Gold Rush Quebec – 2017

Quebec’s Abitibi Greenstone Belt is one of the top ranked regions in the world for mining investment attractiveness – and for good reason. Currently, there is one region in particular in the Abitibi which has attracted a lot of attention; the Urban-Barry Greenstone Belt, which sits 170 km northeast of Val d’Or and 125 km southwest of Chibougamau.

The Urban-Barry belt is located in the Abitibi sub-province of Superior. This area is underlain by Archean Volcano-Sedimentary, which mainly contains gold mineralization in quartz-carbonate veins mineralized with sulphides. Although a few of the companies in the area possess a NI 43-101 resource, the area hasn’t seen a lot of exploration, in relative terms. The area will, however, see thousands of metres of drilling over the course of 2017, which should provide insight into the value of the mineralization in the area.

What’s the source of the excitement for this region of the Abitibi? In my opinion, it’s because of the great results that Osisko Mining (OSK:TSX) has been releasing over the last few months. Their Windfall Lake Gold Deposit has had some stellar drill holes and appears to possess all of the makings of the region’s next mine.

Windfall is in close proximity to Beaufield Resources (BFD:TSXV), Bonterra Resources (BTR:TSXV), Metanor Resources (MTO:TSXV) and Urbana Corporation (URB:TSX). Each of these juniors own prospective land packages around Windfall and are fully financed to explore for the next economic gold deposit in the area.

Today, I would like to introduce you to the Beaufield Resources story.  Beaufield owns property in the heart of the Urban-Barry Belt, where it shares its border with Osisko’s Windfall Gold Deposit. I believe the company has a ton of potential, especially in the near term with its Urban property. Let’s take a look:

 

Beaufield Resources (BFD:TSXV)

  • MCAP – $28 million (at the time of writing this report)
  • Shares Outstanding – 195 million
  • Fully Diluted Shares – 215 million
    • Options – 6 million
    • Warrants – 14 million
  • Osisko owns 16.4% of the company – a sign of the potential value in the properties that Beaufield owns.
  • Closed a $6 million financing on Feb 9, 2017
    • Issuing a total of 40 million common shares at $0.10 and 13.3 million flow-through shares at $0.15.
    • O3 investments a wholly owned subsidiary of Osisko Mining subscribed to 31.7 million of these shares.
  • $8 million in working capital

 

Beaufield’s People

  • Beaufield has seen some changes in management as of late, with long time President and CEO, Jens Hansen, and Board of Directors member, Bernard Deluce, resigning.
    • Ron Stewart, a Professional Geologist with over 30 years experience within the mining industry has been appointed interim President and CEO. Stewart has experience on both sides of the table, having worked in both capital markets and as an Executive on a few junior resource companies. He has held positions with Dundee Capital Markets, Macquarie Capital Markets, Clarus Securities, Verena Minerals (now Belo Sun Mining), and Kinross Gold Corp. Presently, Stewart is also the President and CEO of Eros Resource Corporation. Stewart has a well rounded background and will be able to bridge the gap between the exiting Jen Hansen and a new, permanent CEO.
    • Robert Wares was appointed Chairman of Beaufield’s Board of Directors. Wares has over 35 years of experience in the mining industry, with a long history of success. He is credited with the discovery of the Canadian Malartic gold deposit and was a co-founder of Osisko. Wares is a fantastic edition to the Beaufield team, one that I suspect will prove to be instrumental in their success in the months ahead.
    • Mathieu Stephens is a Professional Geologist and VP of exploration and has been with Beaufield since 2008. I had the chance to speak to Stephens at PDAC this year and was very pleased with what I heard for this year’s upcoming drill program.
  • In February of this year, a press release was issued by Jim Deluce (Former BFD Director) and Shanghai Huaxin Group Limited, expressing their displeasure with the progress the company has made over the last few years, as well as with the recent financing terms, which they believe were too favourable to the financing parties (which included O3 Investments, a subsidiary of Osisko). In all, this group of concerned shareholders represents around 21.5 million shares or 11% of the company.
    • Beaufield has responded to the complaints in a news release, which can be found here. In my opinion, Beaufield has done a great job with their response and I feel comfortable as a shareholder that the situation will not affect their progress moving forward. The Beaufield shareholder’s meeting has been rescheduled for April 11, 2017.
    • Beaufield responded to my question, via email, pertaining to the concerned shareholder with, “The new Board has been endorsed by the concerned shareholders.  The Annual Meeting of Shareholders will be held onApril 11, 2017 and the shareholders will receive over the next week the proxy material. We are confident this matter is settled and that the company will be able to focus its efforts on exploration and create value for its shareholders.”

