Probe Metals (PRB.V) has completed the acquisition of the Monique property from Monarch Gold Corp. (MQR.TO). Probe issued C$1.5M worth of stock (1.275M shares based on a 30 day VWAP of almost C$1.18/share).
This is a strategic acquisition for Probe as it is basically adding 260,000 ounces of gold to its existing resource inventory for just C$1.5M in stock, it also appears to be a better deal than the earn-in deal Probe currently had on the table. It’s better to own 100% of the property for C$1.5M in stock rather than spending C$2M in exploration for an initial stake of just 60%. Granted, Probe will still have to spend millions of dollars on exploration, but at least it has now locked in a ‘fixed price’ for the property and its resources.
Probe Metals has now also started an advanced metallurgical program on the zones that comprise the Val d’Or East project where it plans to follow up on historical test work that indicated a recovery rate of 93% was achievable (as this was the average recovery rate of the Beliveau mine back in the day). Probe will now try to improve these results as some tests that were conducted in the Eighties indicated recoveries of 95.5-97.9%. Meanwhile, the mineral sorting study is still ongoing as Probe is hoping to unlock additional benefits from sorting the ore to reduce the amount of rock that will have to go through the mill.
Meanwhile, all exploration activities at Val D’Or East have now been suspended due to the worldwide outbreak of the COVID-19 virus. As of the end of Q1 2020, Probe had in excess of C$31M in cash and short-term investments and a positive working capital position of approximately C$29M so the company shouldn’t encounter any financial issues in the next little while. Since then, 1.65M options with a strike price of C$0.36 have been exercised, allowing Probe to add C$600,000 to its treasury.
Disclosure: The author has a small long position in Probe Metals.
