Probe Has Gold, Chromite and an AEM NSR
By Ted Niles
Between Probe Mines Limited’s TSXV:PRB Borden Lake gold project, its Black Creek chromite project, and a 5% Net Smelter Royalty on a portion of Agnico-Eagle Mines Ltd’s TSX:AEM Goldex Mine, David Palmer considers the company to be something of a steal at its current share price. “There’s probably a bit of a disconnect because we have disparate commodities. You never see chromite-gold companies,” Probe’s President and CEO says. “We’ve got these three very valuable assets, and I don’t know if the market values them all together. In terms of our market value now, it’s almost like you’re getting Borden Lake for free.”
It might also be that the market hasn’t quite caught up with Probe’s progress at Borden Lake. The company acquired the project as recently as March 2010, but by August 2011 it already had an NI 43-101 resource estimate of 300,000 ounces gold and 320,000 ounces silver indicated, as well as inferred resources of 3.8 million ounces gold and 5 million ounces silver. Palmer declares, “The first results we got back were phenomenal. It was top to bottom gold in that first phase drilling. Within nine months of making that discovery we took it to a resource estimate of 4 million ounces.”
Borden Lake is located in an unexplored part of the Kapuskasing Structural Zone in northeast Ontario—12 kilometres by highway from the town of Chapleau. Palmer describes it as “the easiest project I’ve ever had in terms of access,” and notes that Chapleau is industrially equipped, providing infrastructure advantages that should boost project economics. Borden Lake’s geological setting consists of Timiskaming sediments associated with the Timmins, Kirkland Lake and Red Lake mining districts. Palmer remarks, “The beauty of Borden Lake is that nobody’s been there before. It’s a brand new gold discovery. It’s not part of the Abitibi. What we have is a kind of a blank canvas, so the upside potential is really good. We’ve got about 17 kilometres of the belt; the first exploration and discovery on it.”
Probe is currently in the midst of its Phase 2 drill program at Borden Lake. September 19 assays include
- 2.3 grams per tonne gold over 17.7 metres (including 9.2 g/t over 3.7 metres)
- 0.6 g/t over 100.5 metres (including 1.2 g/t over 17.5 metres)
- 10.9 g/t over 6.6 metres (including 57 g/t over 1 metre)
- 0.6 g/t over 93.9 metres
- 0.8 g/t over 129.9 metres (including 1.8 g/t over 38.3 metres)
- 0.6 g/t over 113 metres
- 0.6 g/t over 130 metres
Palmer comments, “I think we’re up to Hole 115, and it’s still open in all directions. Because we are the first to be drilling here, we’re on a bit of a steep learning curve. So we don’t know what to expect. Borden Lake is in that low-grade bulk-tonnage model, so to be seeing some of these higher-grade zones is really nice. All we know right now is that it’s big and consistent. Getting these high-grade zones raises expectations, and hopefully we’ll get more.”
Less than a year after discovery to be at the stage where we have a 4-million-ounce gold resource, open in all directions, I think is really promising —David Palmer
The next steps will be to complete metallurgical testing and update the resource. While admitting that it is a best-case-scenario target, Palmer hopes to have a preliminary economic assessment completed as early as January 2012.
Probe is not yet earning from its 5% net-smelter royalty at the Goldex Mine in Quebec’s Abitibi region, but Agnico-Eagle’s 2011 exploration drilling at the mine has been focusing on a number of targets within the royalty boundary. Also, an independent valuation of the NSR is being undertaken.
Probe’s Black Creek chromite project is located in northern Ontario’s Ring of Fire and is one of four projects comprising the company’s McFauld’s Lake property, totalling 14,000 hectares. Situated between Cliffs Natural Resources’ Black Thor deposit—the largest chromite deposit in North America—and KWG Resources Inc’s TSXV:KWG Big Daddy property, Black Creek has measured and indicated resources of 8.65 million tonnes averaging 37.4% chromite and inferred resources of 1.6 million tonnes averaging 37.8%. “We could continue drilling it to depth,” Palmer relates, “but I think at this point we’re waiting to see what happens in terms of infrastructure. A major hurdle to the Ring of Fire is the lack of infrastructure. So what we’d like to do is see how the other companies are progressing up there.”
He concludes, “We’re a small company, so our resources are all focused on Borden Lake right now. Borden Lake has done phenomenally well. It’s still early stage and we’ve got a lot left to do on it, but less than a year after discovery to be at the stage where we have a 4-million-ounce resource, open in all directions, I think is really promising. We’ve probably only scratched the surface of the potential on Borden Lake.”
Probe Mines Limited TSXV:PRB has two other Ontario gold projects, Cree Lake and West Timmins—the latter a joint venture with Lake Shore Gold Corp TSX:LSG. At press time, Probe had 56.7 million shares trading at $1.62 for a market cap of $91.8 million.