Could This Be Canada’s Next Big Discovery?
I am about to introduce one of the greatest remaining assets in the world.
You’re going to be shocked that you haven’t heard of this one before.
But I must warn you that this is very time sensitive information.
Before I do that, let’s first talk about why ANY company is worth our investment dollars.
No matter what sector, there are three main reasons why we invest in companies:
- Growth – Growing fast enough to become disruptive
- Disruptive Merits – Making enough noise that someone bigger needs to buy you
- Revenue – Making money
However, investors often make the mistake of investing for the wrong reasons. This is particularly true for junior mining stocks.
Many invest because they believe a company will soon become a producer; yet, they forget that the path to production (revenue) can often be many years away, filled with hiccups, dilution, and sometimes bankruptcy.
Unless a company is generating profits, investors should expect lots of dilution along the way. With dilution comes risk.
But what if there was a company that was able to show both growth and incredible disruptive tendencies, without having to spend a fortune?
What if there was a company that could soon make so much noise that the big boys have to listen?
And what if this Company controls 70% of one of the world’s most prolific mining camps?
There are no if’s. There is such a company and I am about to introduce you to it.
- Has the results of over three million metres of historic drilling completed on its exploration and mined areas – that’s equal to a cost of over $300 million worth of drilling in today’s dollars (three million metres at, say about $100/m);
- 55 kilometres of underground exploration workings and shafts (40+ mine levels and 5 shafts), which could cost as much as $150 million if someone wanted to develop them from scratch (would require dewatering and refurbishing);
- The prospects to build ounces of gold to its portfolio at a relatively inexpensive cost;
- Owns 70% of one of the world’s prolific mining camps;
- Is just a short distance away from many of the world’ biggest mines and deposits;
- Is cashed up with nearly $6.0 million of working capital
- Proximal to significant infrastructure, including a smelter and mills, and a mining community just a stones throw away
Here’s the kicker: This Company has a market cap of less than $50 million.
But its valuation could change in a very short time.
That’s because anytime now, this Company will announce something that could completely transform the lives of many.
More on this in a bit.
Gold to Outperform
Gold didn’t do well in 2013, and neither did gold stocks. That’s why I didn’t invest in any of them last year.
But this year may be different.
Just this week, the World Gold Council announced that physical gold demand continued to climb in 2013:
- Gold jewellery demand grew 17% in 2013, returning to pre-crisis levels: Jewellery demand saw the largest volume increase since 1997 as consumers across the globe responded in force to lower gold prices. This reaction led to full year demand of 2,209t, up 17% on 2012 levels.
- Bar and coin demand was a record 1,654.1t in 2013; contrasting ETF redemptions
- Central bank continued its fourth consecutive year of net purchases, adding another 369t to reserves (who knows how much China has really added?)
These recent numbers prove that despite the extreme prejudice the media (and bankers) inflicted upon gold last year, gold demand continues to climb.
Gold has already climbed over the last month and gold stocks have led the push. We’re also seeing a resurgence of M&A activity with Goldcorp’s headline takeover attempt of Osisko.
While demand for gold is climbing, supply is falling.
According to the World Gold Council, annual gold supply fell 2%, as recycling decline outweighed production growth.
But supplies may be at risk of experiencing a severe shock if gold prices don’t perk up; many producers have already scaled back or stopped production completely due to a lower gold price.
The combination of supply and demand fundamentals and financial uncertainty in world markets may be creating the perfect storm for gold stocks.
But not all gold stocks have what it takes to survive in an environment where competition for investment dollars runs sky high.
That is why it is extremely important to find gold producers who are profitable, or non-producers who can make a lot of noise.
While profitable producers will climb alongside the price of gold, its the juniors stocks that have the ability to become multi-bagger stocks.
That is why I am introducing you to a Company with a truly remarkable opportunity.
Falco Pacific Resource Group Inc.
(TSX VENTURE: FPC)
Falco Pacific Resource Group Inc. (Falco) is on the verge of changing itself forever.
Anytime now, its going to announce something that’s going to make a lot of noise in the industry.
Before I tell you what that is, its important to understand Falco’s story. Once you understand it, you’ll know why every one will soon be watching this Company.
The Largest Land Package in One of World’s the Best Gold Mining Jurisdictions
Falco Pacific Resource Group Inc. (TSX.V: FPC) owns 100% of 728 square kilometres within the historic Rouyn-Noranda Mining Camp, making it one of the largest claimowner in the Southern Abitibi Greenstone Belt.
The Rouyn-Noranda Camp has over 30 current and former gold and base metal mines, and has produced over 19 M oz. of historic gold production – yet it is still largely under-explored.
That’s because outside the Witwatersrand Basin in South Africa, no other area on Earth has produced more gold than the Abitibi Greenstone Belt of Quebec and Ontario, Canada.
The belt has been home to more than 100 mines producing over 180 million ounces of gold, including some of the world’s most famous deposits in the prolific regions of Timmins, Kirkland Lake, Rouyn-Noranda, Val-d’Or, and Bousquet..
It’s no wonder that new exploration tools, new geological understanding and new investment capital is starting to produce even greater results in this prolific area.
Just how have modern methods redefined the area?
