Shades of Great Bear in Metals Creek


“My identify is alternative, and I’m paging Canada.“

—Joseph Hirshhorn, famed mining entrepreneur and member of Canadian Mining Corridor of Fame 1933

If the adage within the mining enterprise is “that the very best place to discover a mine is subsequent to an previous mine,” there is no such thing as a higher place to search for gold than subsequent to the three largest mines in Canada. Metals Creek Sources Corp. (MEK:TSX.V) is an organization that I consider deserves a more in-depth look as it’s engaged on the previous producing Dona Lake undertaking previously operated by Placer Dome, and the extremely potential previous producing Ogden property within the coronary heart of the Timmins Gold Camp, essentially the most prolific gold camp in Canada that rivals a few of the finest treasured metals districts on the earth.

Background

In an article on Nice Bear Sources Ltd. (GBR:TSX.V; GTBDF:OTCQX), linked right here, we noticed an organization that checked plenty of the containers when taking a look at doubtlessly investing in a gold exploration firm. It was in an ideal historic gold-producing district, the place discoveries have been become mines for the previous century. It had nice administration and geologists. Additionally it is useful to have a good share construction, with administration proudly owning shares, in order that their objectives are aligned with the opposite shareholders.

After I first began following Nice Bear Sources, like most juniors, it was onerous for it to lift cash. The shares bounced round with the volatility that comes with the sector; the corporate didn’t have any huge traders championing the story. Whereas we researched the story, we had no concept that every part was about to alter.

The now well-known drill outcomes got here out, and the famed Purple Lake investor and former Goldcorp chairman and founder stepped in and purchased ~10%. Couple that with steady higher outcomes, and the remaining, as they are saying, is historical past. Nice Bear’s share worth went from $0.50 to $29.00 after the takeover by Kinross Gold Corp., and fewer than three years from the article we wrote. Nice Bear Royalties Corp. was additionally spun out from the corporate.

So, I’m motivated to search for different corporations that might additionally mirror that type of success, whereas recognizing that mineral exploration is a high-risk enterprise, and replicating Nice Bear’s success is a mighty tall order. Nevertheless, it’s also true that success within the discovery part of a mining undertaking’s lifespan has created the best shareholder wealth within the useful resource sector. We search for these corporations for part of our portfolio on mining corporations, realizing the percentages are 1 in 1,000. Our preliminary analysis led us to Metals Creek, and I made a decision to have a more in-depth look.

Combining Basic and Technical Evaluation Recap

I display corporations on each technical and fundamentals, however typically I’m first alerted to an organization by bullish chart patterns, and a decisive breakout over what we name “The Level of Recognition,“ or POR. I first recognized Metals Creek on this chart under, and armed with the bullish sequence of worth aims in it I got down to search for the basics to search out the solutions as to why the corporate’s chart seems so bullish to us, and I revealed the charts on LinkedIn and Twitter again in July 2020.

Metals Creek then adopted up and hit and exceeded first targets, opening up new targets.

About Metals Creek Sources Ltd. 

Metals Creek is a Canadian public firm exploring world-class gold targets on the previous producing Dona Lake Mine within the Pickle Lake space of NW Ontario and has signed an settlement with Newmont Corp. (NEM:NYSE), the place Metals Creek can earn a 100% curiosity previously producing Dona Lake Gold Undertaking within the Pickle Lake Mining District of Ontario.

Metals Creek additionally operates the Ogden Gold Undertaking in Timmins, Ontario, as a 50/50 three way partnership with Newmont. Metals Creek stays the operator and applications can be funded on a 50/50 foundation going ahead. Latest outcomes from the TOG Zone have returned excellent intercepts of two,732 g/t Au over 0.93 meters inside a broader zone of mineralization consisting of 210 g/t over 12.5 meters and 9.46 g/t Au over 18.55 meters with seen gold in core. Additionally, Metals Creek’s settlement contains the previous producing Naybob Gold mine, positioned 6 km south of Timmins, Ontario. It has an 8 km strike size of the prolific Porcupine-Destor Fault (P-DF).

Administration contains Sandy Stares, president and chief government officer; Michael MacIsaac, vice chairman of exploration; and Director Wayne Reid. Stares is a member of 2007 PDAC Invoice Dennis Award-winning Stares/Keats prospecting household. Metals Creek can also be engaged within the identification, acquisition, exploration, and growth of different mineral useful resource properties, and presently has mining pursuits in Ontario, Yukon, Newfoundland, and Labrador. These different properties have given the corporate a inventory portfolio in numerous junior mining corporations price about $2 million.

