After closing the C$950k non-brokered private placement in May (14c FT and 11c NFT with half 22c 3y warrant), completing an airborne magnetic survey, and interpreting lots of data in order to identify multiple targets for summer prospecting, EGR Exploration (EGR.V) is ready to commence their exploration program at their flagship 40,255ha Detour West Gold property in Ontario. The project is on trend and directly west of the giant Detour Lake gold mine. Since EGR will receive a C$200k grant soon from the Ontario government, this means additional funds can be allocated to the aforementioned summer exploration programs.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Please note: the views, opinions, estimates, forecasts or predictions regarding EGR Exploration’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of EGR or EGR’s management. EGR Exploration has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.
On August 15, 2023, EGR Exploration announced the start of its summer outcrop and prospecting program at Detour West, after completing interpretation of the high resolution airborne magnetic survey, both focused on drill targeting. As Detour West doesn’t have the easiest topography (most of it is swamp land), outcrops are limited, and had to be identified by LIDAR satellite imagery. This also means, that most of the outcrops have to be accessed by helicopter, and most of the focus will be on glacial till and top of bedrock sampling.
CEO Rodriguez has a good contacts in this regard, as he is not just friends with CEO Zach Flood from Kenorland Minerals, who is arguably the world’s most foremost expert in glacial till based exploration, but more importantly EGR Exploration has director David Stevenson on the team, who is a founder and chief geoscientist of Kenorland Minerals himself. I do recognize a pretty high standard of exploration work, with a very thorough approach, so there is no doubt in my mind that if there is any gold, EGR has a high chance of finding it. I am not the only one believing this, as well-known institutional Fruchtexpress is the largest shareholder with 13.47% (and the main initiator of the proxy battle last year), and well-known Crescat Capital holds 4.13% of outstanding shares. Management and BoD have sufficient skin in the game as they hold 11.25%. The free float is tight at 20%, so most of the stock is in so-called strong hands.
The airborne magnetics survey generated the following image, clearly representing 2 important fault lines, the Sunday Lake Deformation Zone (SLDZ) and Lower Detour Deformation Zone (LDDZ), which originate onto the Detour Lake Mine property, with SLDZ containing most of the mineralization at Detour Lake.
The company is targeting gold deposits associated with the potential extensions of the Detour-Fenelon trend structures onto the Detour West property:
As a reminder, EGR Exploration has decided to follow the exploration approach which has been successful for the Detour Lake Mine. This approach had a number of subjects which EGR wants to apply, with a few tweaks here and there. A broader layout with hole spacing’s of 250-300m on fences spaced 1,000m apart would be sufficient to detect gold grain dispersion from a gold source of a potentially economic grade. A review of Detour Lake Mine’s 2018 NI43-101 report 1 indicated that a successful pre-drilling exploration approach especially south of the Lower Detour Deformation Zones (LDDZ) has been Induced Polarization (IP) surveys on 200 m line spacing and Mobile Metal Ions (MMI) geochemical survey to assist in ranking of the geophysical IP anomalies.
With a bit more detail, the company is looking to do a program along an 8 km stretch of the western interpreted extension of the Sunday Lake Deformation Zone (SLDZ) starting approximately 1 km to the southeast of the A series RS drill holes. There are 10 airborne anomalies and 3 elevated conductivity zones present along this stretch of the interpreted SLDZ. The EGR Exploration team is determining at the moment which exploration strategy to apply for what target zones exactly, and will update the markets further the coming weeks. The image below covers lots of new targeted areas but EGR is refining it to final stage at the moment.
The drilling will be done by a combination RC-diamond core drill allowing for both till and rock core sampling. For now, the company has commenced their summer outcrop and prospecting program through Canadian Exploration Services. This will be followed up by drill permitting in Q3 2023. After this site preparation will be done in Q4, 2023, and the highly anticipated drilling is planned to commence in January 2024.
The idea is to drill up to 125 RC/diamond holes that are aimed at testing the top of bedrock through the up to 60m thick glacial till. CEO Rodriguez told me he expects to complete 75 RC holes with the potential for more. At that stage they will be ready to follow up with deeper diamond drilling if they receive promising results. So far the goal is to test top of bedrock and get a gold dispersal train, and hitting the right type of rocks, and this strategy, including number of holes etc, will be refined further in the next weeks. Detour West is a winter project because of the ground conditions for now, this will change when large budgets are justified.
