Wallbridge Mining (WM) - Settling into a Multi-Million Ounces Rhythm

We spoke recently with Marz Kord, President and CEO of Wallbridge Mining. He shared with us some of the exploration news from their flagship asset, the Fenelon Gold Project, in Québec, Canada. He also spoke about their upcoming maiden mineral resource estimate at Fenelon.

Company Overview

Wallbridge Mining is an advanced exploration and development company driven by a strategic and targeted approach to value generation. The company primarily explores for gold, copper, and nickel deposits, as well as platinum group metals. Current activities are mainly focused in the tier-one Detour-Fenelon Gold Trend of Québec, Canada, where they have a district-scale land position. The Company’s maiden mineral resource estimate at its flagship Fenelon Gold Project is expected by the third quarter of 2021. 

The company has a market capitalization of $480 M. Its shares are listed on the TSX and the OTC. There are over 813 M shares outstanding.

Management Team

In addition to the CEO, Kord, the company is managed by Brian Penny, CFO; Francois Demers, Vice President Mining and Projects; Mary Montgomery, Vice President Finance; Attila Péntek, Vice President Exploration; Sean Stokes, Corporate Secretary; and Victoria Vargas, Investor Relations Advisor. A nine-member board of directors assists management.

The Flagship Project: Fenelon Gold

The Fenelon Gold project is located approximately 75 km. west-northwest of the town of Matagami, Québec, Canada. Gold mineralization on the Fenelon Gold property was first intersected by Cyprus Canada in 1988. Walbridge acquired Fenelon in 2016 from Balmoral Resources. 

Wallbridge is currently engaged in a robust drilling program at Fenelon. Maiden mineral resource is expected in the third quarter of 2021. 

Detour-Fenelon Gold Trend

Geologically, Fenelon is located in the Detour-Fenelon Gold Trend, part of the Archean Abitibi Subprovince. Gold and other mineralization found there are typical of orogenic gold deposits in terms of metal associations, wall-rock alteration assemblages, and structural controls. 

The Detour-Fenelon Gold Trend has demonstrated potential for world-class gold deposits, yet it remains relatively underexplored in comparison to the other prolific gold belts in the Abitibi Province, an established gold mining district having produced over 100 mines, and 170 million ounces of gold since 1901.

Wallbridge's regional Detour-Fenelon land package offers excellent potential for new gold discoveries. The trend has seen quite a bit of activity lately. There have been a few acquisitions made recently and kord expects to see more. 

How Are Wallbridge Shareholders Doing?

Kord indicated that he believes the company shareholders are faring well. The stock price is up from $0.16 in 2019 to near $0.60 as of late August 2021. Wallbridge has been creating value for shareholders, especially with the large gold system that they have demonstrated at the Fenelon Project. Kord feels that the market may have overpriced their stock a bit of late, but the share price will continue to play out well, he said, because the company just keeps making upside-surprises with their exploration program. 

The next upside catalyst for share price increases will come in the third quarter of this year when the maiden resource estimate at Fenelon will be announced. Not only will numbers come out but also they will show that there is even more upside potential, not only at Fenelon but also in other assets, such as Martinière and Casault, which they have in the trend. 

Company Cash Position

The company is in a good position regarding cash. They are sitting on close to CAD $70 M in the company treasury. By the end of the year, they’ll have close to CAD $50 M in the treasury. The company is well funded for 2021 and well into 2022. 

The main issue is not having money, but focusing properly on what to do with that capital. Kord and the rest of the management team make decisions based on getting the best value for shareholders. They do not make knee-jerk decisions based on metal prices. When a company loses focus, its market cap can deteriorate quickly. 

Most recently, the company completed two bought-deal financings in October and November of 2020. Close to CAD $63 M was financed. This money was raised at a premium because the investors did their due diligence and were able to see the outstanding value that Fenelon and other Wallbridge assets represent. 

