Abitibi Royalties Inc.
(RZZ-TSX-V, ATBYF-OTC-Nasdaq Intl: “Abitibi Royalties” or the
“Company”) is pleased to provide an update on the Company’s net
smelter royalties (NSRs) at the Canadian Malartic Mine, Canada’s
largest gold mine, near Val-d’Or, Québec, in addition to other NSRs
the Company holds on early-stage exploration projects.
The
Company is unique among its peers due to its strong treasury, no
debt, quarterly dividend, share buyback program and limited number
of outstanding shares (approximately 12.5 million).
Royalties at the Canadian Malartic
Mine
The Canadian Malartic Mine, where Abitibi
Royalties owns various NSRs and a net profit interest (“NPI”), is
jointly operated by Agnico Eagle Mines Limited (“Agnico Eagle”) and
Yamana Gold Inc. (“Yamana”). Abitibi Royalties’ NSRs and NPI cover
portions of East Malartic (3% NSR), Odyssey (3% NSR), Sladen (3%
NSR), Sheehan (3% NSR), Jeffrey (3% NSR), Barnat Extension (3%
NSR), Gouldie (2% NSR), Charlie (2% NSR) and all of Midway (1.5%
NSR) and the Radium Property (15% NPI) (Fig 1.).
Production from some of the smaller open pit portions of the
royalties began in December 2018.
1) Odyssey & East Malartic
Potential Production (3% NSR)
The Company is advised that Odyssey and East
Malartic are being studied for potential underground mining from
surface to a depth of 600 metres, starting between 2021-2023 and
then potentially deeper beyond 2023 (Fig. 2). As
last reported by Yamana, preliminary studies show the potential for
production increases of approximately 150,000 gold-equivalent
ounces per year at the Canadian Malartic Mine with ore fed to the
existing Malartic mill, initially displacing a portion of the lower
grade open pit ores. Access for underground drilling and possible
mining would be by ramp extending from the Odyssey Zone. The permit
allowing for the development of an underground ramp was received in
December 2018. Further evaluation through additional underground
drilling would be followed by updates to the resource delineation
and engineering involving Odyssey and East Malartic, although the
areas of mineralization and potential extend beyond these areas. An
internal study to evaluate the potential development and production
from mining of these underground zones as well as synergies with
the open pit operation is in progress and well advanced. As
disclosed by Yamana, the internal study is expected to be completed
in Q1-2020.
2) Exploration Odyssey, East Malartic, Sladen &
Sheehan (3% NSR)
The Company understands exploration programs are
ongoing to evaluate several deposits to the east of the Canadian
Malartic open pit where the Company holds a 3% NSR. This includes
portions of Odyssey, East Malartic, Sladen, Sheehan and potentially
other newly discovered zones (Fig. 1). During
Q1-2019, exploration at the Odyssey deposit focused on defining
several internal zones and expanding the deposit towards the Rand
Malartic property boundary to the east (Fig. 1).
In June 2019, Agnico Eagle disclosed two new prospective areas that
are outside of the current NI 43-101 resource estimate. The first
is the Shaft 2 Prospect, located north of Odyssey and second is the
Piché-Harvey Prospect, which is part of the Midway Project
described below (Fig. 1).
Agnico Eagle previously disclosed that the
Canadian Malartic exploration programs in 2019 will consist of
47,400 metres of drilling (both capitalized drilling and expensed).
Subsequently, Yamana disclosed that its corporate exploration
budget for the remainder of 2019 will be increased by USD$10
million in order to build mineral reserves and mineral resources at
key operations. Yamana’s exploration plans are focused on
increasing the grade, mineral resources and mine life at the
Canadian Malartic Mine. Yamana is planning to issue a corporate
exploration update in Q3-2019.
In addition, a total of 3,000 metres of drilling
is budgeted for the Midway Project in 2019, where the Company holds
a 1.5% NSR (subject to a 1% buyback for USD$1 million)
(Fig. 1). The Midway Project hosts the main
portion of the zones of the former Malartic Gold Fields Mine that
had historical production of 1.7 million ounces of gold (9.0
million tonnes of ore) to a depth of 800 metres, from 1939 to 1965.
The property contains Shaft 1 of the Malartic Gold Fields Mine and
an underground ramp with access to the near surface zones and is
subject to a historical NI 43-101 resource estimate that can be
viewed here. Abitibi Royalties acquired the NSR in July 2018.
Early Stage Royalties
Update
In 2015, Abitibi Royalties began acquiring
royalties on early-stage projects near existing mines, where
historical exploration had outlined favourable geology with
indications of mineralization. The Company believed this was a
low-cost method of gaining increased exposure to favourable mining
regions. Since acquiring the royalties, a number of the projects
are now being advanced.
1) Red Lake Royalties (1%
NSR)
The Company holds various NSR interests located
near Newmont Goldcorp’s Red Lake Mine and adjacent to Pure Gold’s
Madsen Mine (Fig. 3) in Red Lake, Ontario. On July
16, 2019, Pacton Gold Inc. (“Pacton”) announced that a detailed
mapping and prospecting program is underway at their Red Lake Gold
Project (Fig. 3), with a 10,000 metre drill
program planned to commence in late summer. The initial program
will concentrate on the exploration of Riedel shear associated and
identified gold targets in the western part of the Red Lake
Project. Abitibi Royalties’ 1% NSR covers a number of key
historical gold occurrences within Pacton’s Red Lake Gold Project.
