Balmoral Resources Ltd. (TSX:BAR, Financial) (BALMF, Financial), the Canadian exploration and development company that aims to create shareholder value through the advancement of high valued gold projects and base metal assets in Canada, announced the hole drilling results from the Bug South gold deposit Jan. 23.
The Bug South gold deposit is localized at Martiniere, the company’s property in Quebec. In the Canadian province, Balmoral Resources is currently advancing another metal project, the large H3 (Grasset).
The most important drilling results are highlighted as follows:
- 41.95m grading 3.24 g/t gold including 11.58m grading 6.30 g/t gold from the Upper Bug Zone – hole MDE-16-246B.
- 13.93m grading 4.07 g/t gold from the Upper Bug Zone – hole MDE-16-250.
- 10.13m grading 7.34 g/t gold including 5.34m grading 13.54 g/t gold from the Hanging Wall Zone – hole MDE-16-247.
- 13.79m grading 2.80 g/t gold including 2.22m grading 16.33 g/t gold from the 221 Zone – hole MDE-16-247.
Source: balmoralresources.com
What do these drilling results mean, and why they are so important for investors or potential investors in Balmoral Resources?
Let’s consider the results from the hole MDE-16-246B: the company says that from the drillings of the Upper Bug Zone, the exploration team achieved the following result: “41.95m grading 3.24 g/t gold, including 11.58m grading 6.30 g/t gold.”
These findings mean that at 41.95 meters the exploration team found a deposit of valuable minerals, and they have also found a richer strike of ore over a subspace of 11.58 meters in the wider part of the mineralized area.
The values 3.24 g/t and 6.30 g/t refer to the concentration of gold in the mineralized length. Of course, the higher the concentration, the richer the deposit. The grade of an ore deposit influences operating costs. The lower the grade is the higher are the costs related to extract and process one ounce of gold from the deposit and vice versa. If a deposit is not characterized by having a sufficient concentration of gold in the ore, the company’s economics can be dramatically affected when gold trades low on the market with repercussions on the value of the mining company on the stock market.
From the Hanging Wall Zone, the exploration team found the highest concentration of gold: 13.54 grams of gold per ton of ore over a subspace of 5.34 meters in the wider part of the mineralized area, where thickness is 10.13 meters. These results came from the hole number MDE-16-247.
Furthermore, the company says that “strong gold values also continue to be intersected throughout the deposit area in the Hanging Wall Porphyry (HWP).”
This statement is important because a porphyry, which is a type of deposit, tends to be a huge one. Its area could cover kilometers.
Drilling results that show high grade intersection over a considerable length can have a huge positive impact on the share price of Balmoral Resources if the company’s project receives adequate promotion by the mining media.
The company says that it “will have drill core from the Bug South gold deposit on display in the core shack, booth 820, at the 2017 Mineral Exploration Round-Up in Vancouver, British Columbia on Jan. 23 and 24, and at the Prospectors and Developers Association convention in Toronto on March 5 and 6.”
Balmoral Resources is listed on the Toronto Stock Exchange where the stock is trading at 92 cents in Canadian dollars (70 cents) per share and on the over-the-counter market where the stock is trading at 70.63 cents U.S. per share.
Another thing to look at is if Balmoral Resources can fully fund the next exploration program. According to Philip Ker, analyst at PI Financial, the company’s winter exploration program that should start sometime in February, is completely funded, as reported by streetwisereports.com.
One more thing the investor should consider is that the gold deposit is in a mining friendly jurisdiction and in a proven mineralized area.
Among the Top Mutual Fund Holders, the Vanguard Precious Metals and Mining Fund stands out with 5,552,174 shares of Balmoral Resources, held at the end of July 2016. It represents approximately 4.43% of the company’s total shares outstanding. The position is valued $4,125,265 as of Jan. 26.
Disclosure: I have no positions in any stock mentioned in this article.
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