By Stew Vorberg and Doug Wood
In our opinion, people are a key ingredient to success in the resource sector. We believe Margaux Resources [MRL-TSXV] has assembled a quality mining team and have acquired two undervalued gold projects in British Columbia.
What initially caught our attention was the fact that the former President CEO of IAMGOLD, Stephen Letwin, has joined Margaux Resources as a Director. His brother, James Letwin, is also a Director and Chairman of the Company. In addition, Chris Stewart, President and COO of McEwen Mining also sits on the board. The Letwin family currently holds a 7% interest in Margaux and Management collectively owns about 11% of the Company.
Margaux has focused its attention on Orogenic Gold deposits in British Columbia. This style of gold deposit currently accounts for over 80% of gold production in Canada. A 2017 Geoscience BC report examined structural ore controls in the Cariboo, Cassiar and Sheep Creek mining districts. This report sparked a reinterpretation of historic data and led Margaux to develop a new exploration model that looks at both the historic high-grade gold veins and associated lower grade bulk tonnage mineralization.
The Company’s Cassiar and Sheep Creek projects are located in North-Central and South-Central BC, respectively. Both of these regions are well known orogenic gold districts that have seen historic high-grade vein production but no bulk tonnage production.
The Cassiar project currently hosts a 1 million ounce near surface inferred resource averaging 1.43 g/t gold in what it has dubbed the Taurus Zone. The resource is based on a cut-off grade of 0.7 g/t gold and is contained within 21.8 million tonnes of rock. Margaux management believes there is excellent potential to expand this resource along strike and has already identified other bulk-tonnage targets nearby.
Another target, known as Table Mountain and lies about 7.5 km south of the Taurus zone. Table Mountain encompasses several underground mines that operated between 1979 and 1997 and collectively produced 350,000 ounces of gold from a series of high-grade veins. Some of these veins still host historical resources. In addition, there are numerous additional veins that lie within a 15-km-long vein trend that have seen little or no drilling and no previous mining.
The 39 km2 Sheep Creek project was consolidated by Margaux in 2017. The region hosts over 70 known gold bearing veins that stretch out over a 10-km-long belt. Historical records from 1900 to 1951 indicate that 32 past producers recovered about 785,000 ounces at an average grade of 14.4 g/t gold. Some of these veins reported excellent continuity and were mined over strike lengths of 950 metres and 240 metres down dip. There has been no significant exploration since mining ceased in 1951.
Since acquiring the project Margaux has drilled 34 holes, completed a LIDAR (Laser Imaging, Detection, and Ranging) survey and performed geological mapping and 3D modelling. Results have singled out the Bayonne vein as a high priority target due to its low-grade, bulk tonnage gold potential at the east end of the Main vein system. In addition, geologists have identified a potential high-grade shoot under the A Vein, a splay off the Main vein of the historical mine.
Five holes drilled under level 8 of the mine outlined high-grade gold and silver mineralization over 350 metres of strike length of the A Vein. Highlights include: 1.4 metres averaging 39.43 g/t gold and 131.2 g/t silver, 1.22 metres averaging 14.04 g/t gold and 50.2 g/t silver and 1 metre averaging 12.7 g/t gold and 22.6 g/t silver. The mineralization remains open for expansion along strike and at depth.
Margaux Resources caught our attention, not just because of a high-profile management but also because of the company’s vision moving forward. Testing known gold camps with existing infrastructure for previously unrecognized potential has proven very successful for companies in other gold camps such as Kirkland Lake, Barkerville/Cariboo, Campbell-Red Lake and even IAMGOLD’S Rosebel & Sarimaka operations in Suriname.
Margaux Resources currently has a market capitalization of about $19.5 million with 177 million shares outstanding.
Stew Vorberg and Doug Wood are Investment Advisors with Mackie Research Capital Corporation (MRCC). This article was prepared, in part, under contract by Thomas Schuster. The opinions, estimates and projections herein are those of the authors and may not reflect that of MRCC. The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. The issuer(s) mentioned in this article may not be suitable for all investors. Please consult an investment professional for advice regarding your particular circumstance. Neither the author nor MRCC accepts liability whatsoever for any loss arising from any use of this article or its contents. Information may be available to MRCC which is not reflected herein. This article is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. The information contained in this article is not intended to constitute a research report. Stew Vorberg and Doug Wood are beneficial owners of the company highlighted in this article.