EGR has a current cash position of around C$400-500k, with the C$200k of the OJEP grant coming in soon. CEO Rodriguez told me they didn’t anticipate such difficult conditions when raising the intended C$2M in April-May, ending up with half. As a consequence, they aren’t fully funded for the upcoming RC program, and will need to go back to the markets somewhere in Q4, 2023. Regarding costs for drilling: management anticipates all-in costs of C$10k per hole, including trail building, ice building and drilling. As the glacial till from the previous Sonic program was on average 47.5m, the average expected depth this time will be 49m, with 1.5m going into bedrock. This would mean all-in costs of about C$200/m, and for example 75 RC holes would cost about C$750k. If the rocks look good, they plan to go 5m into bedrock.
When asked about timing of RC drill results when everything goes to plan, CEO Rodriguez answered that he can’t be sure at this point as it is too far out, but his best guess would be around PDAC 2024, which makes sense. In the meantime, he will announce all field exploration results when they come back, including the refined drill targets and all other relevant information when available. Personally I like this modus operandi, as it is very transparent. Many other juniors prefer to keep things like drill targeting, number of holes etc more covert, in order to avoid investors and analysts making their own subjective interpretations which could potentially harm the share price after sub-par results. As the drill bit is often called the truth machine, reality will eventually paint a picture clear as day and the share price will follow inevitably, so why not keeping the investor community up to speed in an honest and very detailed way, with realistic expectations founded on solid geo expert knowledge? EGR is firmly on its way, let’s see what they will end up with.
Conclusion
EGR Exploration might not appear to progress extremely fast, but their very thorough strategy initiated exactly from the haphazard exploration from former management, failing to generate meaningful results. As Detour West appears to have the hallmarks to potentially contain (very) substantial mineralization, it is covered by on average 47.5m of overburden, so exploration isn’t clean cut and lots of puzzling of all available data and information is warranted. As fieldwork is underway, further refining of the exploration strategy is being contemplated at the moment, and will be announced in a few weeks. Drill targeting will follow in a few months, with RC drilling planned in January, 2024. Stay tuned!
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter at www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.
Disclaimer:
The author is not a registered investment advisor, and currently has a position in EGR Exploration and Kenorland Minerals. EGR Exploration and Kenorland Minerals are sponsoring companies. All facts are to be checked by the reader. For more information go to www.egrexploration.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Please note: the views, opinions, estimates, forecasts or predictions regarding EGR Exploration’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of EGR or EGR’s management. EGR Exploration has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.
On August 15, 2023, EGR Exploration announced the start of its summer outcrop and prospecting program at Detour West, after completing interpretation of the high resolution airborne magnetic survey, both focused on drill targeting. As Detour West doesn’t have the easiest topography (most of it is swamp land), outcrops are limited, and had to be identified by LIDAR satellite imagery. This also means, that most of the outcrops have to be accessed by helicopter, and most of the focus will be on glacial till and top of bedrock sampling.
CEO Rodriguez has a good contacts in this regard, as he is not just friends with CEO Zach Flood from Kenorland Minerals, who is arguably the world’s most foremost expert in glacial till based exploration, but more importantly EGR Exploration has director David Stevenson on the team, who is a founder and chief geoscientist of Kenorland Minerals himself. I do recognize a pretty high standard of exploration work, with a very thorough approach, so there is no doubt in my mind that if there is any gold, EGR has a high chance of finding it. I am not the only one believing this, as well-known institutional Fruchtexpress is the largest shareholder with 13.47% (and the main initiator of the proxy battle last year), and well-known Crescat Capital holds 4.13% of outstanding shares. Management and BoD have sufficient skin in the game as they hold 11.25%. The free float is tight at 20%, so most of the stock is in so-called strong hands.
The airborne magnetics survey generated the following image, clearly representing 2 important fault lines, the Sunday Lake Deformation Zone (SLDZ) and Lower Detour Deformation Zone (LDDZ), which originate onto the Detour Lake Mine property, with SLDZ containing most of the mineralization at Detour Lake.
