lake and Nelligan high-grade
gold discoveries with its JV partners.
Genesis recently expanded its Chevrier holdings to 275 square kilometers.
The goal of the program is to identify high-grade drill targets in new areas,
with a secondary focus on increasing grade and tonnage at existing deposits.
Genesis's market capitalization of $7.45 million is underpinned by a resource
estimate of 395,000 ounces Indicated grading 1.45 g/t gold and 297,000 ounces
Inferred grading 1.33 g/t (0.5 g/t cutoff for open pit, 0.95 g/t for
underground). Genesis geologists believe there is yet-uncovered high-grade
gold mineralization at Chevrier.
"The idea is to bring in fresh eyes to do systematic property-wide
exploration, for the very first time," said Genesis President Jeff
Sundar, who was recently appointed CEO in a management shuffle that saw
Adrian Fleming appointed chairman of the board (replacing Brian Groves).
Fleming has been involved in discoveries around the world and was CEO and
cofounder of Underworld Resources, which discovered and defined the White
Gold deposit in Yukon. Underworld sold to Kinross for $138 million in 2010.
North Vancouver-based Vector Geological Solutions is running the
property-wide soil sampling program. Vector and partner IOS are using a
track-mounted sampling machine to take soil samples at 200-meter lines across
the entire Chevrier property. The Fancamp Deformation Zone, the belt that
hosts Chevrier, used to be covered by glaciers. Knowing the direction of the
ice sheets and interpreting the shape and nature of the gold grains in the
till will be key to evaluating the survey results. Geological mapping,
prospecting and geophysics will follow, along with a potential drill program
later this year.
For years, Quebec has been recognized as one of the best mining
jurisdictions, globally. The province is keen to maintain that reputation and
has invested billions of dollars into Plan Nord, the extensive infrastructure
plan designed to open up the province's vast north to mining and industry. As
for Chevrier, the project is located in a mining-friendly area near major
highways and a rail line, with an airport nearby. That's a tick in the
infrastructure box.
Quebec's support extends to financial assistance for companies doing
mining exploration work in the province. The Genesis exploration program is
being funded by a $520,000 private placement that closed on May 30. Three
Quebec government-sponsored investment funds participated for $350,000 of
that total.
The Chibougamau district is heating up along with the gold price, which is
trading at about US$1,400 an ounce but has shown strength of late.
Encouragingly, Vector's exploration methodology mirrors tools used by other
companies that have successfully identified high-grade gold discoveries
nearby. Those include the Monster Lake gold deposit southwest of Chevrier,
which already hosts 433,000 ounces of gold (Inferred) at 12.14 g/t Au.
Operator IAMGOLD and JV partners TomaGold (45%) and Quinto (5%) continue to
hit intercepts above 20 g/t at Monster.
Vanstar's Nelligan project, about 25 kilometers southwest of Chevrier, is
also generating excitement. The latest assays at Nelligan, where IAMGOLD can
earn up to an 80% interest, included 6 meters grading 56.5 g/t gold and 7.7
meters grading 7.02 g/t.
And there is an ongoing takeover battle between Osisko and Agnico Eagle
that will result in a new neighbor for Chevrier. Osisko looks to have the
upper hand: Chantrell Ventures, an Osisko vehicle that will be renamed O3
Mining, recently sweetened its bid for Alexandria Minerals. The move was in
response to a hostile offer from Agnico, with both companies eyeing
Alexandria's Val d'Or land package. Alexandria also has the Fancamp property
bordering Chevrier to the south and the Embry claims to the north.
Genesis has systematically built its land position and its latest
acquisition was the Trenholme claims formerly held by Agnico Eagle. The gold
mining company had hit mineralization there—including an intercept of 1.5
meters of 4.5 g/t gold—but shifted focus and let the claims lapse. Genesis
picked up the block from a prospector who staked the claims after Agnico
left.
Dan MacNeil, Vector's founder and principal consultant, believes there is
"probably some low-hanging fruit outside the resource." MacNeil's
resume includes stints at Barrick Gold and Anglo American and his partner at
Vector, Alan Wainwright, was a co-winner of the H.H. "Spud" Huestis
prospecting award in 2013 for the exploration and development of Kaminak
Gold's Coffee gold deposit.
One of the other co-winners of the award was geologist Rob Carpenter, who
is now a Genesis advisor. Carpenter co-founded and served as the first CEO of
Kaminak Gold, which built the multi-million-ounce Coffee deposit and sold for
$520 million to Goldcorp in 2016. Carpenter will be assisting Vector and
Genesis in the hunt for high-grade at Chevrier.
People are key to any successful junior mining company and Genesis has a
rock-solid roster. The Discovery Group has racked up several wins in a bear
market, including Kaminak Gold (sold to Goldcorp), Northern Empire Resources
(sold to Coeur Mining) and ongoing drilling success at Great Bear. Principals
John Robins and Jim Paterson have come on as Genesis advisors and their
impressive track records bode well for success. In addition to Carpenter,
Genesis also added exploration geologist Garrett Ainsworth and
engineer/financier Andrew Ramcharan as advisors late last year.
The company's market cap of about $7.45 million is underpinned by the
Chevrier resource, a majority of which is open-pittable. But it's the
prospect of high-grade gold intercepts on the expanded claims package—in a
rich district with proven high-grade mineralization—that probably offers the
most upside for Genesis shares.
Genesis Metals (GIS-V, GGISF-OTC)
Price: 0.07
Shares outstanding: 109.3 million (132.2M fully diluted)
Market cap: $7.45 million
James Kwantes is the editor of Resource
Opportunities, a subscriber supported junior mining investment
publication. Kwantes has two decades of journalism experience and was the
mining reporter at Vancouver Sun, the city's paper of record.
[NLINSERT]
Disclosure: Genesis Metals is a Resource Opportunities
sponsor company and James Kwantes owns Genesis shares, which makes me biased.
Genesis Metals is a high-risk junior exploration stock. All investors need to
do their own due diligence and/or consult a qualified investment advisor.
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