Cartier Resources - Meticulous Abitibi Gold Explorer Nears PEA

Cartier Resources is a TSX-v-listed gold exploration company situated in the renowned Abitibi Gold Belt. Since we last spoke to Cloutier around a month ago, the share price has doubled. Capital is predominantly being absorbed by gold producers, with some now trickling down to the gold explorers, but the explorers need to be doing the right things in the first place in order to attract interest from the market.

The company’s flagship Chimo Gold Mine is being developed, and Cartier Resources has raised $9.3M of flowthrough capital since we last spoke, and now has around $14M in the treasury to put into the ground and create catalyst moments. The market cap is now around $65M, and Cloutier is pleased to see Cartier Resources finally being valued close to what he thinks it deserves.

Interview with Philippe Cloutier, President & CEO of Cartier Resources (TSX-V: ECR)

What we discuss and when:

2:02 – Quick Update

4:12 – Company Overview

5:34 – Promises in May: Company Processes and End Goal

14:07 – Chimo Mine: Average Grade too Average?

19:52 – Ore Sorter: Costs & Processes

21:09 – PEA Timings and Clues to Economics

21:51 – Comparable Peers: Who is Cartier Resources Like?

23:01 – Benoist: Plans and Goals

25:33 – Exciting the Market: Why Not Raise More Money?

30:43 – End Goal and Business Model

35:01 – Impact of COVID-19

Philippe Cloutier starts off by saying that Cartier have had to go through a corporate development process in that during the last few years they have been focused on developing the Chimo mine project but the corporation is not just Chimo, It has three other projects too. Cartier has had to engineer its corporate development around continuing and completing the work on Chimo whilst concentrating on emerging dynamic exploration program on Benoist and Fenton too.

Location of the Cartier project sites - Cartier Resources September 2020 Corporate Presentation

‘Gold-centric’

Cloutier states that Cartier Resources is ‘Gold-centric’ and got listed in 2007. He says that by 2012 the corporate strategy was to focus on projects where Gold endowment had been demonstrated and had Gold deposits. Between 2012 and 2015, they picked up four Gold deposits, one of which was a past-producing mine.

The Chimo Mine - Cartier Resources September 2020 Corporate Presentation

Chimo

In the last few years, most of Cartiers’ exploration work, almost 60,000m of diamond drilling, has taken place within 500m of the Chimo mine historical shaft. Cartier have delivered two resource estimates and are working on a third. Cloutier believes that it is high time that Cartier migrate towards developing or unlocking the value of their three other deposits: Benoist, Wilson and Fenton.

Cloutier tells us that Chimo is now clearly moving towards the end zone and now the game is essentially in the hands of the resource estimate consultants and the engineers to deliver the final value of Chimo. All this will be supervised by Cartier and they are needing additional funds to be able to go on to their other exploration sites at Benoist, Wilson and Fenton where a similar dynamic approach will be taken to the Chimo project as so much has been learnt. Cartier have decided that they have done enough work on the Chimo site and that the time has come to move forward on the other projects.

Cadillac Fault Extension & The Windfall Belt

Cartier focuses their exploration on discoveries that have already been made but were discovered at a time where drilling was limited to the first few hundred metres. Cartier are then able to drill at depth and to continue to explore the sites. The first asset which Cartier focused their attention on was the Cadillac Fault Extension which Cloutier says has been very productive and prospective and that now they are going to focus their exploration attention on an emerging mining district, The Windfall Belt.

Cloutier stated that Chimo, much like any other project in the Abitibi, has its sweet headline pockets within the mineralisation panels and that Cartier have tended to focus on the number of ounces or the volumes that generate ounces rather than the teaser headlines. Their focus on Chimo was making sure that the mineralisation that was outlined was amenable to mining with modern techniques.

Technical discoveries at Chimo

Cloutier tells us that they have made technical discoveries in the last six months and found some technical advantages of the Chimo mineralisation infrastructure. They have found that, at Chimo, ore sorting works. They know that if you take the mineralisation and you put it through an optical or an electromagnetic sorter, it can sort, the material can be recognised and separated into ore and waste. It either does already, or it doesn’t. If it doesn’t, that’s it, you don’t investigate that path anymore. In the Chimo case, it does.