The company is targeting gold deposits associated with the potential extensions of the Detour-Fenelon trend structures onto the Detour West property:
As a reminder, EGR Exploration has decided to follow the exploration approach which has been successful for the Detour Lake Mine. This approach had a number of subjects which EGR wants to apply, with a few tweaks here and there. A broader layout with hole spacing’s of 250-300m on fences spaced 1,000m apart would be sufficient to detect gold grain dispersion from a gold source of a potentially economic grade. A review of Detour Lake Mine’s 2018 NI43-101 report 1 indicated that a successful pre-drilling exploration approach especially south of the Lower Detour Deformation Zones (LDDZ) has been Induced Polarization (IP) surveys on 200 m line spacing and Mobile Metal Ions (MMI) geochemical survey to assist in ranking of the geophysical IP anomalies.
With a bit more detail, the company is looking to do a program along an 8 km stretch of the western interpreted extension of the Sunday Lake Deformation Zone (SLDZ) starting approximately 1 km to the southeast of the A series RS drill holes. There are 10 airborne anomalies and 3 elevated conductivity zones present along this stretch of the interpreted SLDZ. The EGR Exploration team is determining at the moment which exploration strategy to apply for what target zones exactly, and will update the markets further the coming weeks. The image below covers lots of new targeted areas but EGR is refining it to final stage at the moment.
The drilling will be done by a combination RC-diamond core drill allowing for both till and rock core sampling. For now, the company has commenced their summer outcrop and prospecting program through Canadian Exploration Services. This will be followed up by drill permitting in Q3 2023. After this site preparation will be done in Q4, 2023, and the highly anticipated drilling is planned to commence in January 2024.
The idea is to drill up to 125 RC/diamond holes that are aimed at testing the top of bedrock through the up to 60m thick glacial till. CEO Rodriguez told me he expects to complete 75 RC holes with the potential for more. At that stage they will be ready to follow up with deeper diamond drilling if they receive promising results. So far the goal is to test top of bedrock and get a gold dispersal train, and hitting the right type of rocks, and this strategy, including number of holes etc, will be refined further in the next weeks. Detour West is a winter project because of the ground conditions for now, this will change when large budgets are justified.
EGR has a current cash position of around C$400-500k, with the C$200k of the OJEP grant coming in soon. CEO Rodriguez told me they didn’t anticipate such difficult conditions when raising the intended C$2M in April-May, ending up with half. As a consequence, they aren’t fully funded for the upcoming RC program, and will need to go back to the markets somewhere in Q4, 2023. Regarding costs for drilling: management anticipates all-in costs of C$10k per hole, including trail building, ice building and drilling. As the glacial till from the previous Sonic program was on average 47.5m, the average expected depth this time will be 49m, with 1.5m going into bedrock. This would mean all-in costs of about C$200/m, and for example 75 RC holes would cost about C$750k. If the rocks look good, they plan to go 5m into bedrock.
When asked about timing of RC drill results when everything goes to plan, CEO Rodriguez answered that he can’t be sure at this point as it is too far out, but his best guess would be around PDAC 2024, which makes sense. In the meantime, he will announce all field exploration results when they come back, including the refined drill targets and all other relevant information when available. Personally I like this modus operandi, as it is very transparent. Many other juniors prefer to keep things like drill targeting, number of holes etc more covert, in order to avoid investors and analysts making their own subjective interpretations which could potentially harm the share price after sub-par results. As the drill bit is often called the truth machine, reality will eventually paint a picture clear as day and the share price will follow inevitably, so why not keeping the investor community up to speed in an honest and very detailed way, with realistic expectations founded on solid geo expert knowledge? EGR is firmly on its way, let’s see what they will end up with.
Conclusion
EGR Exploration might not appear to progress extremely fast, but their very thorough strategy initiated exactly from the haphazard exploration from former management, failing to generate meaningful results. As Detour West appears to have the hallmarks to potentially contain (very) substantial mineralization, it is covered by on average 47.5m of overburden, so exploration isn’t clean cut and lots of puzzling of all available data and information is warranted. As fieldwork is underway, further refining of the exploration strategy is being contemplated at the moment, and will be announced in a few weeks. Drill targeting will follow in a few months, with RC drilling planned in January, 2024. Stay tuned!
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter at www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.
Disclaimer:
The author is not a registered investment advisor, and currently has a position in EGR Exploration and Kenorland Minerals. EGR Exploration and Kenorland Minerals are sponsoring companies. All facts are to be checked by the reader. For more information go to www.egrexploration.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