 

 

Beaufield’s Properties

  • Urban Property, located within the Urban-Barry Belt, consisting of 3 blocks of property: Rouleau Block, Golden Retriever Block and Macho Block
    • Urban Property Historic Resource (not 43-101) – 540,000 tons @ 7.2 g/t, which is roughly 125,000 oz Au
    • The Rouleau Phase 1 drill results
    • Rouleau Phase 2 drilling has begun and is focusing on deeper drilling and a series of exploration targets just beyond the known Rouleau zone. Results should be released in the next 2 to 3 weeks.
    • 1500 m from Windfall’s Caribou zone lies the ET zone of the Rouleau Block. This area is of particular interest because it shares a similar geophysical signature,
      • “A linear magnetic depression that is interpreted to be related to a magnetite destructive silica-sericite alteration corridor associated with the Windfall intrusive system.” ~ Beaufield Corporate Presentation
      • The geophysics and geology clearly indicate the presence of a fold in this area, meaning that the host lithological units of the Windfall deposit may be present within Beaufield’s ET zone.
      • Two holes will be drilled before winter is over, so we will stay tuned for those results.
    • The Golden Retriever Block is currently priority, as the Beaufield team believe that this area, which is partially covered by swamp, may be a continuation of the mineralization found in the 1980s on Osisko’s Black Dog Property. An induced polarization survey was executed on this target area and did indicate a strong chargeability anomaly.
    • The Macho Block drill program is still under consideration. If it happens it will be in the summer as Beaufield has prioritized its drilling for the immediate future.

The Urban property is the focus of my speculation, as I believe there is a ton of potential in drill results that we will see over the course of this year.  Urban, however, is just one of 5 properties that Beaufield owns; here is a hyperlinked list of Beaufield’s other 4 properties:

 

The Beaufield story is not without its potential detractors:

  • Management changes – the issues and changes within the management structure that have arisen over the last couple of months may be concerning for some. In my opinion, Beaufield has dealt with the situation well and has appointed some quality people to help add value to shareholders in the immediate future.
  • Exploration blunders – bad drill results are always a risk with mineral exploration companies, however, given the Beaufield property locations and their due diligence in preparing for their drill programs, I believe the odds of good results are closer to being in our favour.
  • Share structure – there are a lot of shares out, which is all too common for an exploration company of this age and size, however, I am willing to accept this, due to the upside potential I see with this year’s drill program results.

 

There are always detractors or potential pitfalls in every junior company’s story, but now I would like to review the reasons I believe Beaufield has such great upside potential.

  • Great land package – Not only is the Urban-Barry Belt arguably the hottest exploration area in Canada right now, but Beaufield owns some great properties in some other highly prospective areas, such as the area around Goldcorp’s Eleonore gold mine or its Trolilus-Tortigny Property, which possesses a 43-101 resource estimate (Au, Ag, Cu and Zn). There is a lot of potential in Beaufield’s properties.
  • PUSH – we should have a good idea of Beaufield’s potential in the next 6 months, giving us great short term PUSH for upside in the stock price. Plus, I wouldn’t hang my hat on this, but good results from the neighbouring Osisko, Bonterra Resouces or Metanor Resources could see a spike in all of their share prices.
  • $8 million in working capital – it is one thing to have great properties, but you need money to explore them and $8 million gives Beaufield the working capital it needs to add value for shareholders.
  • Osisko’s ownership and involvement – Osisko has a great management team and, for me, their interest in a company goes a long way. Osisko owns 16.4% of Beaufield and has one of their own, Robert Wares, on the Board of Directors. For me, this is a good indication of Beaufield’s potential.

 

You be the judge. Great properties, short term PUSH, $8 million in working capital and keen interest from one of the best junior mining teams in the mining industry. I’m biased because I bought shares within the last two weeks. Do your own due diligence and decide for yourself.

Stay tuned for a look at the other main juniors in the Urban-Barry Belt, Bonterra Resources and Metanor Resources.

 

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Until Next time,

 

Brian Leni  P.Eng

 

Founder – Junior Stock Review

 

 

 

Disclaimer: This is not an investment recommendation, it is an investment idea. I am not an investment professional, nor do I know you and your specific investment criteria. Please due your own due diligence. I have NOT been compensated to write this article and do not have a business relationship with Beaufield Resources. However, I do own shares in Beaufield Resources.