We were introduced to Amarc Resources (AHR.V) in January of this year and the recent strength in the company’s share price is indicating Amarc is getting the attention it deserves.
The 2014 exploration program surpassed most market watcher’s expectations as the drill bit confirmed a huge mineralized copper-molybdenum system which seems to be pointing in the IKE project being one of the largest copper porphyry discoveries in the past decade. All of the initial nine drill holes have hit mineralization and already outlined a surface area of 600 X 1,200 meters. If you’d assume an average thickness of 400 meters and a density of 2.75t/m³, the total tonnage of the current mineralized envelope is already closing in on one billion tonnes so it’s easy to understand where the market’s excitement is coming from as IKE has a district-scale potential. Keep in mind, this doesn’t mean the entire one billion tonnes contains mineralization at an economic grade.
Indeed, if you’d extrapolate the 0.40%+ CuEq grade encountered in the nine drill holes, the total amount of copper in the 600 X 1,200 meter area would be in excess of 3 billion copper-equivalent pounds (using an average depth of just 200 meters). That’s obviously a very exciting discovery and even though the average grade sounds relatively low, it’s actually in line (or even better than) with other copper-porphyry projects in British Columbia. Keep in mind the tonnage and copper-equivalent resource guesstimates are our own and aren’t Amarc’s official guidance.
Amarc was running low on fumes and a $1M loan from chairman Robert Dickinson was helpful as it allowed the company to continue working on the property whilst searching for a strategic partner to advance the development of the property at a more aggressive pace. Nothing has been materialized yet but there’s plenty of interest from larger companies to team up with Amarc as both senior copper producers and Asian smelters have shown interest in the project. The copper producers are mainly interested to fill their pipelines again and a copper system with a decent grade in a very safe jurisdiction tops every producer’s list. The Asian smelters on the other hand are predominantly interested in getting their hands on the copper concentrate as the BC copper mines have a good name abroad due to the high quality of the concentrate.
Amarc is still analyzing hard copy data it gathered in the past but it will need to raise cash to fund another 9-10 hole drill program at IKE. This exploration program could be funded by one of the potential strategic partners stepping up the plate to earn a stake in this project.
A lot of work still needs to be done, but IKE indeed shows all the signs of a new major copper discovery in British Columbia and we’re confident the company will draw a lot of attention in the next 12-18 months.
Disclosure: The author holds a long position in Amarc Resources. Please see our disclaimer for current positions.