Tombill Mines (TBLL) - Equinox Gold Gathering on the Boarder
Tombill Mines owns various royalty-free mineral exploration and past-producing gold properties in the Geraldton and Beardmore Camp in Ontario. The company's business is mineral exploration, primarily in gold. The Tombill Main Group claims were originally staked in the first Geraldton Gold Rush in the 1930s.
Matt Gordon caught up with Adam Horne, CEO, and Chairman, Tombill Mines. Adam is a Managing Partner at Caledon Partners, a London-based hedge fund. He previously ran the European Media Investment Banking Group at Credit Suisse, First Boston in London. He also worked with Morgan Stanley in New York.
Tombill Mines is a gold exploration company listed on the Toronto Stock Exchange (TSX-V: TBLL), and the OTC markets (OTCQB: TBLLF). The company was founded in 1935 and is headquartered in Vancouver, Canada. The company's flagship project, the Tombill Main Group, is located in the world-class Geraldton mining district. This contiguous and along-strike hard rock deposit features 11.5Moz gold.
Tombill Mines is based in Geraldton, Ontario, located 250km from Thunder Bay, down the trans-Canada highway. This property is surrounded by Equinox Gold's hard rock project. Equinox's project features a 5.5Moz proven and probable resource in addition to a 6.5Moz underground resource that is present along the shared border with Tombill Mines. A resource of 2.1Moz was mined at this site between the 1930s and 1970s. The company is looking to continue the exploration on the property that was initiated in January 2021, demonstrating equivalent lithologies.
Tombill Mines is focusing on the F-zone along the plunge line from Equinox's hard rock deposit. The current exploration has led the company to achieve a significant strike length on its property.
The company is also carrying out exploration on the northeast part of the deposit, specifically the surface surrounding Talmora, a past-producing mine. The company anticipates that this area features additional near-surface type mineralization, pending confirmation in the coming weeks. It continues to diversify the exploration program past the plunge line from Equinox.
Tombill Mines raised $6.5M in December 2020 and an additional $2M in March, bringing its overall cash flow to $8.5M. A major portion of this equity has been utilized towards drilling operations. The company has continued its program along the F-zone strike length and has demonstrated grades similar to Equinox.
The company is looking to raise additional capital from the market to continue its drilling operations. It is looking to duplicate the progress achieved in the past drilling program. The company has managed to drill 20% of the F-zone and is looking to diversify the gold deposits through additional exploration.
The company has also allocated capital resources for surface drilling around the Talmora mine. It is currently awaiting the assay results and plans to prove strike at a grade similar to the neighboring Equinox's operations. The company is actively seeking an open-pit opportunity.
Tombill Mines was able to reach mineralization similar to Equinox that continues along with a 12% plunge at a depth of 1,000m. The drilling operation was faced with complications at depth due to the presence of underground fractures and a water cavity.
The company is looking to diversify its offerings through 2 asset streams, the F-zone and the past-producing Talmora mine. This provides optionality to the company along with making it a stronger prospect for a potential acquisition.
To achieve a better economy of scale, Tombill mine is focused on increasing the mineralization volume across its assets. The company is awaiting assay results for deeper mineralization and near-surface drilling present 300m-400m from the hole. The testing is being carried out by Actlabs that is located 1 mile from the deposit. The company is facing delays as the lab is also processing samples from various mid-size and major mining companies from other parts of Canada.
Tombill Mines sold bits of land to Equinox in order for the latter to construct a mill. Equinox is planning to announce the commencement of its construction phase. This will entail spending $1.3Bn to develop a mill and tailing pond on-site over a period of 1.5-2 years. Following this, Equinox's mine would officially begin operations.
Past announcements and discoveries from Equinox have positively impacted Tombill Mines' share price. This was evident in December 2020 when Equinox and Orion brought Centerra and Premier Gold from the company.
The Gold Market
Gold pricing has seen a dramatic drop in recent months, Tombill Mines looks at the price change as static in nature. It anticipates that the pricing has come down due to investors reallocating capital towards the US dollar. This has had a significant impact on both large and junior gold companies.
Tombill Mines is expected to announce the assay results in the coming weeks. The company is working on capital allocation and budgets across the 2 deposits as it continues to carry out drilling operations along the strike length and on the surface.
Over the course of the next few months, the company will demonstrate its resource based on the results of the F-zone and the strike length, expecting to achieve similar results to its neighbors.