In last week's episode I was optimistic that forest access bans would be lifted for Quebec's James Bay region but the western half remained closed as did key transportation corridors such as the Trans Taiga Road. Projects such as PMET's Corvette and Brunswick's Mirage are outside the closed area, but getting boots onto the ground is a problem because helicopters are still under requisition to support the firefighters. CEO Marie-Josie Girard of Dios Exploration Inc tells me that while the East Clarkie and Nemiscau North projects are outside the access ban, they need helicopters because their second order sleuthing has developed precise targets. She has the contractor scheduled to start in mid August and believes there is plenty of time to make or break all the targets they have developed. I'm not sure they will be in a position to drill this fall but if they find any decent sized LCT-type pegmatites they could be drilling in Q1 of 2024.
Most of the projects of Brunswick Exploration Inc in the James Bay region are in closed areas, but the one that matters most, Mirage, is open. However, it is located 300 km from Nemiscau as the crow flies and the Trans Taiga remains closed. Mirage is only 100 km north of the Renard diamond mine so perhaps Brunswick can stage out of Renard to track down the bedrock source of its 1,700 m by 200 m spodumene bearing boulder field.
In the case of the Cheechoo project Sirios Resources Inc managed to extract its planned bulk sample for metallurgical testing, but the crew spent only 3 hours investigating the area up-ice from the gold deposit where a spodumene boulder was found when it was told to quit because of the fire bans. Sirios is stuck in a holding pattern with a persistent seller at $0.055 while it negotiates with Fury Gold Mines Ltd to acquire its 50.022% stake in the Eleonore South JV in which Newmont owns 49.978%. The problem with this situation is that Newmont has a right of first refusal if Fury and Sirios reach a deal. Most likely Fury will want a combination of cash and stock because the stock would allow Fury to participate in any upside once Sirios consolidates the entire area 100%. The most recent resource estimate gives Cheechoo 67.4 million tonnes indicated and inferred at 0.87 g/t gold (1.9 million ounces), but this estimate understates the reality because the pit shell can only be extended to the property line. This reduced intrusion related gold system has a potential resource in the 4-5 million ounce range, with at least 75% on the 100% owned Cheechoo property. With the whole being worth more than the sum of the parts, Fury would like stock, but if Newmont exercises its right of first refusal it would only pay the deemed cash value, denying Fury any future upside. Once Sirios owns 50.022% it would become operator, and it would make sense to approach Newmont with a deal to acquire its 49.978% stake, possibly for stock that takes its 12% Sirios equity stake up to 19.9%. As owner of the Eleonore underground mine it is the natural future purchaser of Cheechoo, assuming it does not sell Eleonore to a smaller producer.
There is also the bizarre potential that the northern half of the Cheechoo property which straddles the contact between the Opinaca and La Grande geological subprovinces hosts a decent sized pegmatite grading 1% Li2O or better which at $10/lb lb lithium carbonate would have a rock value of $545/tonne, equivalent to 8-9 g/t gold. In contrast the Cheechoo deposit has a rock value of only $55/tonne. The Eleonore South JV covers different geology and would not have LCT-type pegmatite potential. Sirios could split the pegmatite potential ground into a separate property and sell the consolidated Cheechoo gold project to Newmont.
Sirios did put out an update in early July about the Maskwa property which has been repurposed as a lithium play. Back in 2016 Sirios formed a 50:50 JV with Sphinx Resources called the Cheechoo-Eleonore Trend which was a conceptual play. They conducted till sampling which did not deliver much joy and in 2018 Sirios sold its 50% stake to Quebec Precious Metals Corp, a company related to Sphinx by way of Normand Champigny. Dominique Doucet revisited the area in 2020 with the idea that they should have been looking at the subprovince contact for intrusion related gold systems, which in this area was perpendicular to the Cheechoo-Eleonore "trend". Sirios conducted a till survey in 2020 seeking gold and tungsten grains whose 3 lines did yield gold and tungsten grains at the down ice limit of the property. Although the property does have anomalous lithium lake bottom sediment values these do not mean much because Maskwa was covered by the Tyrell Sea during a prior round of global warming. But tantalum is a heavy element (density 16.4 compared to 0.53 for lithium) it would have been recovered during heavy mineral screening (gold is 19.3). So they went back to samples and counted the tantalum grains which are anomalous. The only problem I have with the results is that all 3 lines perpendicular to the ice direction have similar elevated values, so no obvious vectoring. The source could be to the northeast on somebody else's property, or there could be several pegmatites near the subprovince contact. Maskwa is well inside the part of James Bay still closed to access, but for now Sirios is focused on trying to acquire the Newmont/Fury property next door to Cheechoo.
As an aside, I asked Dominque if Sirios still had the till sampling data from the 2000s when Sirios and Dios co-funded a regional survey with the gold targets going to Sirios and the diamond targets to Dios. That led to the Pontax lithium discovery now owned by Cygnus and Stria. He did, but only in paper form. The Cheechoo property offers first order pegmatite discovery potential because nobody ever looked hard at the lithium potential. Dios, in contrast has digitized its copy of the till survey data set and scrutinized it for clues to less obvious pegmatites, what I call second order exploration. Sirios would have have to walk the entire Maskwa and Cheechoo properties to find outcropping first order pegmatites. In contrast Dios has used multiple data sets including satellite imagery to pinpoint likely pegmatite locations. So even with a late boots on the ground start in August Dios could leapfrog other juniors who need to look at everything in order to find anything. |
