Chalice Gold Mines and Enforcer Gold Commence Drilling Programs
Chalice Gold Mines (TSX-V: CXN) will soon commence a AUD$5 (CAD$4.92) million exploration program to rapidly advance the East Cadillac and Kinebik gold projects, hosted in the prolific Abitibi Greenstone Belt, in Quebec, Canada. Chalice currently options the East Cadillac property from Globex Mining Enterprises (TSX: GMX – $0.50 & OTCQX: GLBXF – $0.36 & Fra: G1MN – €0.32).
The East Cadillac property is located 35km east of Val-d’Or and covers 16 kilometres (~10 miles) of strike of the eastern part of the Larder-Lake Cadillac Fault, which has a gold endowment of no less than +100M ounces.
The planned 9,500m drill program, in the second half of 2017 on the East Cadillac and Kinebik gold projects, will test multiple targets, including extensions of the existing high-grade gold mineral resource and along the prospective Larder-Lake Cadillac Fault corridor.
Judging from the overview below, it’s obvious that a majority of Chalice’s budget will be used to advance Globex’s portion of the East Cadillac project.
September 2017 Quarter
December 2017 Quarter
|East Cadillac Gold Project|
Extensive surface sampling and trenching
|IP Geophysical Survey|| |
390 line km
|Kinebik Gold Project|
|IP Geophysical Survey|| |
55 line km
Overview and approximate timeline for proposed FY 2018 exploration program. Source: Company press release.
The East Cadillac project includes an initial indicated mineral resources of 225,000t @ 4.17g/t gold for 30,200oz gold and an inferred mineral resource of 1,112,000t @ 4.09g/t gold for 146,300oz gold, which the Company considers to have substantial growth potential.
No modern surface geochemistry, geological mapping or structural analysis has been completed in the district. Chalice has analyzed historical exploration information and merged this data with results from recent exploration activities undertaken by the Company. This compilation will provide the basis for an integrated approach to exploration targeting over the Company’s consolidated land position.
Chalice’s exceptional balance sheet of AUD$53 million in cash and liquid assets means that it is well positioned to quickly escalate exploration activities if necessary.
To exercise its option, Chalice must over a four‐year period, pay Globex $590,000 and undertake $2,500,000 in exploration expenditures as outlined below.
In addition, if Chalice earns a 100% interest in the claims, Globex will maintain a 3% Gross Metal Royalty on all metals and minerals produced from the property.
Minimum Work Expenditures
|2||$140,000||+ $500,000 completed|
|3||$140,000||+ $500,000 completed|
|4||$20,000||+ $1,150,000 completed|
As the option agreement between Globex and Chalice was signed in October 2016, the latter has to pay $170,000 to Globex in October of this year in order to maintain the property option.
Enforcer Gold Commences Drilling on Montalembert Project
After Enforcer Gold (TSX-V: VEIN) initiated a ground Induced Polarization (“IP”) geophysical survey on its Montalembert property a couple of weeks ago, the company now announced the start of a 5,000 to 8,000m drill program on the high-grade gold project.
Drilling will focus primarily on the Galena and No.2 gold bearing vein systems where previous surface channel sampling has returned impressive assays in excess of 500 g/t Au.
The drilling program will initially target the veins at ~25-50 m center’s and to a vertical depth of ~200 m. The program will utilize HQ-sized coring equipment with a core diameter of 63.5 mm or 2.5 in, allowing for a much larger sample size and visual representation of the geology and mineralization. Enforcer will use large diameter HQ coring to mitigate the nugget effect, as a larger cut through the mineralized zone increases the chance of obtaining a representative sample.
There are five major “wire line” tube sizes typically used (see table below). Larger tubes produce larger diameter rock cores and require more drill power to drive them. The choice of tube size is a trade-off between the rock core diameter desired and the depth that can be drilled with a particular drilling rig motor.
Outside diameter (mm)
Inside diameter (mm)
Standard "Q" wire line bit sizes. Note that 10 mm equals 0.3937 inches
Steve Roebuck, President & CEO of Enforcer commented, “We are very excited to get drilling on the Galena and No. 2 veins and test the continuity and grade of the mineralized structures at depth. This will be the first ever large-diameter core drilling on the veins, which from our experience will be key to assessing their potential. The Galena and No. 2 veins are currently the most advanced drill targets on the property, but there are several other high-priority targets that we will be advancing to drill-ready stage in the coming months.”
Similar to Chalice, Enforcer can earn a 100% interest in the property over a 4 year period by paying Globex $2.6 million, issuing 8.5 million shares of common stock and by undertaking $15 million in work. Globex retains a 3.5% Gross Metal Royalty on all production from the property.
In addition to the two previous companies advancing their properties, Globex recently acquired five silica projects in Newfoundland, Canada. These were the first properties acquired by Globex in this province. The Company was able to immediately sell them, along with three silica projects in Quebec, to a third party. Globex maintains a royalty on all eight properties.
Chalice and Enforcer are only two of several option partners that are advancing one or more projects from Globex. In return, Globex receives cash and/or shares from the optionees, and it maintains a royalty on the metals and minerals produced.
Moreover, if an option partner isn’t able to make all the cash and share payments, or if it is not able to do all the work on the property that it is required to do, then the property is returned to Globex.
We continue to believe strongly in Globex’ long term strategy to create stable returns for its shareholders. Recommendation BUY.
|Smallcaps.us Advice: Buy||Price Target: $2.87||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|