EGR options out Urban Berry project in Quebec to Harvest Gold – Richard Mills

2023.12.23

EGR Exploration Ltd. (TSXV: EGR) has moved from owner to shareholder at its Urban Berry project in Quebec, this week announcing it is optioning out the property to Harvest Gold.

The agreement involves the option and sale of 122 claims within the 6,879-hecatre property. EGR will receive $90,000 in cash and 1.7 million Harvest Gold shares, plus a 2% net smelter returns (NSR) royalty. Harvest Gold is also required to spend a minimum of $300,000 on exploration in the first two years.

EGR will receive another million shares upon Harvest Gold announcing a resource estimate of 1 million ounces in the inferred category.

The Urban Barry project is in Quebec’s James Bay region, adjoining  Osisko’s Windfall deposit, which holds nearly 4 million ounces of gold resources. The Langlois base metal-silver-gold mine is approximately 30 km to the northwest.

“This is an accretive transaction for our shareholders. We now are shareholders in Harvest Gold, a Quebec-focused gold exploration company that will move the Urban Barry property forward,” EGR’s CEO Daniel Rodriguez stated in the Dec. 19 news release.

“This mining district is heating up with recent transactions, led by the 50/50 JV of Osisko’ s Windfall property with Gold Fields Limited and infrastructure announcements with Hydro-Quebec,” he added. “Harvest Gold, whose management team is motivated, experienced, and very strong technically, is more than capable of making a new discovery in the Abitibi region. We look forward to their success with both their Quebec acquisitions.”

From November 2019 to March 2020, EGR flew an airborne drone magnetic geophysical survey over the property. Results from this survey confirm the presence of the northwest extension of rock units and fault structures hosting the nearby Windfall gold deposit.

Detour West project

EGR’s flagship Detour West property is approximately 300 km north of Timmins, Ontario and covers 40,255 hectares of the Abitibi Greenstone Belt, one of the most prospective regions for gold on the planet.

World-renowned for its gold endowment, the Abitibi boasts over 300 million ounces of gold in past production, reserves and resources.

Notable Abitibi gold deposits include Canadian Malartic , with 1.6 million ounces Oz gold in proven and probable reserves; Macassa @ 1.Moz Au P&P reserves; Casa Berardi @ 2.5Moz Au P&P reserves; and  Detour Lake @ 20.7Moz Au P&P reserves.

The Abitibi region hosts several key players in the gold mining and exploration space, including Agnico Eagle and Newmont, the world’s leading gold miner.

Agnico’s portfolio includes Canada’s largest gold operation at Detour Lake (proven and probable reserves of 20.7Moz as of February), which has a mine life of ~22 years with expected average gold production of over 700,000  ounces per year.

In addition to Detour Lake, Agnico owns the Canadian Malartic mine in northwestern Quebec, which had been the largest open-pit gold operation in Canada prior to 2022. The company is also developing the Macassa and Goldex projects and the LaRonde complex within the Abitibi belt.

Newmont maintains a significant presence in this prolific greenstone belt with three projects: Éléonore, Porcupine and Musselwhite.

Detour West is 150 km from Cochrane, ON, off a highway that is maintained year-round. The project is accessible via a network of trails and logging roads. Paved road, cell service and power run through the southern and eastern portions of EGR’s Detour West project.

In July 2020, EGR — under its previous name Gambier Gold — entered the Detour West project after signing an option agreement on the property.

To maximize its chance of success, EGR has since increased its landholding and consolidated the entire 40,255-hectare Detour West project area, which is now 35 km long by 15 km wide.

It then carried out an airborne magnetic survey covering approximately two-thirds of the property to investigate the extensions of various deformation zones known to be associated with gold mineralization along the famous Detour-Fenelon trend. Gold mineralization is associated with the structural contact between mafic to ultramafic volcanic rocks of the Deloro Assemblage (DA) and younger Caopatina Assemblage (CA) sediments. This structural contact is a regional-scale thrust zone, the SLDZ, which is spatially related to over 20Moz of gold reserves at the Detour Lake mine.

The project is underexplored, with only nine diamond drill holes (1,326m) sunk to a vertical depth of 122m, testing the property to date.

EGR’s exploration plan simple: replicate the same methods that have been successful for Agnico Eagle at the Detour Lake mine.

The company is currently analyzing the mag survey to provide what it considers to be a “superior and consistent dataset” that will be used to refine targets and identify potential areas of interest. These findings, according to EGR, will guide the implementation of a comprehensive till and top of bedrock reverse circulation drill program, which it expects to start in Q4.

In an interview with Ahead of the Herd, CEO Daniel Rodriguez said the company plans to test the extension of the Sunday Lake formation, trying to prove that Detour West is on trend with Agnico Eagle’s Detour Lake mine and its 20.7Moz of reserves.

As mentioned, an airborne magnetic survey has been flown on the property, located 20 km west of the Detour Lake pit. That survey, plus historical data, a Lidar interpretation, and limited outcrop prospecting, indicate there are possible gold-bearing structures running onto Detour West.

The next step is to drill it.

“We have areas of interest that we want to go and drill to prove that we are the extension, and to prove that we can make a discovery similar to the Sunday deformation that is home to the Detour Lake mine,” said Rodriguez.

The drill program envisions a regional approach to investigating prospective structural environments across the sprawling 40,000-ha property. To do that, 85 reverse-circulation (RC) holes will be sited on fences spaced roughly 3 km apart, with the holes on each fence spaced every 400m.

“That will give us a giant picture of the property and then be able to narrow down our targets further,” said Rodriguez. 

The upcoming drill program will cover 30 km of prospective strike and up to 3 km across multiple shears. The idea is to identify “gold dispersal trains”, areas where glaciers dug into the surface lithology, carrying gold as they moved across the landscape. The RC holes will drill into the glacial till, which averages about 40 meters, aiming to find gold. After enough data has been collected, the goal will be to trace the gold dispersal trains back to the source.

Says Rodriguez:

“We’ve created our plan for drilling and we have fences running across two of the major structures that we see. We worked with a group called Terrane Geoscience and with Equity Exploration, and they did their interpretation as well on the property. We’ve come up with a number of targets and you can see on the slide it shows the targeted zones A, B, C, D and E.”

Rodriguez said the idea is to test several targets and not just hone in on one or two because it’s possible a discovery could be missed that way. It’s a smart approach, imo, and one that if successful, could work to attract a major mining company’s interest.

“I’d rather scratch a majority of the area to know where we need to, or not, scratch later,” he said, adding “I want to make sure that we’re covering this whole thing.”

Once EGR can show enough gold-in-till from the fenced RC holes it can vector into the source of the mineralization.

EGR Exploration Ltd.
TSXV: EGR
Cdn$0.05, 2023.12.21
Shares Outstanding 40.2m
Market cap Cdn$2.0m
EGR website

Richard (Rick) Mills
aheadoftheherd.com
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