Renforth: Drilling Fish in a Barrel

As the world’s banking system teeters on the edge of the abyss I was delighted to be diverted by Nicole Brewster’s always interesting newsletter. Nicole is the CEO of Reforth Resources and she is about to begin drilling 4 kilometers away from where they successfully drilled last season.

Renforth’s Surimeau nickel polymetalic property is just that big. Renforth thinks that the mineralized structure extends over 20 kilometers. Nicole is pretty confident.

I should tell you that the area within the 4km step out has also been surface sampled, as well as drilled historically, with positive results. So I am feeling pretty good about this drill program, as I said, drilling fish in a barrel, not a lot of risk, relative to my world anyway. Should be interesting, stay tuned.

For many explorers, a 400 meter step out is a huge risk. Geology is often about tucks and folds and faults. Sometimes, however, a geological structure just continues for kilometres which is what Nicole is betting on at Surimeau.

Exploration covers a variety of activities from pure prospecting all the way to drilling “fences” of closely spaced holes to get a higher resolution resource definition. What Renforth is doing at Surimeau is confirming the outlines of what it believes is a very large potential resource.

The initial value of a property like Surimeau depends on that outline. If this season’s 4km step out is successful, if what Nicole is pretty sure is there is confirmed with a drill, those results may well attract the attention of a larger mining company. Nicole believes that Surimeau has the hallmarks of a world-class asset located in Quebec which is an excellent mining jurisdiction. If she is right, Renforth will be rerated once the markets sober up. Which may take a while.

I have held RFR.CNX for several years and sold enough when it rocketed to $0.10 that my current position is all house money. The shares are trading at $0.035 as I write so this really is a potentially attractive entry point. The company has cash in the bank, which in these choppy times, is an absolute essential.

I wrote in more detail about Renforth a few weeks ago.

I expect there is going to be a fair measure of chaos and panic in the next couple of weeks. In many ways, it is reassuring to know that Nicole and her team are out in the bush drilling what will almost certainly be a significant nickel resource even as the pillars of international finance wobble.

[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO. Nicole is fun on the phone. She wants you to call: 416-818-1393

I currently hold shares in RFR.C and while I have no plans to sell anytime soon I reserve the right to take profits as they arise.]