For additional details, including the location of gold occurrences
on the property, please see Pacton’s news release dated July 16,
2019. The Company does not know how much of the planned drilling
will occur inside Abitibi Royalties NSR.
2) Revillard Royalty (2%
NSR)
Abitibi Royalties holds a 2% NSR on the
Revillard property, located approximately 10 kilometres northwest
of the Canadian Malartic Mine in Québec (Fig. 4).
The Revillard property forms part of a larger set of claims known
as the Malartic Project, which is under option by Dundee Precious
Metals (“Dundee”). Dundee announced that a diamond drill
program consisting of 5,800 metres in nine holes started in March
2019. Drill targets occur along the gold-bearing Parfouru
deformation zone, and near last year’s initial discoveries. The
targets are being tested both laterally and at approximately 300 to
400 metres from the surface. The drill program was expected to be
completed during Q2-2019. Dundee has disclosed that once the drill
program is completed, results will be interpreted, and the summer
exploration program will be planned. The Company does not know how
much of the planned drilling will occur inside Abitibi Royalties
NSR. Under the option agreement, Dundee can earn an initial 51%
interest in the Malartic Project by spending CDN$2.5 million within
three years of the effective date of the option agreement (option
agreement announced July 4, 2017). Following that, Dundee will have
the further option to increase its interest to 71% by incurring an
additional CDN$3.5 million in expenditures on the property within
three years.
3) New Alger Project Royalty (1%
NSR)
Abitibi Royalties holds a 1% NSR on the New
Alger Project, which contains the historic Thompson-Cadillac Mine,
located in the Abitibi region of northwest Québec and contains a NI
43-101 Inferred resource estimate that can be viewed here. The New
Alger Project is 100% owned by Renforth Resources (“Renforth”) and
adjoins Agnico Eagle’s LaRonde Mine to the southeast (Fig.
5).
On July 9, 2019, Renforth announced that it is
planning to prospect and strip areas at and to the south of the
Discovery Veins. In addition, Renforth is planning preliminary
prospecting and potential soil sampling in the southern claims at
New Alger where government data shows some of the highest soil
samples obtained in the area.
Technical Information
The Company requires additional details before
it will know the full impact of the preliminary studies being
completed by Agnico Eagle and Yamana on any potential future
production at Odyssey and East Malartic. This includes the grade
and tonnes of the open pit low-grade ores that would be potentially
displaced by the higher-grade underground material from Odyssey and
East Malartic, subsequent production totals for each of these
deposits and the percentage of production coming from the area
covered by the Company’s 3% NSR. The Company has not received any
of the drill hole data from the exploration drilling at the
Canadian Malartic Mine in 2019 and there can be no assurances that
all or any of the drilling or new discoveries are in areas where
Abitibi Royalties holds an NSR. Similarly, the Company can provide
no assurances that all or any of the exploration drilling at
Pacton’s Red Lake properties or Dundee’s Malartic Project will
occur in areas covered by the Company’s NSRs.
About Abitibi Royalties
Abitibi Royalties owns various royalty interests
at the Canadian Malartic Mine near Val-d’Or Québec. In addition,
the Company is building a portfolio of royalties on early-stage
properties near producing mines. The Company is unique among its
peers due to its strong treasury, no debt, quarterly dividend,
share buyback program and limited number of shares (approximately
12.5 million).
QUALIFIED PERSON
Glenn Mullan, Chairman, is the Qualified Person
(as defined in National Instrument 43-101 – Standards of Disclosure
for Mineral Projects) who has reviewed this news release based
solely on the public disclosure provided by Agnico Eagle, Yamana,
Pacton, Dundee and Renforth and without independent verification
and is responsible for the technical information reported
herein.
For additional information, please
contact:
Shanda Kilborn –
Director, Corporate Development 2864 chemin
SullivanVal-d’Or, Québec J9P 0B9Tel.: 1-888-392-3857Email:
info@abitibiroyalties.com |
|
Forward Looking Statements:
This news release contains certain statements
that may be deemed “forward-looking statements”. Forward looking
statements are statements that are not historical facts and are
generally, but not always, identified by the words “expects”,
“plans”, “anticipates”, “believes”, “intends”, “estimates”,
“projects”, “potential” and similar expressions, or that events or
conditions “will”, “would”, “may”, “could” or “should” occur.
Although the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or realities may differ materially from those in forward
looking statements. Forward looking statements are based on the
beliefs, estimates and opinions of the Company’s management on the
date the statements are made. Except as required by law, the
Company undertakes no obligation to update these forward-looking
statements in the event that management’s beliefs, estimates or
opinions, or other factors, should change.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
Figure 1. Abitibi Royalties’ Canadian Malartic Royalties
and New Prospect Areas
Figure 2. Schematic Longitudinal Section of East
Malartic & Odyssey Projects
Figure 3. Abitibi Royalties’ NSRs in Red Lake
District
Figure 4. Abitibi Royalties - Revillard Royalty
Location
Figure 5. Abitibi Royalties - New Alger Royalty
Location
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