Over the past years a number of major gold discoveries in the Abitibi have been made using modern methods, which have translated to hundreds of millions of dollars in profits for investors; these include discoveries from Osisko Mining, Detour Gold, Lake Shore Gold, and Virginia Gold.
The resurgence of discoveries and efficiency in mechanized mining using modern methods has reignited the entire jurisdiction.
This is what makes Falco’s opportunity so special.
A Rediscovery Opportunity
No modern method of exploration has ever been attempted in and around Falco’s former producing assets. As a matter of fact, much of the gold produced on its flagship asset was a by-product of mining other metals.
For a camp that has produced over 19M ounces of gold, that’s insane.
Imagine what modern methods of discovery could uncover for an asset that has produced millions of ounces of gold, yet has never truly been explored for gold?
Imagine what that could mean for Falco and its shareholders?
Before we jump into blue-sky potential, let’s first ground ourselves and ask:
“What can a small junior do with such a vast land package? Surely it will have to spend millions just to find out where to start looking? Once it finds a target, it will have to spend millions upon millions of dollars drilling to find out what’s there!”
There are a lot of juniors with great assets, but the cost of discovery is often what destroys most of them.
But what if I told you that Falco doesn’t have to spend millions upon millions of dollars drilling to find a discovery?
What if I told you that in order to replicate today, what’s already been done on Falco’s assets, it could cost you over $450 million?
Something Very Special
Falco has something that no other junior has. This is what makes Falco such a grande opportunity.
Falco has a database that consists of results of over 3 million metres of drilling, and over 55 km of underground workings and shafts.
If you were to replicate that amount of drilling and implement that amount of underground development today, you’d likely be spending more than $450 million; $300 million for drilling of exploration and mined areas, and over $150 million dollars for the underground exploration workings and shafts (would require dewatering and refurbishing).
All of this belongs to a Company with a market cap of less than $50 million.
Now the first question that comes to mind is, “How accurate is this data?”
Let me answer that by telling the Falco story. Believe me, it’s worth reading.
80 Years in the Making
In 1917, a copper discovery paved way to the creation of Rouyn-Noranda, a small city on the shores of Lake Osisko in northwestern Quebec.
The discovery led to the construction of the Horne Mine in 1926 and catapulted Quebec as a global mining powerhouse. It also transformed Noranda into a global copper powerhouse, historically producing 54 million tons of copper at 2.2% at its Horne Mine over the next 50 years, making it one of the richest VMS mines in Canada.
Along with its copper production, the Horne also historically produced a whopping 11 million ounces of gold at an average grade of 6.1 g/t.
Despite the incredible gold production, gold was never a focus for Noranda’s copper mindset as gold traded in a very thin range of $35 over several decades. As a result, very little gold exploration had been done – despite having produced such high grades.
It wasn’t until the Horne mine shutdown in 1976 that gold prices began to skyrocket.
Call it bad timing, but the Horne had never been explored or mined again of any significance. It’s a shame since the Horne Mine Complex area historically produced an astounding 14 million ounces of gold, millions of ounces of silver, and billions of pounds of copper and zinc, all in a small 1.5 km diameter
But that “shame” is now Falco’s amazing opportunity.
In the summer of 2012, Falco raised money and won a bid to acquire the rights to the Horne Mine Complex (and the massive Rouyn Noranda land package).
This marked the only time that anyone, other than Noranda, would explore actively as an operator, the mighty Horne Mine.
The goal was to raise money and begin drilling in and around the Horne, given its prolific, yet under appreciated, history of gold production.
But 2012 was not a good year for juniors and raising money to drill blindly would’ve been a very bad idea.
Falco was stuck; it had an incredible land package, yet very little money to drill it. Putting in a few drill holes would have done little to nothing for its share price.
After months of deliberation, the management team decided to conserve cash. Instead of drilling it would take the time to review the data it had received with the acquisition of its mineral rights.
Unbeknownst to management, this decision would change their fate forever.
A World of Data
Buried underground in a fireproof data vault at the original Noranda/Glencore mine site were boxes stacked to the ceiling full of drill logs, production records, and underground level plans from Noranda’s 50 years of exploration and mine work.
The data – which included 14 past producers plus hundreds of thousands of metres of drill core – a lot of it not even sampled – sat untouched ever since the mine shut down in the late 1970′s; it was vast and precise, yet none of the data around the historic producers had ever been digitized.
The opportunity to own 70% of a camp that has historically produced over 19m ounces of gold, yet has been under-explored for gold, is incredible.
But with so much data, Falco’s management needed a focus .
Through their research, they stumbled upon a document that outlined the Horne 5 zone – just a stones throw away from the Horne mine itself.
About 54 million tonnes were historically mined in the Upper and Lower H of the Horne Mine as part of the Horne Mine Complex, which was essentially the birth of Noranda in this part of Quebec.
Remarkably, Noranda left the Horne 5 zone untouched – despite chasing it down to a depth of 2.3 km.
When Noranda did an estimate on the exploration work completed on the Horne 5 zone from the 1930′s to the 1970′s, it had documented a historic resource of 167.83Mt @ 1.25 g/t Gold, 17.14 g/t Silver, 0.10% Copper and 0.57% Zinc.
