Unlocking Value in the Urban Barry Gold Camp: An Overview of Bonterra Resources

• Bonterra Resources is a junior gold exploration company located in Quebec near Val-d'Or with over 3 million ounces of measured and indicated gold resources.
• They have two main deposits, the Barry and Gladiator, and infrastructure including a 800 tpd mill, tailings facility, and mining camps.
• The company had planned to restart gold production but high operating costs caused them to pause plans. Now focused on exploration and finding a strategic partner.
• Recently generated $1.6 million from selling 600 ounces of gold recovered from mill cleanup. More mill cleanup underway.
• Raising $3-5 million and planning 13,000 meters of drilling by year-end, focused on expanding resources at depth and testing new exploration targets identified nearby.

About Bonterra Resources

Bonterra Resources is a Canadian junior gold exploration and development company focused on advancing its projects in the Urban Barry gold camp in Quebec, Canada. With over 3 million ounces of gold resources, existing infrastructure including a permitted 800 tonne per day mill, and extensive regional exploration potential, Bonterra offers investors exposure to a potentially significant new Canadian gold district.

Bonterra Resources is led by President and CEO Marc-Andre Pelletier, a mining engineer with over 25 years of hands-on experience developing and operating gold mines across Canada. Since joining Bonterra in 2021, Pelletier has focused on reducing costs, generating revenue from residual gold recovery at the mill, and advancing permitting and development of the company’s gold deposits.

Bonterra’s main assets are the Gladiator, Barry, and Bachelor deposits located in the Urban Barry gold camp in Quebec. The camp contains several past producing mines and hosts over 10 million ounces of gold resources controlled by multiple companies. Bonterra itself has consolidated a significant land package covering most of the prospective ground.

The flagship Barry deposit contains 650,000 ounces of gold in the measured and indicated resource categories amenable to open pit mining. An updated preliminary economic assessment (PEA) is currently being finalized. The nearby Bachelor deposit, located just 500 metres from Bonterra’s mill, has an additional inferred resource of over 390,000 ounces and offers resource expansion potential.

Interview with Marc-Andre Pelletier, President & CEO of Bonterra Resources

Advancing the Projects

According to Pelletier, Bonterra’s strategy is to use a “bootstrap approach” to restart gold production in the camp. This involves beginning with a smaller starter operation to generate cash flow and prove the economic viability of the deposits prior to expanding production.

The Barry deposit was initially envisioned as the first phase given its current resources and accessible open pit mineralization. However, a sharp rise in operating costs led Bonterra to put development plans on hold until costs normalize.

In the interim, Bonterra has focused on evaluating strategic partnerships, reducing costs, and generating cash by recovering residual gold from the mill. This “housekeeping” has recovered over 600 ounces of gold worth C$1.6 million to date.

With a strengthened balance sheet, Bonterra has turned its attention back to exploration. A 13,000 metre drill program is underway targeting extensions of existing deposits and following up historic drill results that warrant additional testing.

One of the promising nearby targets is the Titan zone, located 1 km east of the Gladiator deposit. Previous drilling at Titan intersected significant mineralization pointing to the potential for a “twin” zone that could effectively double the existing resource. The current drill program will test these targets at depth in search of new discoveries.

Regional Potential

According to Pelletier, the Urban Barry camp is still in the early stages of exploration. Despite over 3 million ounces in known resources, the full potential of the camp is yet to be unlocked.

Pelletier sees an opportunity to significantly expand resources on Bonterra’s properties and make additional new discoveries. Pelletier believes there is realistic potential to increase resources from 3 million ounces up to 6-10 million ounces with further exploration.

Recent M&A activity in the region also points to the untapped potential. The sale of nearby Sigma Lithium Resources to Gold Fields for C$1.9 billion implies a valuation of over $100/oz of gold resources - far above Bonterra’s current valuation. Pelletier believes the right partnership could help catalyze value realization for Bonterra shareholders.

Funding Exploration and Development

In September 2022, Bonterra launched a C$3-5 million equity financing priced at C$0.17 per unit. The funds will support continued exploration and meet spending requirements related to previous flow-through financings.

With gold now trading back above $1700/oz, Pelletier believes it may be an opportune time for new investors to gain exposure. At a market capitalization of just C$25 million, Bonterra’s 3 million ounces of gold resources imply a valuation of only around C$6/oz - significantly below both the acquisition costs and NAV for comparable gold projects.

As exploration results start to flow in Q1 2023, Pelletier expects there will be several catalysts that could re-rate Bonterra’s valuation closer to its peers. A discovery of a new high-grade zone or meaningfully increased resource would be game-changers for the stock.

In the meantime, Pelletier says “it’s a game of chess” as Bonterra looks to balance advancing its projects while maximizing shareholder value. With a strengthened balance sheet and drilling underway, he is confident Bonterra has the right assets and team to successfully unlock the district-scale potential of the Urban Barry gold camp.

Conclusion

For investors seeking leverage to rising gold prices and high-impact gold exploration, Bonterra offers an intriguing opportunity. The company’s C$25 million market cap significantly undervalues its 3 million ounce gold resource base and does not reflect the substantial exploration upside on its prospective ground package.

With a project de-risked by existing infrastructure, strong management, and an exploration program funded, Bonterra is primed for a potential re-rating as the market recognizes the value opportunity. Patient investors could be rewarded as the company advances towards production and its extensive regional exploration generates new discoveries.