A seasoned veteran of mining cycles and born into certainly one of Canada high prospecting households, Stares is pictured right here under, together with the drills turning.

Share Construction

The corporate has greater than $4 million within the treasury to finish the upcoming drilling at Dona Lake and the following part of exploration and drilling at Ogden. The corporate continues to be anticipating drill outcomes as we write this text.

  • Issued and excellent: ~140,000,000.00
  • Warrants: ~ 48,053,346
  • Inventory choices: ~9,700,000.00
  • Complete O/S: ~200,000,000
  • Money and marketable securities: ~4.5 million
  • Insider holdings: ~10.5% Associates and Household ~25%
  • Establishments: Crescat Capital ~10%

Backstory: Timmins Based on Goals; Canada’s Biggest Goldfield

“No prospectors, no mines, no civilization.”

—William Sulzer former governor of New York 1933

The Metals Creek previous producing Ogden Property is within the Timmins space and is without doubt one of the richest goldfields on the earth. Over the previous century has produced extra gold than any mining camp in Canada.

The Timmins-Porcupine District lies throughout the Abitibi greenstone belt and has been the best gold subject in North America, having yielded greater than 70 million ounces of gold and counting over the span of about 100 years, from mines equivalent to Hollinger, McIntyre, Dome, Pamour, Hallnor, Hoyle, and Hoyle Pond. Provincial geologists first recognized gold in quartz veins close to Porcupine Lake in 1896. Just about all of the mineralization has come from quartz-carbonate lode techniques hosted by greenshist facies metamorphics, and are present in a hall as much as 10 km broad, parallel and to the north of the foremost regional Porcupine-Destor Fault.

Within the spring of 1909, a prospecting workforce led by Harry Preston and Jack Wilson found a hill of quartz stuffed with gold and known as it “The Large Dome,” later known as the Dome Mine. As legend has it, Jack Wilson slipped on a rocky knoll that appeared like a “dome” and his caulk boots stripped the moss away from the rock to disclose a big vein of gold, later known as the Golden Staircase. This discovery set off the nice Porcupine Gold Rush. Later the identical 12 months, the Hollinger and McIntyre gold deposits have been found. The villages of South Porcupine, Timmins, and Schumacher sprang as much as serve every of the “Large Three” mines developed on these gold deposits. In the course of the subsequent 100 years, over 50 mines produced 70 million ounces of gold, making the Porcupine mining camp (later known as the Timmins mining camp) Canada’s biggest gold producer.

Immediately, the town of Timmins is northern Ontario’s third largest metropolis and stays certainly one of Canada’s main facilities of mining. Once more, essentially the most well-known are the “Large Three” gold mines:

  • The Hollinger: ~20,000,000 ounces, discovery credited to prospector Benny Hollinger.
  • The Dome Mine: ~18,000,000 ounces, discovery credited to prospector Jack Wilson.
  • The McIntyre Mine: ~11,000,000 ounces, and $62 million in dividends paid to shareholders, discovery credited to prospector Alexander O. “Sandy” McIntyre.

Observe to quick time period merchants: Not one of the authentic prospectors ended up turning into rich primarily based on their gold discoveries. Hollinger offered out his share to a gaggle led by Noah and Henry Timmins; McIntyre offered his curiosity for $65,325.00, of which $60,000 was by no means collected; and Wilson was a part of the Harry Preston crew and didn’t get a monetary reward. It’s rumored that Wilson’s dealer inspired him to hit the bid when the non-public placement seed shares he acquired for his efforts turned free buying and selling.

Up to now 10 years, the junior mining market has been a canine battle to make certain, nevertheless Stares and his workforce present no signal of giving up on their desires of discovering and/or increasing a mine in Timmins and/or reactivating the previous producer, the Dona Lake Mine, in distinction to the prospectors in earlier days that stopped quick and offered out simply earlier than all their onerous work paid off. They’ve needed to elevate funds at instances of market weak point, and the share depend is greater than I usually prefer to see. That stated, Nice Bear was taken over at nearly $2 billion and not using a useful resource, and our again of the envelope calculation can conservatively get non-compliant 43-101 of 500,000 ounces between the 2 properties now, and that’s earlier than any extra drilling that I really feel is sure so as to add extra ounces over time.