But what was really interesting is that Noranda itself had recorded some internal higher-grade shoots, with decent grades of both gold and silver. According to Noranda’s historical records, within the Noranda historic resource was a historic higher grade resource of 1.79 Mt grading 6.14 g/t gold, 16.80 g/t silver, 0.49% copper and 0.37% zinc*.
Within the data, were very strong historic intersections of 70m @ 6.51 g/t Au, 54.68 g/t Ag, 0.50% Cu and 0.25% Zn and historic Intersection of 121m @ 4.39 g/t Au, 43.24 g/t Ag, 0.19% Cu and 0.83% Zn
As I had mentioned, the Horne mine produced gold at an average 6.1 g/t – as a by-product!
It’s amazing that this previous discovery of the Horne 5 zone had been forgotten.
Furthermore, the whole thing is open to depth.
But the opportunity doesn’t stop there.
While Noranda was exploring Horne 5, it constructed around 55 km of underground exploration infrastructure (over 40 working levels and 5 shafts) that could cost more than $150 million if you wanted to replicate that amount of work today (would require dewatering and refurbishing). Take a look:
Historical mining records show that Noranda was mining in 1925 extremely high grades in the shallower parts of the “Upper H” ore body; some at 6.7% copper and an incredible 5.54 ounces per tonne gold.
Given that gold prices didn’t take off until after the mine had shut down, I would suspect that Noranda simply focused on other assets. They probably weren’t too concerned with finding the lower grade margins of Horne and exploiting those, and left the deeper parts of the ore body alone.
But today things are completely different.
Gold prices are much higher, and mining 5 ounces per tonne gold just really doesn’t exist anymore. I am sure any one today would want to explore what Noranda didn’t want to many decades ago.
Falco has now digitized all of the data from Noranda’s Horne 5 deposit, creating a new world of exploration re-discovery.
Over the past decade, massive deposits in the Abitibi Greenstone Belt have been found using modern methods, making millions of dollars for investors.
With the Horne 5 data now in digital format, Falco is able to look at how its geology was formed and what potential lies within its boundaries.
For the first time ever, a 3D geology and resource model for the Horne System has been created.
This has never been done before.
Falco has been able to create some metal zonation diagrams based off of the data from the vaults – no one has ever demonstrated this before at the Horne deposit, let alone Horne 5.
The data is already showing enormous exploration potential, with incredible promise of a much bigger system.
But how do you put a value on an asset with so much infrastructure and exploration potential, yet no resource?
Anytime now, Falco is about to announce its first maiden NI 43-101 resource.
And if its anything of size, I bet the majors will be watching.
Falco’s Initial Resource
The first part in the creation of a maiden resource at Horne 5 was to validate the data from Noranda – to be sure that the data was real and accurate.
After spending great efforts, it turns out that data from Noranda is even better than some of the data that management was currently seeing in newer drill programs today.
Back then, Noranda didn’t have the ability to plug in 3D models, or use new technology to understand their resource. They had to drill aggressively in order to confirm and evaluate their findings.
As a result, Noranda drilled at a very tight 15-metre spacing throughout the entire resource model that Falco is currently working on. With that, Falco was able to create a complete model, giving them complete coverage of the entire Horne 5 deposit.
In Falco’s forthcoming maiden NI 43-101 resource estimate, Falco will be using 4,386 of the 11,000 drill holes; this is equal to over 300,000 metres of historic drilling, and 150,000 drill core assays.
Here’s what the drill holes look like as part of this work:
Valuing Falco’s Worth
How do you value a Company with such a vast land and infrastructure package, yet has no resource or economic study?
Less than 35 km away is Agnico Eagle’s ($6.6 billion market cap) flagship mine, the LaRonde mine – home to the 2.2-kilometre-deep Penna Shaft, believed to be the deepest single-lift shaft in the Western Hemisphere.
LaRonde vs. Horne Mine Complex
LaRonde is currently operating and has produced historically almost 4.3 million ounces of gold as well as valuable by-products.
The Horne Mine Complex historically produced approximately 14 million ounces of gold and it too produced additional valuable by-products.
The LaRonde mine still has 4.2 million ounces of gold in proven and probable reserves* (29 million tonnes grading 4.5 grams of gold per tonne) and is expected to produce 177,000 ounces of gold in 2013 and average about 232,000 ounces of gold annually from 2014 through 2015 (as per guidance from Agnico Eagle).
As you begin to compare them at depth, you notice the geology between the Horne 5 zone and LaRonde have similarities; both are gold-rich volcanogenic massive sulfide (VMS) systems, both have mineralized zones that are vertical in nature, and both are comprised of similar metals.
Since LaRonde’s exploration program at depth is much more advanced than Horne 5, it would be unfair to compare them directly. But we can look at LaRonde and see how Agnico Eagle advanced their exploration program from relatively shallow depths in the 1990′s to now where they are exploring and expanding the deposit down to 3500 metres!
Noranda’s historic exploration program expanded the Horne 5 zone below 2300 metres and still remains open at depth.
*Horne 5 has not been evaluated as a production scenario by Falco.
When Falco plotted the historical details into digital form, they were able to create numerous block models, as shown below in the metal zonations diagram for Gold, Copper, Zinc:
While it is far too early to say that Horne 5 could be as big as LaRonde, the similarities between the two, and knowing Horne 5 is open at depth, proves that there is major upside potential at Horne 5.
