By Peter Kennedy
Wallbridge Mining Co. Ltd. [WM-TSX, WC7-FWB] shares were active Wednesday September 26 after the company said drilling has intersected high-grade gold in a newly discovered zone at its 100%-owned Fenelon gold property in Quebec.
The news comes just two weeks after Wallbridge raised $3.9 million by issuing 30 million units at 13 cents per unit in a private placement to a numbered company controlled by Bay Street gold bug Eric Sprott.
The units issued to Sprott consist of one common share and one-half share purchase warrant. Each whole warrant entitles the holder to acquire an additional common share for 24 months after the closing date at an exercise price of 20 cents.
In a press release on Wednesday, the company said underground drilling intersected 122.35 g/t gold over 2.95 metres and 41.02 g/t gold over 5.52 metres in the Habanero Zone, a new structure that was discovered during last year’s drilling program.
Assays are contained in a news release that also provided an update on the ongoing development as part of a 35,000-tonne bulk sample and underground exploration program.
Wallbridge was active on the news, falling 18.7% or $0.06 to 26 cents on volume of 6.8 million. The stock is trading in a 52-week range of $0.055 and 35 cents.
Wallbridge has said it is establishing a pipeline of projects that will support sustainable production and revenue as well as organic growth through exploration and scalability.
Its portfolio includes the Fenelon Gold property, which covers 1,052 hectares and is located in northwestern Quebec, about 75 km northwest of Matagami. The project is proximal to the Sunday Lake Deformation Zone, which hosts the Detour Gold Mine in Ontario and Balmoral Resources Ltd.’s [BAR-TSX, BALMF-OTC] gold deposits at Martiniere.
The Fenelon property hosts the Discovery Zone gold deposit and surrounding 4-km strike length of gold-hosting secondary splay of the Sunday Lake Deformation Zone.
Since acquiring the property in late 2016, Wallbridge has completed an updated resource estimate and a positive pre-feasibility study (PFS) on the existing gold resource, which consists of 38,000 ounces in the measured and indicated category, plus a further 1,900 ounces of inferred material.
The PFS estimates a pre-tax net cash flow of $6.62 million and project pre-tax Internal Rate of Return of 92% for the initial approximate 18-month mine life for the known reserves located above a depth of 100 metres and located within close proximity to the existing ramp.
Results of the 2017 drilling, along with geological and structural modelling combined with a reinterpretation of the deposit have led to an expanded exploration target of an additional 70,000-120,000 ounces of gold, the company has said. This target is in addition to the 2016 resource estimate.
“With a high margin pre-tax return of 92%, the PFS supports that Fenelon is well placed to become one of the high margin, low cost producers in the camp,” said Wallbridge CEO Marz Kord. “The next key step in the development of Fenelon is the continuation of the permitting process as well as exploration around the existing deposit to add potential ounces and extend the mine life,” he said.
In addition, the company has completed surface exploration drilling campaigns and is currently drilling from underground as part of its 35,000-tonne bulk sample.
On Wednesday, Wallbridge said 8,000 tonnes of ore have been shipped to the nearby Camflo mill and processing of the first batch is nearly completed. The company also said visible gold was observed to be present in 41 of 63 holes drilled to date. Assays from 31 drill holes are now pending.
“The results released today confirm the exceptional quality of the mineralization discovered in 2017 in the West Extension area,” said Attila Pentek, Vice-President, Exploration at Wallbridge. “We are especially pleased with the fact that the sort of grades and thicknesses that have been shown in the Chipotle and Naga Viper zones are now being intersected in the Habanero Zone, which is a new structure discovered during last year’s surface drilling program,” Pentek said.
“This West Extension area remains to be one of the main focuses of our continued resource expansion drilling both from underground and surface.’’
The bulk sample is expected to produce between 19,000 and 26,000 ounces of gold, with close to 50% of the gold priced at CDN $1,720 per ounce. This bulk sample program is designed to test a few stopes in several zones, the company said.
In addition, the company said a 10,000-metre surface drilling program is starting up this week to follow known mineralized zones and expand resources at depth, and further away from the mine workings.
Meanwhile, Wallbridge has exposure to active exploration for copper and gold in Jamaica and British Columbia, through its 15.5% ownership of Carube Copper Corp. [CUC-TSXV].