In the past month or so, Margaux Resources Ltd. (TSX-V: MRL)(OTCQB: MARFF) has been quietly advancing its block of projects in the Kootenay Arc Region in lower British Columbia, Canada, with data to date indicating both high-grade and bulk mineralization opportunities.
On Tuesday, the company announced the final results from its fall 2017 diamond drill program on the Bayonne gold property, which is part of its larger Kootenay Arc project. All of the 2017 drill holes with the exception of one were found to successfully intersect the vein structure that was targeted by drilling. According to Margaux, the results prove that while there was historic production at Bayonne, the property still has much more to discover and offer.
“We are encouraged that we were able to confirm high-grade gold at Bayonne through our 2017 drill program and now have high-grade gold results in all three veins we were looking to intercept on the property,” said Tyler Rice, President and CEO for Margaux.
In the meantime, the Calgary-based company is raising $3.0 million to continue funding its efforts in the mineral-rich area and even teased investors in a recent conversation with Equities.com that more assay results should be coming in December.
The Kootenay Arc Region, located above the northeast corner of Washington state, has historically been a massive producer of gold, zinc and tungsten, albeit scattered across dozens of mines and operators across the last century. Margaux has been consolidating the region under one umbrella, amassing the dominant land position in the area with more than 24,600 hectares of highly prolific property and past-producing mines, including Jersey, Emerald, Reno, Gold Belt and Bayonne.
Amongst other highlights of the Kootenay Arc, the largest known lead-zinc deposits in the 300-kilometer-long lead/zinc/silver belt range from 6-10 million metric tons at an average of 4% zinc and 2% lead. The past producing nature of the properties, including 623,000 ounces of gold at Sheep Creek, comes with the benefit of requisite infrastructure, complete with mills and smelter within a 90-minute drive.
During the third quarter, a drill program was completed at Jackpot, a lead/zinc/silver project. Initial results showed broad intervals of zinc mineralization cut at two target zones. Nine holes were drilled, totaling about 1,400 meters in the program for testing the Main, Lerwick and Jackpot East zones. The first two assays returned 61.1 meters (from 16.7 meters to 77.8 meters) grading 1.01% zinc in the Lerwick zone, including 1.7 meters at 7.71% zinc. In the Main zone, assays showed 49.2 meters (from surface to 49.2 meters) at 1.04% zinc.
The assays built upon surface chip sampling during the summer, where results included 3.4 meters grading 13.35% zinc, 2 meters at 15.58% zinc and 2 meters at 8.22% zinc from the Main zone, plus 2 meters grading 5.92% zinc from the Lerwick zone.
The second batch of two drill results received early in November continued to show high-grade zinc mineralization in the Jackpot East Zone, in addition to broad intervals of low-grade mineralization at the Lerwick zone. At Jackpot East, an intercept of 8.5 meters (from 112.09 meters to 120.59 meters) graded 6.66% zinc, 0.7% lead and 6.51 grams per tonne silver. Furthermore, a total of seven intersects in the same drill hole exceed 6.0% zinc, including 1.73 meters grading 12.8% zinc, 0.94% lead and 12.1 g/t silver.
The drill hole in the Lerwick zone was highlighted by 36.3 meters (from 63.23 meters to 99.53 meters) grading 1.48% zinc, including 2.71 meters at 6.10% zinc.
Given those results were about three weeks ago, the company is likely on the lookout for results from the remaining five drill holes to lend further confirmation of zinc mineralization at the Jackpot property. While those results are finalized, drilling is being completed at Sheep Creek, where Margaux aims to prove there is plenty of gold left in ground, similar to the drilling at the old Bayonne Mine, where drilling below previous mining depths uncovered good gold grades, including 15.31 g/t gold over 1.85 meters in the Bayonne Main vein and an 18.2 g/t gold over 0.32 meters intercept in the first ever drilling of the Maggie Aikens vein.
Don’t Underestimate Tungsten from Tailings
In the Margaux story, an underappreciated component is its potentially robust tungsten assets. Tungsten prices have risen over 50 percent since January as market participants speculate about a potential supply shortfall against the backdrop of planned increases in funding for U.S. infrastructure, where tungsten is integral to construction. Moreover, China controls about 80 percent of the world’s tungsten supply, setting the stage for potentially contentious trade if a North American supply chain isn’t re-established. Margaux’s portfolio contains the Jersey-Emerald Mine, once the second-biggest producer of tungsten in North America.
Margaux may have easy pickings here. The company has identified 44 historic tailings ponds from the historic mining in the region, which have the potential to contain significant mineral content, including substantial tungsten from the historic Emerald tailings. To find out, Margaux has entered into an environmental partnership with The Salmo Watershed Streamkeepers Society and a partnership with the mining recycling and recovery experts at CRONIMET, with the aim to determine the potential feasibility of recovering minerals from the historic tailings. 3,500 kilograms of tungsten tailings have been shipped to CRONIMET’s facility in Pittsburgh to evaluate a large-scale recovery process. Pending lab turnaround time, the results should be arriving mid-December, potentially a watershed moment for Margaux with respect to a near-term cash flow.
Speaking of Cash
According to regulatory filings with Sedar, Margaux ended the June quarter (the latest reported) with $2.2 million in cash, more than enough to fund current exploration. In order to strengthen its balance sheet, the company is working on a non-brokered private placement seeking to raise and aggregate of $3.0 million through issuance of 8.3 million “units” and 1.4 million common shares.
The funds will be used for an extensive spring 2018 drill program that is already permitted. Additionally, as Rice has stated previously, capital will be allocated to advance the tungsten tailings recycling project towards a pilot phase, as well as for general working capital.
In the interest of full disclosure, we call the reader’s attention to the fact that Equities.com, Inc. is compensated by the companies profiled in the Spotlight Companies section. The purpose of these profiles is to provide awareness of these companies to investors in the micro, small-cap and growth equity community and should not in any way be considered as a recommendation to buy, sell or hold these securities. Equities.com is not a registered broker dealer, investment advisor, financial analyst, investment banker or other investment professional. We are a publisher of original and third party news and information. All profiles are based on information that is available to the public. The information contained herein should not be considered to be complete and is not guaranteed by Equities.com to be free from misstatement or errors. The views expressed are our own and not intended to be the basis for any investment decision. Readers are reminded to do their own due diligence when researching any companies mentioned on this website. Always bear in mind that investing in early-stage companies is risky and you are encouraged to only invest an amount that you can afford to lose completely without any change in your lifestyle. Equities has been compensated with cash, common shares and/or warrants for market awareness services provided.