By Robert Simpson
Over the past decade, Happy Creek Minerals [HPY-TSXV] has built an enviable portfolio of mineral exploration projects in British Columbia. The company’s eight, early-stage projects include copper, molybdenum, tungsten, gold and silver prospects, which for the most part, are located in well-known mining districts. Now, after almost 10 years of systematic exploration, it’s a matter of finding the right joint venture partner, which given the company’s steady track record, could pay off.
Despite a brutal commodity market, the smart money sees this as an opportunity to build their portfolios by making strategic investments and waiting out the markets for their return on investment. Recently, as an example, there has been a marked increase in joint venture and M&A activities, which some analysts are pointing to as the first signs the struggling sector has reached its bottom. Noting the recent rise in the TSX Venture Exchange Composite Index, management at Happy Creek Minerals agrees.
“Recently there has been renewed interest in our properties, and we have signed a number of confidentiality agreements with companies and private equity firms interested in discussing joint ventures,” says David Blann, President of Happy Creek.
Of particular interest, for potential suitors, is the 100%-owned Fox property in the south Cariboo region. The Fox Project is thought to be a significant new tungsten discovery. Tungsten is used to strengthen steel in machine tools and parts, electronics and the military.
Chinese mines produce most of the tungsten in the world, while the world’s highest grade tungsten mine outside of China is the underground Cantung Mine in Yukon, which has grades around 1.0% tungsten, however it has recently shut down due to higher than average costs Very few tungsten mines are open pittable and have grades of over 0.32% tungsten, and that’s why when Happy Creek reported consistently strong tungsten grades near surface in the Ridley Creek zone , the world’s major producers or developers appear to have taken notice. With seven zones to explore, and one having an NI43-101 compliant resource containing 0.468% WO3 and a low strip ratio at the Ridley Creek zone, the Fox Project has all the characteristics to be considered world-class.
The project is close to infrastructure, including roads, power and a skilled workforce. The tungsten is close to surface – and it’s big. So far, surface tungsten mineralization has been mapped over an area 10 by 3 km, and much of the 165 km2 property still hasn’t been explored. Three of the zones discovered span almost three kilometres that are connected by the same underlying geological strata where high-grade tungsten occurrences have been discovered.
“Since our drill results were made public we have been gaining attention from the global private equity groups who understand the tungsten markets. We have yet to continue drilling the BN zone where one hole hit three zones: 4.1m of 1.78% WO3, 14.8m of 4.0% WO3 and 24.0m of 0.79% WO3– probably among the highest grade tungsten drill result, ever.” says Blann. The next step for the company is to expand our NI 43-101 resource base and go to a PEA and Feasibility.
More exploration is planned for the Fox property this year, including trenching and drilling the South Grid target that is 1.25km by 500 m in dimension and begin preliminary environmental and mine engineering work with a view towards the project’s production potential. The company has a track record of spending funds fortuitously. With low overhead, more than 75% of all the money raised over the past 10 years has gone into exploration..
“I am proud of the fact the company started 10 years ago and despite being hammered by the financial crisis and then the last 4 years of evaporating interest in resources, we have managed to keep the share structure at 72 million shares outstanding and still have almost $600,000 dollars in the treasury,” said Blann, who only receives a modest salary from the company. “The goal this year is to first raise another $2.5 million dollars through a joint venture agreement, and continue exploration, PEA and Feasibility work,” he said.”I believe the Fox will jump to the top of the que for tungsten development, globally”.
While the Fox property is promising, this isn’t the only project of note in the Happy Creek portfolio. There’s also an exciting copper project in the Highland Valley Mining Camp. The Rateria and West Valley properties total about 18,000 hectares and adjoin Teck Resources’ Highland Valley Copper Mine property, Canada’s largest copper producer. Grades at Highland Valley average 0.25-0.32% copper from three different pits (Valley, Lornex and Highmont). Happy Creek’s drill results included 152.5 metres grading 0.35% and 95.0 metres of 0.67% copper in two new discoveries that are 6.5 km from a producing open pit.
Commodity markets will eventually turn around, and when they do, companies like Happy Creek Minerals will be rewarded.