BonTerra Resources (BTR.V) closed another oversubscribed private placement in July, raising an additional C$1.8M after having completed a deal to raise in excess of C$5M in July. It’s remarkable how much cash is being thrown at this exploration-stage company, but if you have a closer look at the assets, the market’s love for this company does make a lot of sense considering BonTerra is trading at a market cap of just C$26M with approximately C$5M in cash.
The company’s main project still is the 100% owned Gladiator gold project, located in the Urban Barry camp. BonTerra definitely believes it’s sitting on a gold mine (pun intended), as the company almost tripled the size of its land position in the camp. BonTerra has been able to confirm a strike length of 450 meters at Gladiator and has traced the mineralization to a total depth of almost 500 meters, and this was a good enough reason for fellow exploration company Osisko Mining (OSK.TO) to maintain its 9.5% stake in the recent financing.
Right after raising the additional C$1.8M, BonTerra kicked off an additional drill campaign to complete another 10,000 meters of drilling during the summer which will predominantly focus on the eastern extension of the Gladiator project in an attempt to expand the strike length. We are actually expecting to see new drill results any day now, and it will be exciting to see additional assay results on the eastern portion of Gladiator as this will very likely increase the current resource estimate containing 273,000 ounces of gold at an average grade of 9.37 g/t.
A large part of the exploration program totalling 25,000 meters of drilling has now been completed, and in more than 80% of the holes the company has reported on, visible gold was, well, visible. This bodes really well for any resource upgrade in the future, which we would estimate to come in at 750,000-850,000 ounces of gold. That’s still shy of the ‘magic’ 1 million ounce mark, but it’s pretty clear the exploration program has been money well spent as the discovery cost per ounce will very likely below C$10/oz.
Also keep in mind the Gladiator zone is located just a few kilometers from the Windfall project owned by Osisko Mining, one of BonTerra’s largest shareholders. Should Osisko’s board give the green light to develop Windfall, it would make so much sense for Osisko to consolidate the entire area to have different sources for the mill feed required to keep a mining operation going. You won’t hear us say Osisko will definitely acquire BonTerra Resources, but it’s pretty obvious it would be an ideal bolt-on addition for Osisko.
Even though Gladiator by itself could already warrant the current market cap of BonTerra, the company also is the owner of the past-producing Larder Lake gold mine which still contains approximately 950,000 ounces of gold at an average grade of approximately 5.5 g/t. Previous owners have completed in excess of 100,000 meters of drilling on the property, and BonTerra is currently compiling a historical database based on these drill results from Kerr Mines and Gold Fields (GFI) when these two companies were jointly working on the property. An additional 58 holes have yet to be added into the database to bring the resource potentially even higher than it is and also maybe ‘upgrade’some of the current ounces in the categories of mineralization from inferred to indicated.
What’s really interesting here is the fact the mine development didn’t go below the 330 meter level which is surprising given the fact most mines in the belt reach a depth of 1,000-2,000 meters and we are pretty certain BonTerra will easily be able to double the total resources at Larder Lake which could then be the basis for a new mine plan.
BonTerra is no longer a one-trick pony, and is now advancing two promising exploration-stage assets which contain 1.25 Million ounces on a combined basis. That being said, we think BonTerra will be able to boost its global resource to 2.5-2.75 million ounces of gold after completing the current round of drilling at Gladiator and re-interpreting the mineralization of the Larder Lake gold mine.