Orford Mining (ORM) - Nickel JV with $Bn Partner + Drilling for Gold

Matthew Gordon recently spoke with David Christie, CEO of Orford Mining, a company focused on nickel and gold projects in Quebec, Canada. Christie spoke about 2022 being a big year for Orford, with $9 M to be spent for three drilling programs at several large tracts in Quebec.

Company Overview

Orford Mining is a gold and nickel explorer active on several large and highly prospective areas in Quebec. The company’s three main projects are:

1. Qiqavik, a gold exploration project, covering an area of 39,063 ha in northern Quebec,

2. Joutel Properties, prospective for gold and located within a 50-sq. km. tract in the Abitibi Province, and

3.  West Ragland, an advanced-stage Ni-Cu-PGE (platinum group elements) exploration project, encompassing an area of 70,700 ha in the Cape Smith Belt, Nunavik, Quebec. 

Meet the CEO

Christie has experience as a geologist and an analyst. He spent many years as a field geologist, an exploration geologist, and a mine geologist. After that, he was an equity analyst with some of the big banks in Canada for thirteen years. Subsequently, he managed money with the Dundee group. 

It was when he was at Dundee that Orford got started. Dundee had invested in a small private company called True North Nickel, which was looking for nickel in the northern part of Quebec. True North Nickel ended up making a high-grade gold discovery there. In 2017, True North was spun out as the publicly traded Orford Mining. 

Christie was also the CEO of another company, Eagle Hill. That company is the foundation of what is today's Osisko Mining. 

Working with Christie at Orford are Michelle Sciortino, VP of Exploration, and Alger St-Jean, Chief Geoscientist.

West Ragland Nickel Project 

West Ragland is located in the west-central portion of the Precambrian Cape Smith Belt, part of the Circum-Superior magmatic event that rims the Archean Superior Craton. At West Raglan, nickel, copper, cobalt, and PGE sulphide mineralization is hosted in the ultramafic units of the Lac Esker Suite, which comprise a series of sub-volcanic ultramafic intrusions. Exploration work to date at West Raglan has identified outcropping mineralization over more than 35 km of strike length with very limited testing at many zones. 

On January 19, 2021, Orford Mining announced it had reached a definitive agreement with Wyloo Metals Pty. Ltd. for a $25.0 M earn-in and joint venture over the West Raglan property. The negotiated terms allow Wyloo Metals to earn up to 80 percent of the project for total expenditures of $25.0 M over 7 years. In addition, in order to get to 80 percent, Wyloo has to complete a Feasibility Study. Orford is carried through to the end of the Feasibility Study. Wyloo will then have to make a cash payment to Orford and at that point in time a JV is formed and Orford will contribute 20 percent. 

Nickel was going for $4.50 to $5 per pound in 2020, making it difficult to raise money then, which is why Orford became interested in developing a farm-in at West Ragland. The company also wanted to share the risk on the project given its remote northern location, so the Wyloo deal was consummated. 

West Ragland was originally an Anglo-American project. That company had made some discoveries, including very high-grade nickel (3%), copper (1%), and PGM (3 to 4 g/t) at the Frontier Zone. 

This is a very high-grade asset, having very similar ore grades, metallurgy, and geology to the Raglan mine, which is just 90km to the east of West Ragland. Ragland is one of the lowest cost producers in the world, according to Christie. There are not a lot of nickel sulphide projects in the world that can beat it. 

That’s the attraction that brought Wyloo to the project. Wyloo intends to spend $5 M at West Ragland this year, on top of the $1.9 M last year.

Orford remains the operator of the project. About 3000 m will be drilled there this year. In addition, Orford intends to conduct some geological mapping and geochemical sampling in underexplored areas of the property. 

The Value at West Ragland

Christie admits that it is tough to put an actual value on West Ragland at this point in time. That won’t be possible until a resource estimate is made. The company could probably calculate a resource on the Frontier Zone. 

The Raglan deposit, however, is a series of many pods of mineralization. At West Ragland, Orford has discovered a number of pods of mineralization, similar to the situation at Ragland. At this point in time, Orford needs more pods to make a viable deposit, which Christie thinks is quite possible. 