It’s no wonder Falco has brought a gentlemen by the name of Paul-Henri Girard out of semi-retirement to help with Horne 5.
Paul-Henri Girard was instrumental in the development of LaRonde.
Mr. Girard was most recently Vice-President of Canadian Operations for Agnico Eagle Mines Limited before he retired. During his 25 years at Agnico, Mr. Girard was instrumental in the development of its flagship LaRonde mine and in the advancement of the Goldex and Lapa mines in Quebec.
He was an integral part of a successful senior management team that oversaw the growth of Agnico from 400 employees to over 4,000 at the time of his retirement.
But Falco has somehow convinced him to come out of semi-retirement to help review and analyze all of the technical information and infrastructure requirements, as well as develop a next step strategy for Horne 5.
If he’s in, so am I.
Barely Scratching the Surface
While gold majors are relinquishing assets all over the world, they continue to mop up assets in the Abitibi Greenstone Belt.
Just recently, Goldcorp announced a hostile attempt at Osisko. Osisko owns and operates the Canadian Malartic Gold Mine located 80 kilometres east of Falco’s Rouyn-Noranda Project and is also the owner of the pre-production Upper Beaver gold-copper deposit located 60 kilometres west of Falco’s Rouyn-Noranda Project.
As you may recall, the Upper Beaver was originally discovered by Queenston Mining, but became part of Osisko when it was acquired for $550 million.
Here’s a brief comparable of Falco and Queenston:
Size of District Controlled
- Queenston – 200 sq. km
- Falco – 728 sq. km
Historic Gold Production of Camp
- Kirkland Lake (Queenston)- 40m oz.
- Rouyn Noranda (Falco)- 19m oz.
Exploration for Gold in Camp
- Kirkland Lake (Primarily explored for gold for over 86 years)
- Rouyn Noranda (Primarily explored for base metals for over 80 years even though produced over 19m oz. of gold as a by-product. Only over the last 5 years has there been more of a focus on gold as the primary mineral).
- Queenston (Upper Beaver) 1.461m oz. Au Indicated (6.87Mt @ 6.62 g/t Au and .37% Cu) plus 712k oz. inferred (4.57Mt @ 4.85 g/t Au and 0.32% Cu) – NR Sept 26/2012
- Falco (Horne 5) – TBD on forthcoming NI-43-101 Resource Estimate
- Queenston – 2.1m oz. Au Indicated (13Mt @ 5 g/t Au) plus 1.9m oz. Au inferred (13Mt @ 4.5 g/t Au)
- Falco – TBD beginning with the Horne 5 Deposit
Major Geological Structure
- Queenston (tracing the north side of the Larder Lake/Cadillac Break)
- Falco (tracing the north side of Larder Lake/Cadillac Break and the south side of the Porcupine Break)
By the way, Osisko owns 11.4% of Falco.
While I believe that LaRonde may be a better comparable in terms of structure and geology, it will be interesting to see the value comparison between Queenston and Falco once Falco announces its first NI 43-101 resource estimate.
The exciting part is that we have no idea what the numbers will be.
Could it be 200,000 ounces? 500,000 ounces? A million ounces? More?
Risk vs. Reward
Nothing is without risk and Falco is no exception.
At this early stage, we have no idea what Falco’s forthcoming maiden NI 43-101 resource estimate will be. Even if the estimate is good, we have no idea if it will be lead to further development.
However, being located within one of the top mining jurisdictions and a local area that has established infrastructure and a depth of mining professionals, establishes a strong foundation for Falco Pacific.
Scale matters in the mining industry and Falco Pacific has the makings of the largest partially developed gold deposit in the region with 55 kilometres of underground exploration workings, a mining community less than a few hundred metres away and millions of ounces that have been produced at high grades in the immediate area.
Financings for Falco have all been done at a lower price than where Falco trades today; at the same time, they’re about to be a completely different company.
What if Falco’s initial resource comes up short? What if the real potential at Horne has already been exploited?
While I doubt that is the case, it is very important for any company to have a few backstops.
And Falco has plenty.
Backstops – 12 Past Producers and More
Falco has a massive land package that’s home to another 12 historic producing mines outside of the Horne and Horne 5. Here are just a few:
- Quemont: 13.9 Mt @ 5.38 g/t gold, 30.9 g/t silver, 1.31% copper, 2.43% zinc;
- Horne Remnor: 0.6 Mt @ 5.8 g/t gold;
- Joliet: 2.1 Mt @ 1% copper;
- Chadbourne: 1.7 Mt @ 3.24 g/t gold, 1.2 g/t silver;
- Quesabe: 89 kt @ 10.7 g/t Gold;
- Ansil: 1.6 Mt @ 2.2 g/t Gold, 26.3 g/t Silver, 7.07% Copper and 1.77% Zinc.
The list of promising assets gives a massive backstop for Falco to make new discoveries in an already-proven and gold-rich area. I don’t believe Falco will have to rely on its backstops, but the fact that they are there gives Falco great opportunity to divest.
Falco could sell, JV, or explore on any of their backstops to further increase interest in its shares.
