By The Gold Report

Source: James Kwantes for Streetwise Reports   07/08/2019

The goal of the till geochemical survey is to identify high-grade drill targets in new areas, as well as increasing grade and tonnage at existing deposits, Resources Opportunities editor James Kwantes writes.

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.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

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.

Streetwise Disclosure:
1) James Kwantes’ disclosures are listed above.
2) The following companies mentioned are billboard sponsors of Streetwise Reports: Great Bear Resources. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Newmont Goldcorp and Coeur Mining, companies mentioned in this article.

Resource Opportunities Disclaimer: Readers are advised that this article is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. The information is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data.

Photo provided by the author.

( Companies Mentioned: GIS:TSX.V; GGISF:OTC,
GBR:TSX.V; GTBDF:OTC,
)