The Properties: Ogden and Dona Lake

Metals Creek has two flagship properties, Ogden in Timmins and Dona Lake within the Pickle Crow District, each in Ontario. The corporate additionally has properties throughout Canada with many underneath choice agreements, wherein it holds shares and get money funds.

Ogden is within the coronary heart of the Timmins gold camp and one of many main facilities of mining in Ontario. Ogden must also see some publicity as that space has heated up with the latest consolidation of the Premier’s Hardrock Deposit in Timmins by the quickly rising Equinox Gold Corp. (EQX:TSX; EQX:NYSE.A). The Ogden property sits only a few quick miles from the “Large Three Mines” in Timmins and a brief distance from Tahoe’s (Lake Shore Gold) West Timmins Undertaking (now Pan American). Steel Creek’s drilling is within the shadow of of the top frames of those giants.

Metals Creek fashioned a 50/50 partnership with Newmont in 2008, the place Metals Creek is the operator. The property has over 8 km (~4.5 miles) of strike size alongside the Porcupine-Destor break, and 6 mineralized zones, which is the important thing conduit for gold mineralization on this gold bearing district. It has not seen any important exploration for the reason that Eighties. The property was acquired in November 2008 when Metals Creek signed an Possibility Joint Enterprise Settlement with Goldcorp, now a part of Newmont. Metals Creek has earned into its 50/50 three way partnership with Newmont.

Earlier work on the Ogden property exhibits that it hosts a historic non-compliant 43-101 of 250,000 ounces. Metals Creek did get excellent ends in 2010-2013 from drilling the Thomas Ogden Zone, however poor markets and declining gold costs put this property on maintain till 2020 when profitable funding fund Crescat Capital LLC noticed the potential of this property and put up capital with others to make sure that it could get some drilling consideration and develop into a attainable supply of ore to feed the mills within the space. Chosen outcomes from these earlier drill applications embody: 6.08 g/t Au over 21.85 meters, together with 11.76 g/t Au over 9.00 meters, 9.46 g/t Au over 18.55 meters and 6.17 g/t Au over 6.62 meters, 2732.64 g/t Au over 0.93 meters, which was part of a broader zone of mineralization of 210.19 g/t Au over 12.53 meters.

Ogden ‘Within the Shadows of Headframes’ of the Large Three

Gold in Quartz from the Hoyle Pond Mine is pictured under.


Metals Creek is utilizing a few of the identical expertise that Nice Bear Sources integrated of their exploration success.

On the Ogden Gold Undertaking, Metals Creek accomplished a spatiotemporal geochemical hydrocarbon (“SGH”) gold survey. SGH is a deep penetrating geochemistry that includes testing for particular hydrocarbons which are a consequence from the decomposition of micro organism and microbes that feed on the goal commodities, as they require inorganic parts to catalyze the reactions essential to develop hydrocarbons. These residues subsequently migrated to the floor as a flux of various courses of hydrocarbons.

Throughout Part 1 of the SGH program, Metals Creeks collected 235 samples unfold over two separate areas, focusing on the Porcupine Destor Fault stratigraphy East and West of the Thomas Ogden Gold (TOG) zone. This program was initiated to find out if SGH may very well be used as an exploration device to determine gold targets under the intensive overburden protection on the Ogden property. The survey was profitable in delineating buried gold targets over potential stratigraphy.

Part 2 continued to finish the gaps between TOG and South Zone, in addition to the western property boundary and TOG, and east of South Zone to the japanese property boundary. With better than 97% of the undertaking coated by overburden, SGH can drastically expedite the goal era course of, doubtlessly leading to substantial price financial savings when evaluating and finally delineating these potential targets. All samples have been collected on 100 meter spaced grid traces with pattern spacings of 25 meters.

With drilling on the Thomas Ogden Zone all the way down to the boundaries of typical geophysical surveys, a brand new extra high-powered system Deep Part IP survey was utilized to discover deeper. This survey will higher allow Metals Creek to focus on the down plunge extension of the Thomas Ogden Zone, in addition to additional consider extremely potential gold bearing secondary fold buildings each east and west of Thomas Ogden. With 97% of the property overburden coated, a brand new exploration survey was wanted to raised goal areas of excessive exploration potential.