Sum and Substance
With the recent Osisko hostile bid by Goldcorp, the Abitibi is once again the spotlight of takeovers and buyouts. I doubt this trend will stop.
The real opportunity in Falco is the mystery surrounding its first maiden NI 43-101 resource. No one knows what it will be.
But we do know it’s coming at anytime now.
If its of size and scale with decent grade, I would bet the majors will get very interested; if its less, Falco will have a lot more work to do.
Regardless, the Abitibi is a breeding ground for takeovers and every major wants to control the area. Falco owns one of the largest land positions in the Southern Abibiti Greenstone Belt.
Why wouldn’t a major want to own what Falco has if they can buy it for cheap?
Not many people know about Falco now, but the Company is about to sound its horn.
And I bet every one in the mining community will hear it
Falco Pacific Resource Group Inc.
Until next time,
The Equedia Letter
Falco Pacific (TSX.V: FPC) Investment Highlights
- 100% owner of 728 Sq. km in the Rouyn-Noranda Camp, a camp that is home to over 30 current and former gold and base metal mines producing 19M oz. gold
- 14 former producing mines within land holdings
- Assets located in one of the best jurisdictions in the world
- Established infrastructure
- One of the lowest costs of exploration in the world, with provincial exploration credits
- Extensive data archives containing the results of over 3 million metres of historic drilling
- 55km of underground exploration workings at its Horne 5 asset
- Incredible blue sky potential
- Upcoming catalyst: first maiden NI 43-101 resource announcement
The Falco Pacific Team
Kelly Klatik (MBA) Position: President, CEO & Director
As a co-founder of Falco Pacific, Mr. Klatik has been President and Chief Executive Officer since 2010. He brings over 20 years of experience in operating, mergers and acquisitions, financing, structuring, and financial engineering of public and private enterprises and investment funds specializing in the resource sector.He was former head of Capital Markets for a subsidiary of Montreal based Power Financial Corporation and most recently former Director, Investment Banking for Toronto-based Investment Dealer M|Partners
Dr. Michael Byron (B.Sc., M.Sc., PH.D. & P. Geo.): Position: V.P. Exploration, Director
As a co-founder of Falco Pacific, Dr. Byron was appointed Vice President of Exploration for Falco Pacific in September 2012 and brings over 26 years of domestic and international experience in research, field work, and senior management in gold, base metal, magmatic nickel and PGE, REE’s and uranium, diamond, and gemstone exploration, spanning employment within the mineral exploration industry, government and educational institutions. He was former V.P. Exploration for Lake Shore Gold and Auora Platinum, and was instrumental in advancing both companies through to resource milestones and the sale of Aurora to FNX Mining.
Paul-Henri Girard (Eng.) Position: Senior Mining Advisor
Mr. Girard was most recently Vice-President of Canadian Operations for Agnico Eagle Mines Limited. During his 25 years at Agnico, Mr. Girard was instrumental in the development of its flagship LaRonde mine and in the advancement of the Goldex and Lapa mines in Quebec. Mr. Girard was an integral part of a successful senior management team that oversaw the growth of Agnico from 400 employees to over 4,000 at the time of his retirement. Mr. Girard’s directive includes the review and analysis of all technical information and infrastructure requirements and helping develop a next step strategy for the Horne 5 Deposit.
Stéphane Poitras ( B.Sc. Geo.) Position: Senior Project Geologist
Stéphane Poitras, has a B. Sc. in geology from Laval University in Quebec, and began his career in the resource sector as a geologist and consultant for several junior mining companies. Prior to joining Falco Pacific, he was a project geologist for QMX Gold Corporation (formerly, Alexis Minerals). From 2007 to 2010 Mr. Poitras worked as a research agent for the Research Unit and Service in Mineral Technology at the University of Quebec. Previous to that he was a project geologist for SOQUEM.
Jim Davidson (B.Comm & C.A.) Position: CFO, Director
Over 30 years experience starting with Deloite and Touche. Mr. Davidson is a co-founder and has been CFO of Falco Pacific since 2010. He is former CFO of Athabasca Potash which was acquired by BHP Billiton. He also held a number of senior project accounting positions with Weyerhaeuser Company in the U.S and Canada.
Dean Linden Position: Corporate Development
Brings 16 years of corporate development and public market expertise. Spent 8 years with ID Biomedical which was sold to GlaxoSmithKline for $1.7 Billion.
Darin Wagner (B.Sc., M.Sc., P. Geo.) Position: Chairman
As a co-founder of Falco Pacific, Mr. Wagner is a former President and CEO of West Timmins which sold to Lake Share Gold for $424 million in 2009. Mr. Wagner worked globally for Cominco (now Teck Cominco) as an Exploration Geologist and served as an Exploration Manager for Platinum Group Metals in South Africa. He is currently President and CEO of Balmoral Resources.
Gordon Neal (B.Sc.) Position: Director
As a co-founder of Falco Pacific, Mr. Neal was formerly a founder of Neal McInerny Investor Relations growing to the second largest IR firm in Canada.