Chimo is also very proximal to the to the Val d’Or mining camp. They have the advantage of having six different mills locally which provide different options for the mine. Cloutier stated that the cost of the engineering is fairly low but that the essential point is the trade-off; are you better sorting this thing and high grading your ore, lowering the trucking cost, sending it to more potential mill sites, or are you going to just throughput as much tonnage as you can at the lowest grade possible, just send it to a local mill and let them sort it out?

Location of the Benoist mine - Cartier Resources September 2020 Corporate Presentation

Benoist

Cloutier tells us that back in 2016, when Agnico Eagle invested USD$4.5M for a USD$19.9M stake, that USD$4.5M was to drill Wilson, Fenton, Benoist and Chimo but that they didn’t get around to drilling Benoist, so they already have a drill program mapped out for Benoist. However, considering what they discovered that Chimo, the program at Benoist has now developed into a three-component program, and will be drilling the natural depth extension of the Benoist deposit as known today. They will be drilling the deep-seated ore vision anomalies that are distributed in and around of the Benoist deposit and drilling the deposit itself. All three parts of the program are directed, or their objective is to rapidly vault Benoist into the limelight and properly evaluate.

Benoist, Fenton and Wilson

In Cloutier’s opinion, the market has only recently started to recognise some value at Chimo, but zero value at Benoist, Fenton and Wilson, because these are all historical resources. What they aim to do is to take the historical resource estimates on these projects and flesh them out. Then they will look at the program; the program is built to develop rapidly, expand the number. At Benoist, for example, there are, Cloutier thinks, 500,000t, historical resource assessment mine, not 43-101 on 500,000t at 5g/t Gold, 12g/t Silver and 0.3g/t Copper.

He calculates that if you take 500,000t @ 5g/t, that’s about 90,000oz in the first 100m or 200m, but they’ve drilled down, in 2014, to 750m and know the systems there. They have to design a drill program that will clearly show the market the value that they are building at Benoist, and have it understand the value of Benoist and also at Fenton. And then ultimately, at Wilson.

Right now, Cartier are getting zero value for the 3 other deposits, and also only getting partial value from Chimo. The challenge is not a technical one, it’s raising awareness of what they are doing and have the market recognise their value.

Exciting the Market: Why Not Raise More Money?

Cloutier pointed out that there is a world between investing funds properly and just blowing it out and spending it and that USD$9M is on the high side of what they can appropriately manage and deliver in the Cartier fashion. He said that that amount basically reflects the backend interests that they can generate. Cloutier explains that the USD$9.3M that was mentioned is flowed through and this is a promise to the market that this money will be invested in exploration. He says that the retail investment community want to be hearing that they are going to get USD$9.3M worth of diamond drilling, because Cartier doesn’t fly airborne surveys or do grab sample trench programs and things like that.

The majority, if not, all of this money will go directly to diamond drilling, some reserved for engineering and 43-101 resource estimate work and Cloutier declares that this will be a very, very dynamic year for Cartier in terms of news flow, in terms of deliverables.

Cartier are looking at USD$500,000 to USD$700,000 to complete the work on Chimo and have the market fully appreciate in terms of resource estimates and preliminary economic assessment of the project and the value of Chimo. And Cloutier speculates that from that point on, it’s a different ball game; the market comes into play, the corporates come into play and even at the board level, they have to make a decision of how they’re going to capture that value and monetize it for their shareholders.

Cloutier confirms that what remains to be done on Chimo is simply bringing to the market an evaluation picture of Chimo and from that point on, Cartier have got two elements: a defence mechanism if there’s an opportunistic bid or a delinquent bid on Cartier or Chimo. And then they have the blueprints to build it they must make that sort of decision.

Cloutier ends by saying that things are going well for Cartier and that COVID hasn’t made too much impact on moving things forward as people tended to stay at work instead of going on vacation and travelling abroad. Cartier hope that a second wave of COVID will not cause too much trouble and that they have taken the necessary steps to manage it accordingly.