Genesis Metals (GIS.V) has started drilling a total of 8,000 meters on the Chevrier gold project in Quebec last month, so we hope to see initial assay results soon. In its press release, Genesis has provided a nice breakdown of the drill targets to be tested in the first phase (5,500 meters):
The company is fully funded for this drill program as it closed a C$3M placement in early August, raising C$1M in hard dollars and C$2M in flow-through funds with the hard dollar financing priced at C$0.28 and the flow-through raise priced at C$0.45. Each hard dollar unit also contained half a warrant with each full warrant allowing the warrant holder to acquire an additional share for C$0.42 during a two year period.
Even after this raise, Genesis just has 52M shares outstanding for a market capitalization of just over C$15M and the money will go a long way to expand the current 700,000 ounce resource estimate at Chevrier (395,000 ounces in the indicated resource, 297,000 ounces of gold in the inferred resource at a grade of respectively 1.45 g/t gold and 1.33 g/t gold). The open pit contains 365,000 ounces of gold while the underground resource of about 325,000 ounces (across all zones and resource categories) has an average grade ranging between 1.19 g/t and 1.64 g/t. That’s low for an underground project but considering Genesis used an underground mining cost of just US$7.5/t, it appears to be manageable. We are however looking forward to see Genesis add more ounces to the existing resource and perhaps spike the underground grade a little bit.
Disclosure: The author has a long position in Genesis Metals.