Dr. Jim Franklin is an exploration geologist with over 40 years experience, focusing on discovering base metal, uranium, and gold-bearing ore deposits. He is a graduate of Carleton University (BSc, MSc) and the University of Western Ontario (PhD). Jim taught at Lakehead University (1969 – 1975), prior to joining the Geological Survey of Canada, where he directed major research programs on base metal and gold deposits in the Canadian Shield, and coordinated the GSC’s marine minerals program, culminating in the discovery of a major deposit at Middle Valley on Canada’s Juan de Fuca Ridge. As Chief Geoscientist of the GSC from 1993 until 1998, he was responsible for coordinating GSC’s entire scientific program. He consults world-wide on base and precious metal exploration programs. Presently he sits on advisory or management boards for the Canadian Scientific Submersible Facility, the Canadian Mining Innovation Council, The Mining Industry Human Resources Council, and NRCan’s Earth Science and Minerals and Metals sectors advisory boards.
Dr. Harold Gibson is Director of the Mineral Exploration Research (MERC) and Professor of Volcanology and Ore Deposits at Laurentian University, Sudbury. Dr. Gibson joined Laurentian University in 1990, after leaving a successful 12-year career in the mining exploration industry, where he worked with Falconbridge Copper, Minnova, and Falconbridge Ltd. Dr. Gibson and his students have conducted research across Canada and in Brazil, Ecuador, Peru, Mexico, Morocco, Oman, Turkey and on the modern seafloor. His field based research focuses on volcanogenic massive sulphide (VMS) and epithermal ore systems. Current areas of research include the Paleoproterozoic Flin Flon and Snow Lake VMS districts, Northern Manitoba and Saskatchewan, the Archean Noranda VMS District and Abitibi Greenstone Belt of Ontario and Quebec, the Lau Basin and Tonga/Aeolian arcs, and VMS and epithermal precious metal deposits of the Mexican Silver Belt. Dr. Gibson provides consulting services to Canadian and international mining companies and governments.
Dr. Howard Poulsen is an economic geologist who specializes in structural aspects of exploration for ore deposits. He has more than 40 years experience in geological research and mineral exploration at both national and international levels and has authored or co-authored approximately 60 journal papers and reports during that period. He has refereed numerous manuscripts for scientific journals and served as an associate editor for Economic Geology from 1993 to 1998. He has provided technical advice to: U.S.G.S. (Conterminous United States Mineral Appraisal Program); U.S.S.R. Institute of Geology and Applied Mineralogy (gold metallogeny); Shenyang Institute P.R.C. (gold deposits research); BGR (gold deposit research in Africa); UNESCO (Ore Deposit Modeling project in the Carpathian Arc). His most recent consulting work for major and junior companies has been conducted mainly on gold deposits in the Canadian Shield (Ontario and Quebec), Eastern Africa, Western Australia and in the North American Cordillera (Honduras, Mexico, California, Nevada, British Columbia, Yukon and Alaska).
Poulsen’s research in the Archean Superior Province and Early Proterozoic Trans-Hudson Orogen has centered on the relationships of ore deposits with respect to the tectonic history of their host granite-greenstone terranes. His work at Sturgeon Lake with J.M Franklin from 1972 through 1980 helped define the shallow-water “Mattabi-type” massive sulphide deposits in distinction to the more common “Noranda-type”. His research on the structural geology of ore deposits has concentrated on volcanogenic massive sulphides, shear zone-hosted gold deposits and Carlin-type gold deposits. His pioneering work and integration of many of his structural case-history studies of gold and base metal deposits into numerous summary articles and oral presentations present a practical application for mineral exploration.
Horne West Zone and Horne Remnor Zone
- Horne West (100% interest) acquired as part of an underlying agreement with Xstrata as a Controlled Property.
- Project Type – Brownfield
- Location – Rouyn Township – 1.5 km west of the Horne mine.
- Target Minerals – Gold-Zinc
- Historic gold resource with excellent expansion opportunities laterally and to depth.
- Located at the base of the stratigraphic sequence hosting the Horne Mine.
- Composed of two zones – West Zone and New Zone.
- Significant historic intersections as seen in the table below which include 9.58 g/t Gold over 10.67 m (core length) and 5.49 g/t Gold over 20.63 m (core length).
Gold is related to sulphide stringers and disseminations associated with quartz, chlorite and sericite alteration.
- Next Steps -compile and analyse the historic data leading to an initial drill program to test the depth and strike extent of the mineralization.
Horne Remnor Zone
Horne Remnor Zone is part of the Horne mine infrastructure and acquired as part of an underlying agreement with Xstrata as a Controlled Property.
- Historic gold production from 1986-1989 as flux ore from the upper levels of the Horne mine.
- The zone is at minimum 150m thick.
- Prior production of 604kt grading 5.8g/t Au.
The Remnor zone is part of the G-orebody. Nearly all of the ore associated with the G hydrothermal system came from gold rich pyrite-sericite veins and phreatic pebble breccia dikes in the underlying alteration pipe.
- Next Steps -compile and analyse the historic data to model historic mine.
The Company advises that the production, tonnage and grades listed above are historical in nature and have not been verified. The category of historical resource does not conform to current CIM definitions. The historical estimates are not supported by a technical report. A qualified person has not done sufficient work necessary to classify the historical estimates as a current mineral resource or mineral reserves. The Company is not treating the historical estimates as current mineral resources and the historical estimate should not be relied upon. The Remnor Zone is classified as a Controlled Property in which the Company has an economic interest below 200 meters.