Latest success in using SGH Gold survey to focus on potential areas and determine new gold anomalies, together with with Nice Bear Sources, has added this survey kind as a device to assist determine potential targets in areas which are extensively coated by overburden.

MEK carried out two phases of sampling ensuing within the identification of 5 new gold targets over potential stratigraphy. A few of the anomalies are at present part of the continuing Deep Part IP survey that can assist additional expedite the goal era course of. As well as, the corporate not too long ago accomplished six diamond drill holes utilizing a specialised oriented core logging device targeted on acquiring structural orientation information within the Thomas Ogden zones of mineralization. These holes have been logged and sampled with particular emphasis on buying core orientation information on related buildings, veins, and mineralization. Figuring out the precise orientation of those cross-cutting veins and buildings will higher allow MEK to focus on these zones of mineralization in future drilling.

Additionally on the Ogden Gold Undertaking

The corporate has additionally initiated a Deep Part IP survey to focus on the Naybob South, Thomas Ogden (TOG) and Thomas Ogden West (TOGW) Zones to assist additional outline down-plunge mineralization related to fold buildings at TOG and TOGW in addition to additional defining the plunge path of identified sulfide mineralization inside Naybob South. Each the Naybob North and Naybob South zones have been topic to differing levels of growth and manufacturing. The Naybob North was the main focus of underground growth all the way down to 411 meters, together with 11 ranges with the vast majority of manufacturing happening throughout the higher six ranges.

As well as, the corporate not too long ago accomplished six diamond drill holes utilizing a specialised oriented core logging device targeted on acquiring structural orientation information within the Ogden space mineralized zones. The holes have been logged and sampled with particular emphasis on buying core orientation information on related buildings, veins and mineralization. Assays are pending on this drilling. Drilling was paused till assay outcomes from these holes have been acquired and structural information has been interpreted. Outcomes from the SGH survey, the Deep Part IP survey in addition to core orientation information, are being mixed and compiled to generate a complete drill program focusing on the projected down-dip and on-strike tendencies.

Flagship Property #2 Dona Lake

The Dona Lake Gold Undertaking was optioned from Newmont and is within the Pickle Lake Greenstone Belt, which is host to a number of historic mines together with the Dona Lake mine, the Central Patricia mine, and the Pickle Crow mine. The undertaking was a previous producer of 250,000 ounces within the late Nineties, operated by Placer Dome. Nevertheless, the mine was shut down when gold fell from $700 to $300 (that is a half a billion {dollars} at in the present day’s costs). Till now, Dona Lake has not seen any exploration exercise since 1994. A renewed focus within the business to discover inside established mining camps has meant a better emphasis has been placed on exploring deeper, which implies considerably dearer drilling or using extra exploration instruments to assist in the goal era course of, doubtlessly leading to important price financial savings.

With gold at $1,800, it seems that MEK.V goes after the gold that was left behind within the Fundamental Zone and including addition ounces within the B zone, plus drilling deeper in each areas to doubtlessly add ounces and develop into a major deposit for a serious to develop. Dona Lake is accessible by an all-weather highway southeast from the City of Pickle Lake. The property consists of 32 patented and leased mining claims and 35 map-staked claims totaling roughly 1,063 hectares and covers the previous producing Dona Lake Mine.

The Dona Lake Mine is gold in Banded Iron Formation (BIF). It was solely mined to a depth of 450 meters, producing ~250,000 ounces at a mean grade of 8 g/t, when gold was ~$350. Most gold mineralized BIF ore our bodies run deep as is proven on Determine 2 under. This present drill program will check the Fundamental Zone, B Zone, and drill under the present mine to confirm gold extension at depth.

Dona Lake has comparable geology to Newmont’s Musselwhite Mine, which has produced better than 4 million ounces of gold. No fashionable exploration methods have been used on the property over the past 25 years. After buying the undertaking, an in depth compilation befell reworking the present maps, sections, and degree plans to a digital format enabling the corporate to generate a 3D mannequin of the outlined gold mineralization and current mine workings.

In an effort to modernize the exploration database for Dona Lake, an in depth airborne magnetometer survey was flown to assist map out any essential geological options, together with buildings and iron formations that would be the primary targets going ahead. This survey resulted within the identification of two new potential iron formation targets out the of the 4 identified gold-bearing iron formations on the property.

