Mines D'Or Orbec Inc. (BLUE) Earnings Call Transcript & Summary

Thanks, everyone, for joining in today. We've got an exciting story to tell you. And it's myself here, Rob Cinits, President and CEO of Blue Thunder; and Orin Baranowsky, the CFO of Blue Thunder. So I'll get right into it. We have a little bit to cover here. I'll go through the presentation and leave some time at the end for Q&A, if anyone has any questions. So let's see if I can share the screen here, and we'll get started. All right. Just to start off, I will be making a few forward-looking statements. So please log on to our website or -- and download our presentation and read some of these important statements that we'll be making. So let's start off. We're in the Chibougamau-Chapais mining camp in Québec, very exciting area, a new emerging gold camp. We're on trend with some recent new discoveries, both of them by IAMGOLD, including Monster Lake, 433,000 ounces at 12 grams, and the really exciting Nelligan deposit, 3.2 million ounces of gold grading a gram. And Québec is just a great place to be based out of. We have some fantastic relationships with the various Québec organizations there, and we just love operating there. So our 2020 program is underway. We've been doing our Phase 1 program, which is mapping, prospecting, sampling, trenching. And we jumped right into our Phase 2 program about a month ago, and that includes diamond drilling, focusing at the Fancamp property, which has several advanced gold showings, which I will show it to you in a few minutes. We did a fairly sizable financing several months ago, and this has allowed us to move ahead with our drilling program. So I'm going to pass over quickly to Orin, and he can go through the capital markets slide here quickly.

Thanks, Rob. So here's a quick snapshot of our trading profile, ticker symbol BLU (sic) [ BLUE ]. We began trading in February of this year, 80 million shares outstanding roughly. And then on a fully diluted basis, just under $100 million market cap in and around $9 million, and the cash, $2.4 million as of June, the last reporting period. That figure is going to be lower today due to the exploration program, but the treasury is still very healthy at this point in time. One item to point out here is despite our size, sub-$10 million market cap, an early stage, we have a very strong institutional shareholding. And most of these institutions came in, in our most recent financing. We've got about 11 institutions that hold the stock currently. So I'll turn it back to Rob now, and he'll take you through the project overview.

