Bonterra Resources - Exploring a Past Producing Gold District in Quebec

• Bonterra Resources is a junior gold exploration company located in northern Quebec with over 3 million ounces of gold resources in two main deposits, Barry and Gladiator.
• They have strategic infrastructure, including an 800-ton-per-day mill, tailings management area, and mining claims.
• Despite a challenging market environment, they are raising CAD$3-5 million Canadian dollars through a financing round announced recently, with shares priced at $0.17 per unit and half-warrants at $0.24.
• They aim to use this capital for exploration, focusing on deep drilling to expand their current deposits and potentially discover new zones.
• Bonterra Resources is also open to strategic alternatives like partnerships or joint ventures to unlock the value of their assets and explore the potential to increase their gold resources from 3 million to 6 million ounces or more in the Urban Barry camp.

About Bonterra Resources

Bonterra Resources is a junior gold exploration company focused on the Urban-Barry gold camp in Quebec, Canada. The Urban-Barry camp is located about 170 km northeast of Val-d'Or and has historically produced over 3 million ounces of gold. Bonterra controls one of the largest land packages in the camp, giving it access to major infrastructure like a 800 tonne per day mill and tailings facility.

Interview with President & CEO, Marc-André Pelletier

New Leadership Guiding Revitalization Efforts

In 2022, Bonterra brought on a new President, CEO and Director - Marc-André Pelletier. Pelletier is a mining engineer with over 25 years of hands-on experience at open pit gold projects across Canada. His background gives him valuable insight into revitalizing Bonterra's assets in the Urban-Barry camp.

When Pelletier joined Bonterra, the company was pursuing plans to restart gold production at its Barry project. However, after a preliminary economic assessment and pre-feasibility study, Bonterra determined operating costs were too high in the region to justify restarting the Barry pit. Pelletier decided to pause plans for production and focus on generating cash flow from residual gold recovery at the mill while ramping up exploration efforts.

Near-term Cash Flow from Mill Cleanup

One of Pelletier's early initiatives was completing a mill cleanup to recover residual gold from accumulated dust and materials. In Q3 2023, Bonterra recovered 630 ounces of gold from this cleanup effort, generating around CAD$1.6 million in revenue.

Additional mill cleanup phases are underway, with potential to recover another 1,500 ounces of gold worth over CAD$3 million. This near-term cash flow has strengthened Bonterra's balance sheet during a volatile market environment.

Robust Exploration Program Underway

With improved financial flexibility, Bonterra has designed an aggressive 13,000 metre drill program for the rest of 2023 focused on resource expansion and new discovery targets.

The first priority is testing for depth extensions of its two main deposits - Gladiator and Barry. Gladiator currently extends to 650 metres depth but geologic modeling suggests mineralization continues further down plunge. Bonterra will test Gladiator at 850-900 metres depth to demonstrate the scale of the system.

At Barry, wide-spaced drilling shows the deposit extends at least 500 metres below the former open pit mine. New drilling will infill this area to upgrade resources from inferred to indicated category.

Beyond resource extensions, Bonterra has several regional exploration targets based on past high-grade hits and geophysical anomalies. The Titan target, located 1 km east of Gladiator, returned compelling past drill results that warrant follow up testing.

Strategic Partnerships Could Unlock Additional Value

To supplement its exploration efforts, Bonterra has been evaluating strategic partnerships and investment opportunities. Joint ventures with major miners active in the region could expand and de-risk Bonterra's portfolio. For example, Osisko Mining's JV with Gold Fields on the Windfall Gold Project.

Partnerships could also provide capital to expand drilling and advance projects much quicker. Bonterra's large land package and prospectivity leaves substantial room to grow resources beyond the current 3 million ounces. Attracting a partner that shares this vision could accelerate efforts to establish a 5-10 million ounce resource base across the district.

Attractive Valuation Relative to Peers

Despite its historic production, large resource base and exploration upside, Bonterra trades at a significant discount to peers. With nearly 3 million ounces of gold resources, Bonterra has an enterprise value per ounce of only around US$25. By comparison, many junior explorers trade at $50-100+ per ounce.

This disconnect highlights the market's general skepticism of microcap, early-stage explorers during a volatile market environment. However, successful drill results from Bonterra's fully funded exploration program offer a clear path to re-rating.

With gold prices stabilizing above US$1,900/oz, any new discovery success or resource growth could quickly translate into substantial value creation. The current valuation assigns little credit for Bonterra's extensive infrastructure, including an operational mill that gives it a clear path to restart production down the road.

Conclusion

Bonterra Resources presents a compelling investment case at current levels for investors comfortable with the elevated risks of junior mining stocks. The company has an experienced leadership team, near-term cash flow potential, a fully funded drill program and huge exploration upside in an established gold district.

At just US$25/oz of resources, Bonterra is trading at a fraction of comparable peers. The stock appears pricing in considerable downside risk while giving little weight to the significant upside potential. Positive drill results over the coming 6-12 months could catalyze a sharp re-rating as the market gains confidence in Bonterra's assets and growth trajectory.

Patient, long-term oriented investors could be rewarded with appreciation of 2-3x or greater if Bonterra executes on its exploration strategy and realizes any of its substantial resource expansion potential in the year ahead.