In 2021, Orford conducted an EM (electromagnetic) survey at West Ragland. There were 435 EM responses in the 67 line-km of EM that were done and 72 of those are high priority. The company will probably drill 10 to 15 of the best of those this year. The value on the property will become apparent through the drill-bit. Before 2021, this project hadn't been drilled since 2016. 

Drilling will commence this year at the end of June. Orford intends to keep drilling until the beginning of September. During the drilling season, the company also intends to come out with press releases that are important for the market. 

It’s a bit premature to estimate any economic numbers yet. West Ragland is so similar to the deposit at Ragland, that the existing mine at Ragland will likely be a good analog. At Ragland there are numerous ore-bearing pods along a 23 km strike length. 

Orford’s Gold Properties

Orford’s gold projects include the Qiqavik and the Joutel properties. Joutel is at an advanced gold exploration status, with approximately 20,000 m of historic drilling that has defined multiple gold zones. At Qiqavik surface mapping has identified over 10 high-grade boulder trains and shows at the surface over the 40km+ length of the property. Drilling has confirmed shear-hosted gold mineralization along several trends in various structural zones.

Joutel is the more advanced of the two projects. Orford is currently drilling at Joutel, specifically at the Joutel Eagle location. Orford picked up that property from Globex International at the end of November 2021. It's a project that sits in the Joutel mining camp. This is where Agnico Eagle got its gold mining start at the Telbel Eagle mine. Joutel Eagle is located right next door to the Maple Gold Agnico Eagle JV. The project is along strike with the Eagle Telbel mine that was operated till 1993. This area has seen very little exploration since that mine closed. 

Right now, Orford is drilling the South Gold Zone at Joutel. It is a 5 to 7 g/t vein system with sulphides that sits right on the same trend as the Eagle Telbel. Drilling of about 1,500 m in total this season is expected to confirm the mineralization, fill it in a bit, and extend it to depth. 

Business Constraints

As for many explorers, business conditions were tough for Orford in 2021 and into the beginning of this year. Both drilling companies and assay labs were very busy. The company is still waiting on results from samples sent in last summer. 

Staffing was difficult last summer as well, but Orford managed to get the people it needed. It hired another full-time person this year to beef up its own staff and stop relying so heavily on contractors for the summer. 

Costs have risen tremendously such that Orford will end up drilling less total length than originally planned because fuel prices are up about 70 percent. Nevertheless, it intends to drill 3000m at West Raglan, 1500 m 3,000 m at Qiqavik, and 1500 m at the Joutel Eagle project. Those three programs comprise a total of 7500 m of drilling, representing the biggest drilling year that Orford has ever had. 

Money Raised

In 2021 Orford raised money several times. Because of that, the company’s program for 2022 is fully funded. In December, Orford announced that it had raised gross proceeds of $5 M. Earlier in 2021, it also was able to raise $1.92 M. Alamos Gold, Orford’s main strategic investor, participated in that earlier financing at a pro-rata level of 23.03 percent. These raisings were in addition to the money infused into the company with the Wyloo deal. 

Christie’s View on the Gold Market

The CEO offered his view on what the gold market will look like going forward, and especially how it might affect junior explorers like his company.   He thinks the market needs to see a sustained rally; it needs to pop above $2,000 and then continue. He believes that the market will indeed do that. 

No matter what the Fed does, he doesn’t think that the US monetary policy makers are going to get inflation under control. Gold is a great way to hedge against inflation. And then, of course, there are all the uncertainties in the world as well. Gold, again, is a great hedge against that uncertainty. Christie believes that gold will have a great year. 

There will likely be some volatility. Christie thinks that once there is a sustained rally, without having big pullbacks, then the juniors will kick in. Senior companies need to find new reserves and new gold deposits. That's why Orford has Alamos invested in it. So investing in juniors that actually go out there, do grassroots exploration, and make discoveries is probably the only way senior companies are going to find new reserves.  

What Will Be Different This Year for Orford?

Christie believes that two big changes are in the cards for Orford’s fortunes in 2022. First of all, he expects that the company will see some good results with its drilling on the Joutel Eagle location. He expects to get to a resource assessment there within one to two years. 

Secondly, there’s tremendous scope in the nickel sulphides at the West Raglan project. There are not many of these kinds of projects around. Most juniors hunting for nickel are in early stages, whereas Orford has nickel on the ground, and is continuing to look for more of it.

To find out more, go to the Orford Mining website