Thanks, Orin. So a quick overview here. Our property is very large. We have 51,000 hectares. We are the largest property holder in the Chibougamau camp. 5 main properties, the Muus, Fancamp, Muus East, Nisk and Embry properties, are what comprised our 51,000 hectares, underlain by some pretty significant regional deformation zones. And these are -- regionally, these are pipelines for numerous deposits that are on strike with us, including the Nelligan and Monster Lake which I mentioned, but various other deposits, historical mines and occurrences which I'll point out in another slide coming up here. One of the important things are our property has not been actively explored in a big way since about the 1990s and about that time when gold was maybe $350 an ounce. So a lot of what we're coming up with and exploring for now might have been walked over by the old-timers in previous decades of exploration. And there's not a lot of outcrop over our property. A lot of it is covered by soil, by till covers, swamps and lakes. And this is typical Abitibi. So although it's challenging for us, it's also an opportunity because we believe there's a lot of hidden opportunities that haven't been uncovered yet. So as we pointed out earlier, it's been a busy year. We did our RTO to go public in February of this year, and we hit the ground running. We've grown our property to its current size. We've done some mergers and acquisitions, most notably with O3 Mining to acquire the Fancamp and Embry properties. We spent a lot of time digitizing and backing up hundreds of historical reports and maps, bringing them into a digital format. We did our private placement. We put together our team. And we hit the ground running with our exploration. So this map here just quickly shows where we're based. The smaller overlap at the top is the historical Chibougamau-Chapais mining camp, and that was a copper-gold camp, with about 3 billion pounds of copper and 4 million ounces of gold produced. South of that is the large oval which encompasses our 5 properties which you can see in blue, the Muus, Fancamp, Muus East, Nisk. And the Embry is up here, it's off of those circles, but it's well within the camp as well. And we're highlighted by our proximity to the Nelligan deposit, the IAMGOLD discovery and the Monster Lake discovery, and various other historical mines or resources along strike with us, including Philibert, Meston and Joe Mann, Chevrier and Fenton. So as I mentioned earlier, the property has been explored in the past. There's about 340 drill holes spread over the 51,000 hectares, but these are focused in a few select areas. And other than that, they're wide-spaced. A lot of anomalous results in the 1-, 2-, 3-gram a gold range were walked over by the old-timers, thought to be of too low grade to be of economic interest. And back then, they were absolutely right. But today, it's a different story. So what have we done? We've done a lot of aeromagnetic work over the last few years which give us complete coverage of our property, and some amazing targets are being generated from this information, and we continue to use it on an ongoing basis. We started our regional sampling and prospecting over the properties. And most importantly, we started a diamond drill program at the Fancamp property, and this will be something I'll talk about in a couple of minutes here. So this slide here once again shows our property position and some of these major deformation zones I'm referring to. The Guercheville Deformation Zone, I don't know if you can see my cursor, but it comes right through the middle of our Muus property. And then about the middle, it splays off into 3 separate splays. One of them goes right through the Nelligan deposit. Another through the Philibert, Meston and Joe Mann deposits. And a third splay comes up right through our Fancamp property up towards the Chevrier deposit. So looking at all of the historical information, we divided our exploration program into 3 priority target areas. Number one was our Fancamp property, which we acquired earlier this year from O3 Mining because it has some historical showings on it and it was an obvious starting place for us. Number two straddles this Guercheville Deformation Zone where it comes on to our property. And number three is where 2 of these deformation zones start to come close together. There's a lot of complex structural activity here and what we believe to be good traps for potential gold mineralization. So let's talk real quickly about the Fancamp property. It was discovered by Teck in the 1950s. They did drill about 105 drill holes focused along this trend here where they discovered the A, B, D and E zones, about a 2-kilometer long trend. And there's a third zone here called the C-zone, and that was -- that's centered on the Fancamp Deformation Zone. If you remember in the earlier slide, that big deformation zone that comes through. So the thing that attracted us when we looked at this property were some of these historical gold grades, including 2 meters of 10 grams, 0.9 meters of 20 grams, 3 meters of 12 and 6 meters of 8 grams. And these are all at very shallow depths, 6 meters, 10 meters, 12 meters, 11 meters. And that's sort of the thesis for the whole property. The old-timers explored at surface down to maybe 50, 70, a few holes as deep as 100 meters vertical, but that's about it for the entire property. This is the Abitibi, and we know that these systems can go down for long distances. So we're coming back. We're reevaluating this. And we're starting to trace through our drilling some of these old intercepts at depth, where we're starting to see the beginnings of some plunging mineralized shoots. And this is sort of an area that we're focusing on. In this whole trend, there's between 2 to 6 subparallel veins. These are maybe less than a meter to 2- or 3-meter wide veins or vein zones with brecciation, quartz tourmaline carbonyl alteration. And -- so we started a trenching program. We wanted to uncover a lot of the surface exposures of this mineralization. And that's pretty well done, and the assays are pending for that. We've done some regional prospecting, and we did a 14-hole drill program. It's going to be about 3,200 meters to test the down-plunge and along strike potential of the -- focusing on the A, B, and D zones. So this next slide shows the drill holes in red that we've done. In gray are the historical drill holes. And then green are some of the trenches that we've excavated as part of this program. And hopefully, we'll be able to get some results here fairly shortly. Labs are really backed up these days. This picture on the right shows the drill on-site as we started the program earlier in September. And just quickly, let's talk about the other potential on the property. As I mentioned, the priority target area 2 with that long trend where the Guercheville Deformation Zone strikes across our property, and that follows, if you can see down the far right-hand corner at the bottom, the Nelligan deposit. This is the IAMGOLD deposit, 3.2 million ounces. It's a sediment-hosted gold deposit, low grade. Very atypical for the Abitibi, not atypical worldwide. But certainly in this neck of the woods, it's not something that the historical miners were looking for. So it's hosted in sediments, which is the light blue rock shown on this geology map. And that whole package trends to the northwest on to our property. And you'll see a lot of these dots here with grades shown. These are actually RC till samples that were explored by Esso back in the '80s. And they were looking for soil samples within the till at the till bedrock interface. And they did concentrate samples, and you can see these are all loaded in ppbs. But there is an interesting cluster of grades and gold grains right at the sedimentary volcanic contact right along the Guercheville Deformation Zone, another cluster on our property just down here. And we have a third cluster, a smaller one up here in our target area 3. So these are one of the areas that we'll be looking at. We'd like to put some geophysics over this grid and do some ground IP resistivity work to see if we can fine-tune some targets. And we've also been looking at a similar sort of target up here in target area 3. Our mag has also been very -- airborne mag work has been very helpful in fine-tuning some of these targets. So at the end of the season, we're thinking about possibly doing a few drill holes to test some of these geophysical anomalies right near the end of our program. So just a little bit of a comparison here on ourselves versus some of the peers in the areas that are exploring. Vanstar is in a JV with IAMGOLD on the Nelligan deposit. They hold 25%. Doré Copper is a little bit further to the east but also up in the old historical copper-gold mining camp. And they have a few deposits there which they are advancing. And of course, Northern Superior is our neighbor directly to the south, and they have the on-strike potential of the Nelligan deposit as well, but also some other interesting opportunities in other parts of Canada. But as we release results, we're looking for a re-rating that might take us closer to a market cap in this range. Just quickly, the management team. Some of you might be aware of Chad Williams. Chad is Chairman and Director of Red Cloud, but also Blue Thunder. And he's the person who was instrumental in putting the company together. So great to have him on board, myself, Orin Baranowsky. And we have a great Board as well with a lot of background and a lot of financial and technical background. So just a quick summary. We have a very large land position in an emerging gold district, a lot of significant production, historical production and new discoveries adjacent to us. We have been running our fully funded initial drill program testing a high-grade gold target. And we have a great team, a good mix of technical, financial and strategic experience. So I'll stop talking there. And hopefully, we have a few minutes for a couple of questions.