Latest drilling on Dona Lake by the corporate has targeted south and under the mine workings. With drilling turning into deeper and dearer, MEK launched into utilizing a geophysical survey that can have the ability to look under typical surveys. Typical surveys look all the way down to 400 meters to 500 meters, which isn’t as deep as present drilling being carried out at Dona Lake. Subsequently, a Spartan Magnetotellurics (MT) Deep Imaging Survey was carried out to focus on Dona Lake mine stratigraphy at depth under the present mine workings.

The MT survey can doubtlessly see all the way down to the 1200 meter to 1,500 meter degree. This deeper penetration than typical floor geophysical surveys highlights areas of enhanced conductivity, maps potential fold flexures, and determines the depth extent of the gold-bearing iron formations under the present drilling and mine infrastructure. It will drastically improve the goal era course of for a less expensive deep drilling program.

Upon completion of the ultimate interpretation of the survey, this information can be utilized within the goal era course of to proceed to increase the mine stratigraphy at depth and additional consider peripheral potential iron formation targets.


Metals Creek is advancing Dona Lake towards a possible reopening on exploration.


The present chart of MEK.V is difficult highs not seen in six-plus years. Whereas the chart went sideways through the previous 9 months, it nonetheless seems to be persevering with to construct a strong base, which may get away on optimistic information with the corporate’s efforts over the previous few years. About 140 million issued and excellent shares provides it a market capitalization of <~$30 million, of which 50 million shares look like carefully held by loyal shareholders that consider within the work being executed right here. This chart reminds us of of Nice Bear earlier than the transfer above 50 cents that set off one of many biggest share worth appreciations on this house within the final 10 years. The corporate’s chart seems to be finishing its first wave targets that might set in movement the following set of targets.

Abstract

The philosophy of Metals Creek’s geologists and administration is to go looking within the shadow of the top frames of previous producing mines, and that is very true with each previous producing Dona Lake and Ogden. The corporate has made a concerted effort to make the most of fashionable exploration methods at Dona Lake and Ogden to aide within the goal era course of. Each tasks previous to being acquired by Metals Creek had not seen any important exploration over the earlier 25 to 30 years. Over this time, many advances in expertise throughout the exploration business have been developed to additional discover to better depths than beforehand thought attainable.

With the worth of gold displaying indicators of renewed energy and the shares on the verge of a possible chart breakout, any extra exploration success that ends in constructing or increasing a useful resource at each properties ought to reward affected person shareholders handsomely over time.

John Newell is a former treasured steel portfolio supervisor at Fieldhouse Capital Administration. He has over 38 years of expertise within the funding business performing as an officer, director, portfolio supervisor and funding advisor with a few of the largest funding corporations in Canada together with Scotia McLeod, CIBC Wooden Gundy and Richardson Greenshields (RBC Capital Markets). Newell is a specialist in treasured steel equities and associated commodities, and follows a disciplined proprietary method incorporating fairness analysis, analytical frameworks and threat controls to judge and choose lengthy and quick shares primarily from the Canadian small and mid-cap protection. Many giant, midcap and junior treasured steel corporations use his technical charts. 

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Disclosure:
1) John Newell: I, or members of my rapid family or household and buddies, personal shares of the next corporations talked about on this article: Metals Creek Sources Corp., Equinox Gold Corp., Golden Sky Minerals Corp. and Nice Bear Sources Ltd. I personally am, or members of my rapid family or household are, paid by the next corporations talked about on this article: None. My firm at present has a monetary relationship with the next corporations talked about on this article: None. Further disclosures/disclaimer under.
2) The next corporations talked about on this article are billboard sponsors of Streetwise Reviews: None. Click on right here for essential disclosures about sponsor charges. The data offered above is for informational functions solely and isn’t a suggestion to purchase or promote any safety.
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5) Once in a while, Streetwise Reviews LLC and its administrators, officers, staff or members of their households, in addition to individuals interviewed for articles and interviews on the positioning, might have a protracted or quick place in securities talked about. Administrators, officers, staff or members of their rapid households are prohibited from making purchases and/or gross sales of these securities within the open market or in any other case from the time of the choice to publish an article till three enterprise days after the publication of the article. The foregoing prohibition doesn’t apply to articles that in substance solely restate beforehand revealed firm releases. As of the date of this text, officers and/or staff of Streetwise Reviews LLC (together with members of their family) personal securities of Metals Creek Sources Corp., Equinox Gold Corp., Golden Sky Minerals Corp. and Nice Bear Sources Ltd., corporations talked about on this article.

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