Falco Pacific’s Flavrian District is anchored by the Quesabe Gold Mine on the edges of the Flavrian intrusion which was the heat source for the entire Noranda camp. Quesabe is a former Cambior mine in which mineralization is related to the Quesabe fault which runs SW to NE. The Flavrian District has seen primarily shallow drilling given most mines in the area have been at shallow depth following Quartz veins.
- Quesabe Gold Mine (100% Interest) acquired as part of an underlying agreement with Cambior.
- Project Type – Brownfield
- Location -Duprat township – west of the Central Rouyn-Noranda camp
- Target Minerals – Copper-Gold
- Well know gold mineralized area host to two former producers (Quesabe and Beauchemin mines)
- Historic production of Quesabe mine was 89 kt @ 10.7 g/t Gold1.
- Quesabe mine historic resource is 450 kt @ 7.0 g/t Gold2 (100,000 oz Gold). No assessment of the potential for profitable extraction of the above tonnage and grade has been made. Future programs under consideration will focus on validating the tonnage and grade identified.
- Former Silidor mine (ex Cambior) which is located within the same structural domain on an adjacent property, previously produced 2.9Mt @ 5.1g/t gold3.
- Beauchemin mine (Cambior), which lies to the north of the Quesabe mine on an adjacent property, produced 1.7 Mt @ 4.82 g/t Gold4 until 1993.
- Elder mine (ex Elder Mines), which lies to the east of the Quesabe mine on an adjacent property, produced 2.02 Mt @ 5.33 g/t Gold.
Gold deposits associated with the Flavrian intrusion are fault zone and shear zone related. Hydrothermal alteration is prevalent.
- Copper-gold mineralization (IOCG) related to the St. Jude Breccia, west of the Flavrian intrusive.
- Historic Drilling – 285 diamond drill holes (including 80 underground holes) and over 7,000 assays.
- Next Steps – Compile and analyze the historic data leading to an initial drill program to test the depth and strike extent of the mineralization.
- Pearson, V. 2007, Coefficient de geometrie favorable, rapport, due projet, Consorem 2003-04, 86p.
- Cambior Report, Belzile, 1995
- “Visible Gold Mines acquired 100% of the Silidor Gold Mine project from IAMGOLD and Newmont Mining and announces appointment of Director”, News Release, Visible Gold Mines Inc., March 8, 2010
- Pearson, V. 2007, Coefficient de geometrie favorable, rapport, due projet, Consorem 2003-04, 86p.
The Company advises that the production, tonnage and grades listed above are historical in nature and have not been verified. The category of historical resource does not conform to current CIM definitions. The historical estimates are not supported by a technical report. A qualified person has not done sufficient work necessary to classify the historical estimates as a current mineral resource or mineral reserves. The Company is not treating the historical estimates as current mineral resources and the historical estimate should not be relied upon. Certain information refers to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company’s properties.
The Central Camp is host to 9 former producers and brownfield discoveries.
The majority of these mines were shut down in a period where commodity prices were significantly lower and extraction and recovery techniques were not as advanced as today. Falco Pacific has an opportunity to examine these former producer and determine if there exists the opportunity to realized an exploitable resource.
Prices used for the Gold Equivalent calculation were as follows:
Zinc – $0.91 per lb
Gold – $1,656 per oz
Copper – $3.65 per lb
Silver – $29 per oz
The Company advises that the production, tonnage and grades listed above are historical in nature and have not been verified. The historical estimates are not supported by a technical report. Certain properties are classified as Controlled Properties in which the Company has an economic interest below 200 meters.
Central Camp – West Ansil
West Ansil Project is a 50/50 JV with Xstrata and discovered by Falconbridge Ltd. in 2006 gOcad(c) generated target.
- Historical Resource classified as indicated of 0.53 Mt @ 3.4% Copper, 0.4% Zinc, 1.4 g/t Gold, 9.2 g/t Silver and inferred: 0.60 Mt @ 3.3% Copper, 0.2% Zinc, 0.30 g/t Gold, 5.9 g/t Silver1. No assessment of the potential for profitable extraction of the above tonnage and grade has been made. Future programs under consideration will focus on validating the tonnage and grade identified.
- Ansil Mine which is an adjacent property owned 100% by Falco Pacific, produced from 1989 to 1993 a total of 1.6 Mt @ 2.2 g/t Gold, 26.3 g/t Silver, 7.07% Copper and 1.77% Zinc.
The West Ansil deposit is located within the Rusty Ridge Formation at the contact between the Rusty Ridge Andesite and Amulet Dacite. It is comprised of seven (7) separate zones of massive sulphides and/or copper-magnetite stringer zones at the junction of 2 synvolcanic faults on the Corbet Exhalite
Next Steps – continue to analyze and compile the historic data and determine an initial drill program to test the depth and strike of the mineralization.
1 Technical Report, Alexis/Falconbridge April 2006, Table
The Company advises that the production, tonnage and grades listed above are historical in nature and have not been verified. The category of historical resource does not conform to current CIM definitions. The historical estimates are not supported by a technical report. A qualified person has not done sufficient work necessary to classify the historical estimates as a current mineral resource or mineral reserves. The Company is not treating the historical estimates as current mineral resources and the historical estimate should not be relied upon. Certain information that refers to adjacent or similar mineral properties in respect of which the Company has no rights to mine. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company’s properties.