Thanks, Rob. We do have a few minutes. So I was wondering if you could tell us about the activities you've been up to in the field most recently and how much work you've gotten through.

Yes. So we have been working aggressively on our regional prospecting program. But the main thing that we've really focused on was the trenching and the diamond drilling at Fancamp. Most of that is wrapping up now. And we're really at the mercy of the lab. So we've submitted a lot of samples, and we're just waiting for assays to come back. I think a lot of companies are in the same situation as us. Things are really getting bogged down at the labs now. But look forward to some information coming out here shortly.

And the trenching, was that all on the Fancamp property or on several of the different properties?

Yes. Our initial trenching was all on Fancamp. We really wanted to focus on understanding the surface exposures of the mineralization. But we also tested. A big part of the trenching was to look at some subparallel anomalies and other structurally interpreted targets off of the main vein trend. So it was a bit of an exploration trenching program as well.

Okay. And the drilling was focusing on, I would imagine, previous areas at Fancamp that had some good high-grade results?

That's right. We wanted to -- part of the program was really to confirm some of these historical results. We didn't specifically twin a hole, but we drilled in the area where they got some good results. But we also wanted to expand along strike and down-dip some of these historical intercepts and also get more confidence in the fact that there's more than 2 or 3 or 4 subparallel veins. We believe there might be quite a few in this area. And the final thing we wanted to do was test the theory of these plunging mineralized shoots, which early-stage interpretations identified one main one at the A zone and one main one at the B zone. So with several holes, we're testing that theory as well.

And are you currently drilling at present now? Or are you in between progress?

It's pretty much wrapping up now. We -- the rig has finished the last hole now. And we'll -- we're just compiling all of the results. We're bringing everything together, sending assays off. There's a lot of logging and data compilation to go on. But we are sending a lot of assays off to the lab, and we're waiting for results to come back.

And that was approximately 2,000 to 3,000 meters?

Yes, in that range. It was, yes, probably hovering around 3,000 meters that was done there.

Right. And so I imagine the next phase won't get going until you've had time to get all those assays back and do some more interpretation.

Absolutely. We want to be able to sit down, digest all of that and be able to then plan the next drill program there based on our drilling. So time to roll our sleeves up and start interpreting all of that data.

Right. And so any idea from the labs when you'd be able to get the results back [indiscernible]?

It's hard to tell. They're -- you can't push them that much. But at the same time, they're basically saying, "We're going as fast as we can." And I think they're just bogged down, and I don't think any lab is any different than the ones we're dealing with.

Right. Yes, hearing a lot of the same. Okay. Well, thank you very much, gentlemen. That's our time for today. And I appreciate you being with us and all of the participants as well.

Thanks so much.