Bonterra Resources (BTR) - 3Moz Gold Resource + PEA by Year End

Bonterra Resources Inc. is a Canadian gold exploration company with a large balanced portfolio of exploration and mining assets including the Gladiator, Barry, and Moroy deposits, along with Urban-Barry Mill and multiple highly prospective exploration prospects. Bonterra is located within the Abitibi Greenstone Belt in Québec. 

We met with Pascal Hamelin, President, and CEO, Bonterra Resources. Pascal has over 3 decades of experience in mining project management, at the Sudbury and Abitibi camps. He previously served as the President and COO at Metanor Resources which was acquired by Bonterra Resources in 2018. His educational credentials include a Mining Engineering Degree from Polytechnique Montréal. He is a member of the Ordre des ingénieurs du Québec and Professional Engineers of Ontario. 

Company Overview

Bonterra Resources is a gold exploration company founded in 2007 and headquartered in Canada. The company is listed on the Toronto Stock Exchange (TSX-V: BTR) and the OTC Markets (OTCQX: BONXF). Metanor Resources Inc. and Symphony Resources Ltd. are the company's subsidiaries. 

The company is currently running drilling operations at their Gladiator, Barry, and Moroy deposits. They published a resource estimate in June 2021 indicating over 3Moz Gold supply. The company is currently carrying out a PEA (Preliminary Economic Assessment) on the 3 deposits, which is scheduled for release in Q4, 2021. 

The company also put out a 43-101 report on their 3 deposits. The PEA was assigned to SLR Consulting Ltd. shortly after the conclusion of the resource estimate. SLR's mining engineers have been employing the database and the geology model for the past 3 months and are determining the ideal mining methodology for each of the Bonterra Resources' deposits. This process also includes determining the cut-off grades for each deposit based on the mining method employed.

The mine designing process is being carried out in conjunction with the surface design that consists of a mill, and a tailings facility. Bonterra Resources is aiming for stronger margins through its assets. They estimate a 10-15 year life of mine from the 3 deposits that will feed into a central mill, enabling quick returns for investors. 

M&A Considerations

In Q4 2020, Bonterra Resources was presented with an offer with a share conversion equivalent to USD$1.60. This non-share offer had an expiry of 3 days, which led to an emergency board meeting. After a thorough assessment, the company chose not to pursue the offer in the interest of its shareholders. They also tried extending the expiry date through legal and financial advisors, however, the company was unable to reach a financial conclusion. 

Bonterra Resources currently has a standalone plan and is not actively seeking potential M&A opportunities. They are looking to advance their deposits through geology and drilling. Presently, they are advancing the engineering on the project with a strong focus on the PEA. The company will continue to drill and gain a better insight into the financial quality of the 3 deposits. 

Bonterra Resources' deposits are located close to several other gold operations, most notably Agnico Eagle, and the Windfall Lake Project. Within the 50km shared range, the companies are getting close to a 10Moz gold supply, garnering increased interest from the market. 

Advisors and Shareholder Base

RBC (Royal Bank of Canada) serves as the company's financial advisor while Osler, Hoskin & Harcourt LLP in Quebec and Vancouver are the legal advisors for Bonterra Resources. The company's shareholders include the Quebec Pension Fund - La Caisse de dépôt et placement du Québec along with Wexford Capital, VanEck, Kirkland Gold, MCap Mortgages, and Fidelity Investments. 

Wexford Capital is the largest shareholder at Bonterra Resources. They are expected to revisit their investment once the PEA results are out. Since these board members function as consultants for Wexford, they do not have access to Bonterra Resources' insider information. 

Financial Capabilities

Bonterra Resources currently has $8M in cash flow. These funds will enable the company to carry out operations until late fall. The company is looking to raise additional capital in 2021 post the PEA. This will allow them to continue drilling, advance the engineering and grow the asset to improve shareholder value. 

Over time, the company is planning an additional resource estimate followed by a drill campaign and expansion drilling. Bonterra Resources is currently working on advancing the permitting process for the expansion of their mill. 

Bulk Sampling Strategy

The Moroy, Barry, and Gladiator deposits have no past engineering work on-site. Bonterra Resources is working closely with its team of engineers to identify sectors where bulk sampling will be carried out and eventually use these samples to acquire permits from the Ministry of Environment. 

The Moroy Deposit

The Moroy deposit is the most convenient site for obtaining bulk samples through drilling and blasting. It offers a low investment for sellable ounces and the bulk samples have helped generate a positive cash flow. 

The Barry Deposit

The Barry deposit offers a cash-generating opportunity, though it requires a larger investment on the company's part. This is because development towards metallization is required. Proper drilling needs to be carried out at this 4-category resource along with an M&I (Measured and Indicated) resource to carry out bulk sampling at the zone. 

The timing of the bulk sampling will play a significant role in the overall cost. The Barry deposit has provided 600,000t material that was processed at the Bachelor Mill between 2008 and 2010 through an open-pit operation. Bonterra Resources is looking to test and bulk sample the deposit to verify the mining methods and engineering parameters obtained from the PEA.

The Gladiator Deposit

To carry out bulk sampling at the Gladiator deposit, the company will require underground exploration, the first phase of the operation. The company is currently going through the permitting process to develop a decline. Once the permit is acquired, the company will carry out a year-long drilling operation to increase the indicated category for specific areas of the deposit. 

Following this operation, the company will apply for a bulk sampling permit with the Ministry of Environment. These processes have an expected timeline of 12 months. 

To find out more, go to the Bonterra Resources Website