Ribago Project (75% Interest) was acquired as part of an underlying agreement with Central Asia Goldfields:
- Discovered in the 1980′s by Noranda.
- Located along the Central Camp’s Main Exhalite horizon host to the Millenback, Amulet, and Old Waite VMS deposits.
- Ribago non 43-101 compliant resource is 480 kt @ 7.97% Zinc, 1.9 g/t Gold and 23.3 g/t Silver, 0.4% Copper1. No assessment of the potential for profitable extraction of the above tonnage and grade has been made. Future programs under consideration will focus on validating the tonnage and grade identified.
- Old Waite mine that produced 1.1 Mt @ 4.6% Copper, 1.1 g/t Gold, 22 g/t Silver, and 3% Zinc and the Amulet A produced 4.7 Mt @ 5.41% Copper, 5.30% Zinc, 4.4 g/t Au and 44.2 g/t Silver.
The stratigraphy on the Ribago property is well known, consisting of the Amulet Rhyolite and the Amulet Andesite overlying the synvolcanic Flavrian Complex. The Ribago VMS lens is located along the Main Exhalite (rhyolite-andesite contact), at a vertical depth between 1 000 and 1 200 m.
- Historic Drilling – 93 holes totaling 53 000 m of historic drilling was completed prior to 1990 with the majority of holes were done to a maximum depth of 900 m.
- Next Steps -compile and analyse the historic data leading to an initial drill program to test the depth and strike extent of the mineralization.
The Company advises that the production, tonnage and grades listed above are historical in nature and have not been verified. The category of historical resource does not conform to current CIM definitions. The historical estimates are not supported by a technical report. A qualified person has not done sufficient work necessary to classify the historical estimates as a current mineral resource or mineral reserves. The Company is not treating the historical estimates as current mineral resources and the historical estimate should not be relied upon. Certain information that refers to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company’s properties.
Share Structure and Ownership
- Shares Outstanding: 70,027,458
- Warrants: 9,423,000
- Options 3,600,000
- Fully Diluted83,050,458
- Working Capital: $6.0 Million
- Osisko: 11.4%
- Goodman and Company Investment Counsel: 13.6%
- QMX Gold: 10.5%
- Other Institutions: 8.5%
- Insiders: 5.2%
Information contained herein was provided by Falco Pacific Resource Group. (“Falco”) management and other sources deemed to be reliable. Stephane Poitras is a non-independent Qualified Person and has compiled the technical information from publicly available industry information, Canadian National Instrument 43 -101 compliant technical reports and new releases with specific underlying Qualified Persons as set out in the releases and reports of Falco Pacific. Industry information has been compiled from publicly available sources and may not be complete, up to date or reliable.
This report contains forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include terms of the transaction, including acquisition costs, shares to be issued and approval of the TSX Venture Exchange and future plans. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forwardlooking statements include those risks set out in the Company’s public documents filed on SEDAR at www.sedar.com. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
This report is for information purposes only and is not a solicitation. Please consult the Company for complete information and a Registered Investment Representative prior to making any investment decisions. This presentation reports on the technical details of the company ‘s projects and provides a guide to the company’s potential future activities and use of funds. There can be no assurance that the company objectives will be achieved.
Inferred Resources are reported. The US Securities and Exchange Commission does not recognize the reporting of Inferred Resources. These resources are reported under Canadian National Instrument 43-101 and have a great amount of uncertainty and risk as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of Inferred Resources will ever be upgraded to a higher category. Under Canadian Rules estimates of Inferred Mineral Resources may not form the sole basis of feasibility studies or pre-feasibility studies. INVESTORS ARE CAUTIONED NOT TO ASSUME THAT PART OR ALL OF AN INFERRED RESOURCE EXISTS, OR ARE ECONOMICALLY OR LEGALLY MINEABLE.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this report, which has been prepared by management. There can be no assurance that any of the assumptions in the resource estimates will be supported by a Pre-feasibility or Feasibility Study or that any forward looking event will come to pass.
The data is incomplete and considerable additional work will be required to complete further evaluation, including but not limited to drilling, engineering and socio-economic studies and investment.
This report also refers to historic geological resources – identified by an asterik * in the text – these resources are historic in nature and pre-date the implementation of Canadian
National Instrument 43-101. Neither the Canadian nor the US Securities and Exchange Commission recognize the reporting of historic resources they are considered conceptual in nature. It cannot be assumed that all or any part of geological resources will ever be upgraded to a higher category. INVESTORS ARE CAUTIONED NOT TO ASSUME THAT PART OR ALL OF GEOLOGICAL RESOURCES EXISTS, OR ARE ECONOMICALLY OR LEGALLY MINEABLE. They are included herein solely for historic context and completeness.
This report contains information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company’s properties. Past performance is no guarantee of future performance and all investors are urged to consult their investment professionals before making an investment decision. Investors are further cautioned that past performance is no guarantee of future performance
The Company may access safe harbor rules. Information Update as at February 18, 2014.
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