Margaux Resources Ltd. (MRL:TSX.V) has a new CEO, a new chief technical advisor and an ambitious strategy: to conduct the exploration necessary to expand its current 1 million ounce Inferred gold resource to prove up a multi-million ounce gold camp in northern British Columbia.
Last year the company optioned the 56,000-hectare Cassiar orogenic gold project northeast of the Golden Triangle in British Columbia and quickly released an NI-43-101-compliant 1 million ounce Inferred gold maiden resource estimate on the project's Taurus deposit, at an average grade of 1.43 grams per tonne (g/t)*. The property offers Highway 37 access, property access roads, power and water, a 30-person camp and a permitted, 270-ton-per-day gravity/flotation mill.
"It seems probable that Margaux will be significantly re-rated by the market once the upcoming drill results draw attention to its undervalued nature." - Brien Lundin, Gold Newsletter
The area also has a storied history; it is the site of the Cassiar gold rush of 1874–1895, where an estimated 100,000 ounces of placer gold were mined. Cassiar also saw production of about 350,000 ounces of hard-rock gold at an average grade of 11.9 g/t from 1979–1997. The land package was not consolidated at that time, so individual operators mined separate deposits.
"This property has a wealth of historical information; it actually was operated at different times by different miners. So, it was a patchwork of information and drilling. We were able to publish a 43-101 resource just using that information," CEO Marco Roque told Streetwise Reports. Roque, who took the helm of Margaux on July 1, is a co-founder of both Reyna Silver and Arabian Shield Resources.
Noted geologist Doug Kirwin, who was executive VP for Ivanhoe Mines for 17 years and was part of the team that discovered the giant Hugo Dummet deposit at Oyu Tolgoi in Mongolia, has signed on as chief technical advisor.
"Doug Kirwin assessed the Cassiar property and came to the conclusion that in addition to the 1 million ounce Inferred gold resource we announced, there is significant exploration potential in this property, and potential for a multi-million ounce gold camp here. He sees parallels with Osisko Gold Royalties' Barkerville Mine, as well as with the Fosterville Mine in Victoria, Australia. They are both orogenic gold deposits," Roque explained.
"We pivoted from a strategy to get the asset to production quickly, to one where we believe we would get a lot larger return on the invested capital if we explore the property to prove the potential of a 3 to 5 million ounce deposit," Roque said.
To that end, Margaux recently began a 5,000-meter drill program, as well as geological mapping and sampling.
Taurus Drill Program
"The current drill campaign is very much focused around the lower-grade, bulk-tonnage Taurus deposit that sits in the northern part of the property. We are doing infill, expansion and exploration drilling," Roque said. "Some of the drilling will be high-quality infill, to fill gaps in our model, some are extension holes to test the limits of the deposits, and others are expansion holes. The expansion holes won't be farther than 500 meters from the existing resource."
Drill results from Taurus are expected to begin to be released within weeks.
While Taurus is a lower-grade, bulk-tonnage deposit, the Table Mountain deposit to the south offers higher-grade potential.
"The Cassiar Gold property has a 15 kilometer gold trend, from Taurus in the north to multiple high-grade veins at Table Mountain in the south," Roque said. "We plan to focus exploration on Table Mountain next year. A historical inferred resource estimate, from 2010, shows 56,000 ounces of gold at 24 g/t**, so this is the type of grade that we are hoping to find next year."
Historical underground mining at Table Mountain from seven high-grade veins netted 315,000 ounces of gold; two of the veins had average gold grades of 20.55 g/t and 17.12 g/t. The 270 tonne-per-day mill on site is permitted.
Industry observer Brien Lundin, writing in Gold Newsletter on August 27, points to Margaux's leadership. "The management team is packed with talent, including Chief Technical Advisor Doug Kirwin, who led the Ivanhoe Mines team that made the super-giant Hugo Dommet discovery at the Oyu Tolgoi project in Mongolia. Other key players include Director Stephen Letwin (past President and CEO of IAMGOLD) and CEO and Director Marco Roque, who has extensive capital markets expertise."
On August 20, Lundin wrote, "Margaux already boasts about a million ounces of inferred, likely-open-pittable gold resource at a very nice grade of 1.43 g/t gold, with the very real potential to expand that resource considerably…With a market cap of under C$22 million and a drill program underway, it seems probable that Margaux will be significantly re-rated by the market once the upcoming drill results draw attention to its undervalued nature."
Margaux has around 198 million shares outstanding, with insiders and advisors owning 42.1% and institutions holding 11.4%. Institutions include BIA Master Gold Fund, Gold Mountains Asset Management, Bowfort Capital and the Commodity Discovery Fund.
Margaux acquired Cassiar in an all-share deal with Wildsky Resources, for 58.2 million common shares at a deemed price of $0.08 each, and plans to complete 100% ownership of the acquisition in September with the issuance of the final 23 million shares.
*Zelligan, S., 2019. National Instrument 43-101 Technical Report on the Cassiar Gold Property (Amended). November 12, 2019. Report filed on Sedar.
**Pearson, C. and F.J. Bakker, 2010. Technical Report on the Table Mountain Property, Liard Mining District, British Columbia, for Hawthorne Gold Corp., May 18, 2010. Report filed on Sedar.[NLINSERT]
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