Cartier Resources (ECR) - New Resource Re-Rate Imminent from 4 Bagger

Cartier Resources is an exploration company focused on discovery in the prolific Abitibi Gold Belt in Quebec. The Company operates a process which aims to develop and maintain a balanced portfolio of mining projects ranging from exploration to resource definition, development, and production. 

We caught up with Philippe Cloutier, President & CEO of Cartier Resources to discuss their progress since we last spoke to them in August and about the plans for Cartier Resources in 2021.

Company Overview 

Cartier Resources is a Canadian-based exploration company focused on Gold in the Abitibi Greenstone Belt, the Quebec portion. Their business model was to pick up Gold deposits in the last bear market at CAD$1/oz. When the market picked up a few years ago, Agnico Eagle took a 19.9% stake in Cartier Resources and since then, other senior investment institutional funds have taken a sizable position which has allowed them to advance their deposits. They are about to finalise the price of their Chimo mine project and are initiating drilling on their second deposit, the Benoist Gold deposit that is in the heart of the northern part of the Windfall Gold Belt.

Cartier has completed the 3rd phase of diamond drilling at the Chimo project and delivered a 2nd Resource Estimate. They have launched the process to initiate and deliver a 3rd Resource Estimate. They are looking at delivering anywhere between 1.7Moz - 2Moz of Gold in this next resource estimate. That will dovetail into a PEA and determine the value of the project. While they're doing that, they're drilling on Benoist.

Chimo was a former-producing asset and they’ve completed 60,000m+ of drilling and are now moving it to the next stage with the resource consultants and engineers. As a past-producing Gold mine, there is great value in the historical, geological, metallurgical, and mining infrastructure heritage of the project. 

Cartier had a good year in 2020, with low points in the share price at CAD$0.08 in March and April but now up to around CAD$0.34 today. A 4x return. Chimo can be bulk-mined underground, low-grade, high-tonnage but it could also be cherry-picked, more selective mining. There is a lot of value in determining the exact techniques and the share price will be re-rated once the value of Chimo is finalised. The market values Cartier at CAD$70M which Cloutier suggests would be split at about 70-80% on Chimo, and then rest on the blue sky of Benoist, Wilson, and Fenton deposits.

Business Model: The Next Steps Going Forward

Cartier plans to follow a similar path at Benoist to the Chimo project. They will stick to known mineralisation and drill at depth and along strike. Benoist is a wide, high-volume, mineralised system that can be traced down to at least 1km. They started with the historical work, and then added their work to it. The Benoist deposit had a historical estimate from 1993 of about 500,000t of 5.5g/t or just about 90,000oz of Gold. In the latest resource estimate published in December of this year, there is 220,000oz of Gold, 500,000oz of Silver, and 7.7Mlbs of Copper. 

The programme is a 3-part programme. 1. They'll be drilling the depth extension of the deposit, like they did at Chimo, and will be drilling down to 1,300m-1,400m vertical as they already know that it extends down to 800m. 2. They are also planning to drill 5 anomalies that are proximal to the deposit, that are geophysical signature copycats, geophysical signatures of the Benoist deposit, 3 of which are within the direct, lateral extension of the deposit. 3. The third component of the programme will be drilling the crown pillar of the current deposit in the first 100m, and doing some geotechnical work which could potentially add up to 100,000oz of Gold. They will also be carrying out metallurgical work to confirm the ounces which will be added to the ultimate Resource Estimate. 

Those 3 components will total 50 diamond drill holes, 25,000m, and finish by mid-October to early November 2021. It's a sizable programme and there will be a lot of news flow coming from the drill bit on Benoist. 

Cartier raised CAD$9.3M in September and once the drilling programme is completed on Benoist and the resource estimate and the PEA on Chimo has finished, they anticipate still having CAD$4.5M in the bank.

End Goal for Chimo: Potential Partners & PEA

Cartier does not plan to bring in any partners for the Chimo project because it's a past-producer but wouldn’t rule it out on a new project like Benoist. The PEA for Chimo is the end goal for Cartier, after which the Chimo project will be for sale. 

By the end of 2021, Cartier aims to have a new resource estimate for Benoist which will be pivotal in deciding whether to move the project forward to the next stage. Benoist is more remote than Chimo and so requires more ounces to make it worthwhile. Chimo has the benefit of having already been a mine and is likely to be a mine again. 

Benoist Deliverables Timeline & Result Estimates

Benoist has got the characteristics that Cartier is looking for which are systems that can produce large volumes of rock that are mineralised at relatively constant grades and that can generate ounces.  

Cartier needs to see at least 50% success hitting the zones at Benoist to make it a viable project. If there is less than 50% success, it would go from being a deposit type project to a full-fledged grassroots exploration programme. Fortunately, the Benoist mineralisation is extremely visual, a sulphite stringer system with highly chloridic salvage and wall rock. So there is the benefit of doing real-time decision-making onsite during drilling.  And if Benoist is not delivering, Cartier has other projects that they can direct that money to instead.

The Telecom Tower setup at the Benoist project campsite.

Plans for Fenton & Wilson in 2021

Fenton is a joint venture between Cartier and SOQUEM, which is a government-owned exploration company and there is now an opportunity for Cartier to take back the other 50% of the Fenton deposit which will now be their priority. Fenton is next in line and after that comes Wilson in 2021. Cartier is a company that likes to aim for one project at a time and then move on to the next one rather than trying to move forwards with too many projects at once. 

Importance of Relationships: Agreement with The Cree First Nation of Waswanipi

Cartier has recently signed a mineral exploration agreement with the Cree First Nation of Waswanipi. There are 9 Cree First Nations in Northern Quebec and Waswanipi is the southernmost one, which is the Cree first nation where the Windfall project is in Benoist. As a group, they're extremely proactive and very business-oriented. The drilling company they are using now has a joint venture with the Waswanipi First Nation and actually trains diamond drillers. It's a very small community but it is a very modern and proactive community involved in training their people for the mining and forestry industry, and various other services.

It's fundamental for mining companies like Cartier to work with First Nation groups. If their  project makes it to a mine, one of the key components of operating that mine is human resources. One of the highest costs of an operation is fly in, fly out so if there are local communities, not only the First Nations but also the very small towns established there, then there are human resources in place. Companies are involved in training these local people to service future mines and/or forestry installations. Also,they're there in the territory and they want to co-manage the natural resources where they live. 

In Quebec, the Crees signed a landmark agreement in the 1970s for the Hydroelectric Dam Development. That was the foundation for them to start to develop businesses of their own and to participate in the development of natural resources. So there are legal precedents and business precedents for the harmonious development of mine development or exploration work. Some people see this as an obstacle when it's in other jurisdictions where there are conflicts, but in this case, there's no conflict. It's just setting in motion a process where everybody's part of developing it to fruition. It's fundamental to the future business of the area. If a junior exploration company has developed good relationships with the local communities or first nations and the environmental department of the ministries, it ultimately adds value to the deposit.

It was good to catch up with Cartier Resources and to recognise the progress that they’ve made during 2020 on their core asset. We look forward to the drilling results and the new resource coming out during the early part of 2021, which should see the company re-rate. It is important to note that once the PEA is complete, Cartier Resources would look for a partner or a sale to develop the Chimo project through economic studies and into production, as this is not their specialty. The same model will be followed for their conveyor belt of other projects too. They know what they are good at and where they want to monetise their efforts. So must investors. 

To find out more, go to the Cartier Resources Website.