Cartier Resources: A golden layer cake in Quebec

If you look at Cartier Resources Longitudinal Composite Section at the top of this article you’ll see bands of mineralized material dropping down at a consistent angle from the surface. Like the bands of icing in a layer cake which has fallen on its side.

In the center of the diagram there is a 920 meter mine shaft with tunnels going off in either direction. This is the old Chimo Mine. It was closed in 1997 due to the collapse in gold prices. As Cartier CEO, Philippe Cloutier, pointed out in a 2020 interview I did with him for Motherlodetv.net, “Chimo did not close because they ran out of gold.”

The Chimo Mine is located on the prolific Larder Lake - Cadilac fault in Western Quebec. There are a string of gold-producing mines along the fault. They don’t call the main town Val D’or (Valley of Gold) for nothing - and there is no valley nearby. The province of Quebec is one of the best mining jurisdictions in Canada.

Over the years I have spoken with Cloutier many times and I have a share position in the company. One of the challenges Cartier faced was that its 43-101 gold resource was just a bit too small. That challenge has been met in the past by drilling the 28 gold zones which are part of 19 gold structures. In March 2021, Cartier was able to announce a new 43-101 estimate of 684,000 indicated and 1,358,000 inferred gold ounces. 2 million plus ounces of gold plus a 920 meter shaft and tunnels is a very attractive package. But was it enough?

This resource estimate was revised upwards to 720,000 indicated and 1,633,000 inferred gold ounces. Cloutier kept going. Cartier acquired the West Nordeau deposit 450 meters away from the Chimo shaft. Recently the company has been drilling in between the shaft and the West Nordeau deposit and it reported the first results March 2, 2023.

The grades and intervals in the two holes reported are very encouraging:

• In the 5NE Gold Zone, drilling intersected 4.0 g/t Au over 6.8 m including 24.8 g/t Au over 0.5 m; all of which is included within a 13.5 m interval grading 2.6 g/t Au.

• In the 5B4 Gold Zone, drilling intersected 2.0 g/t Au over 15.6 m including 5.8 g/t Au over 1.5 m.

• In the 2 Gold Structure, drilling intersected 17.4 g/t Au over 1.0 m.

They need to be seen in the wider context of Cartier’s drive towards proving up the viability of new mining at Chimo. The gold deposits revealed by Cartier’s drilling will add ounces to the next revision of the 43-101. Perhaps enough to push the resource estimate close to or over 3 million ounces. But it you look at the Composite Section at the top of this article you can see that the area drilled is, at most, a couple of hundred meters away from the existing shaft.

There are more drill results coming and I hope to speak with Cloutier for motherlodetv.net after the next press release.

The market has not been kind to junior explorers and ECR.V is no exception, down from its high of just over $0.30 in April 2021 to $0.105 as I write. But the actual value of the Chimo asset has been steadily increasing.

The exit on these shares will likely come when the Chimo Mine is sold to a larger company prepared to dewater the shaft and commence mining. There are a number of mills within trucking distance of the mine. Cartier has run samples through ore sorters and is confident that it can upgrade run of mine material to reduce transportation costs significantly.

Cartier has 5 million dollars in its treasury at the moment which is a critical consideration in the exploration/waiting game. Adding ounces costs money.

I am certainly looking to average down the cost of my shares given the very low Cartier price. As an entry point, I suspect anything under $0.15 is going to look very attractive in a few months or a year. Current market cap is 33 million dollars. Ignoring Cartier’s other, highly prospective, properties if Cloutier can get the Chimo resource to 3 million ounces, that implies around a $10 an ounce value for the resources in the ground.

My pal Mickey Fulp (The Mercenary Geologist) wrote what I consider to be the best article on the value of gold ounces in the ground back in 2015. You really should go and read the article yourself; but here’s the take away. An ounce of gold in the ground is worth way more than $10 when it is finally acquired. $25-40 is a lowball estimate. With an actual shaft and tunnels in place, the value of the Chimo ounces should begin at the high end of that range.

[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment on my overall portfolio. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.

I currently own shares in Cartier Resources which I intend to hold but which I may sell at any time.]