Major Shareholder Influence

Several of the company’s major shareholders include Sprott and Kirkland Lake. Both are important players in the Detour-Fenelon Gold Trend. Despite their prowess, they do not influence the decision-making at Wallbridge. 

In 2019 Wallbridge was looking for a strategic partner. Kirkland Lake was the one that wanted to come in, and they became a 9.9% shareholder. They’ve been a very supportive investor. They have a director on Walbridge’s board, whose input is given on behalf of the board of directors. Kirkland Lake is potentially interested in acquiring the Fenelon property, but there is a lot of other interest from other companies as well. 

Wallbridge also has an excellent relationship with Eric Sprott. He does not influence how Kord runs the company. 

This is not to say that there is no competitive tension, given the value creation that has been occurring at Fenelon. Wallbridge is continuing to meet with various institutional investors and corporate groups that have shown interest in Fenelon and other company assets. Four analysts, BMO, Paradigm, Eight Capital, and Cormark, are now covering the company. If they indeed do sell it, they certainly aren’t going to sell it cheaply, said Kord.

Activity at Fenelon

Wallbridge has been committed during the first half of 2021 to maximizing the Fenelon’s maiden resource estimate.  Their main reasoning is that they want to ensure that the market truly recognizes the value of the asset. In the second half of the year, their focus is two-fold: 

1.   To still extend the known mineralization at Fenelon itself because when they purchased the property it was only 10 square km., and 

2.   To ramp up regional exploration along the trend.

With regard to the second objective, there is ongoing drilling at the Martinière asset where the company believes there are higher grades to be found by deeper penetrations. There is also exploration drilling on the Casault property.

As far as the maiden resource estimate at Fenelon, the company has been saying that it will be a “multi-million-ounce deposit”. It’s going to be a combination of underground as well as an open-pittable resource. The maiden resource number will cover a 1km. by 1.2 km. area down to about 1,000 m. The actual number will be revealed in due course, but kord did say that they have been very happy with the drilling results to date and what they are going to deliver to the market. One issue that they have had is the big slowdown, often 8 to 12 weeks, in the turnaround of assay results from the labs.

Drilling Synopsis

Wallbridge is in the midst of a 20,000 m drilling program. They have sufficient cash in house to carry that forward to the end of 2021. They’d like to drill 30,000 m if there is time at the end of the drilling season. At Martinière specifically, they would like to have more holes drilled. In addition, next year there will be infill and extension drilling at Fenelon designed to build onto the maiden resource numbers. 

Pull Back from the Small-Scale Permitting Plan  

Back when they hadn’t even understood the real size of the Fenelon deposit, Wallbridge had applied for a small-scale permit to mine 500 to 600 t per day, which would give roughly 30,000-to-40,000 oz. production per year. They quashed that plan when they realized the size of the deposit was much larger. They did so simply because it made economic and market sense: It was more expensive, possibly distracting, and possibly damaging to the risk profile of the future success of the much larger deposit. At the end of the day, they wanted to ensure that shareholder value was maximized. 

Wallbridge’s Nickel Assets

Management has been getting a fair number of ideas on how to navigate the company, especially from the retail investor crowd. Some investors wonder why they haven’t monetized their nickel assets. 

Kord says that they are primarily a gold exploration company that wishes to focus principally on the Detour-Fenelon Gold Trend. In terms of their nickel assets, they have to work the proper deal, including the nickel-grade component of some of their assets, with Sibanye-Stillwater and others in order to monetize prudently. They don’t want to hand this to some group that is not capable of getting value from it because they believe that they are actually better off just sitting on it rather than giving it to someone that’s going to lose value. There are also tax implications for the shareholders should such a deal be consummated. 

That being said, Kord indicated that there is a lot of work that is being done by the company regarding the possibility of spinning out the nickel assets getting good value for it. It’s about timing, valuation, and picking the right potential partner. 

Closing Thoughts for Investors

Investors should stay tuned to the September 30th maiden resource announcement. kord believes that the forthcoming resource numbers won’t disappoint them.

To find out more, go to the Wallbridge Mining Website