Cartier Resources (ECR.V) has analyzed all date from its past exploration programs and released an updated resource estimate for its Chimo Mine property in Québec. The project is located just half an hour east of Val D’Or and has now reached the 1 million ounce milestone.
The project now contains almost 1.2 million ounces of gold evenly spread over almost 600,000 ounces in the indicated resource category and just short of 600,000 ounces in the inferred category. The average grade of the indicated category of 4.53 g/t appears to be relatively low for an underground mine but keep in mind there is infrastructure in place and the project should be amenable for bulk mining. Additionally, applying a 90% recovery rate would result in a recoverable rock value exceeding US$200/t and thus exceeding C$250/t providing a comfortable margin over Cartier’s production cost of around C$129 per tonne (including mining, hoisting, transporting and milling expenses).
Cartier is working on a 10,000 meter drill program to further expand the current resources and its company presentation is putting an exploration target forward of at least 900,000 ounces gold in the indicated resource category and 800,000 ounces gold in the inferred category and we would expect Cartier to have reasonable and achievable targets to avoid falling short of expectations.
With plenty of existing mills in the vicinity, Cartier’s strategy to truck the rock to a nearby mill for processing could be an interesting strategy. Additionally, the Chimo property could easily be mined as a satellite property to existing operators like Agnico Eagle Mines (AEM, AEM.TO) and Eldorado Gold (EGO, ELD.TO). With a market capitalization of less than C$40M, Cartier Resources doesn’t appear to be expensive.
Disclosure: The author has no position in Cartier Resources but will initiate one within the next few days (edit: under the C$0.20 would be preferred as Cartier opened surprisingly strong on Monday).
