With gold stabilizing and further inflation expected with a world economy continuing to recover from COVID-19, it seems Maxtech Ventures (CSE.MVT)(OTC:MTEHF)(FRA.M1N), a junior exploration company operating in Ontario and Quebec, is in the right place at the right time. It raised C$0.94M on June 4, 2021, and recently commenced a 15,000m 3 staged drill program at their flagship St.Anthony Gold project, with the objective to prove up a historic 1.2Moz resource, and maybe even more. Management already succeeded in attracting a few large institutional names like US Global, and is followed with interest by more large parties, ready to enter when drilling delivers the right results.
The company currently has a decent 121.87M shares outstanding (fully diluted 148M), 21M warrants (the majority at @C$0.10 expiring in 2024) and several option series to the tune of 6.7M options in total, the majority priced at C$0.12 and expiring from January 15, 2022 onwards. Maxtech Ventures has a current market capitalization of C$8.53M based on the July 11, 2021 share price of C$0.07.
Maxtech Ventures, 5 year timeframe (Source: tmxmoney.com)
The current cash position of Maxtech Ventures is C$1.2M, and if the upcoming drill results prove to be successful, the company is looking to raise more soon. The all-in cost of drilling is low at C$140/m, so financing the entire 15,000m program shouldn’t be too problematic when incoming results are strong. Management, family and insiders hold approx. 30%, but the company also enjoys approx. 21% institutional ownership, as for example US Global holds 9.3%, and Palisades Goldcorp 6%.
CEO Peter Wilson: Finance specialist, raising over C$300M of equity and debt in mining/energy the last 20 years
VP Exploration: Andrew Tims, geologist with over 30 years of experience with lots of relevant experience in the area, part of the team that expanded Rainy River from 550koz to 6Moz Au, and previously worked at the Red Lake Mine.
Strategic Advisor: Greg Ferron, former CEO of Treasury Metals, IR/Corp Dev of Laramide Resources, Treasury Metals
Maxtech Ventures has a portfolio of three projects, St. Anthony, Panama Lake and Kali, with most of the focus on St.Anthony. The company’s Panama Lake project in the Red Lake district in Ontario is on trend with Great Bear Resources’ (TSXV:GBR) Dixie project and the company is earning into a 100% interest through a JV with Benton Resources. The terms encompass a 3 year period, 2M shares, cash or share payments of C$600k, and C$1M in exploration expenditures. The Kali project is already 100% owned, and is located in the James Bay region of Quebec, adjacent to the Elmer property held by Azimut Exploration (TSX:AZM).
Maxtech’s flagship asset is the St. Anthony Gold project, a 4224ha property in Ontario. Newmont’s Musselwhite Mine lies in close proximity to the North, and New Gold’s Rainy River Mine further to the West. The company has a JV with Magabra (private company) for a 100% interest, and the project has no royalties. The project and region enjoy good access, power and infrastructure. Magabra is the operator of the St. Anthony Project and Maxtech jointly approves all work programs. The former deal terms at the St. Anthony Gold project were improved significantly in H1 2021 for a 100% ownership JV by spending C$6M in exploration expenditures and issuing 30M shares to Magabra. The accelerated terms also properly align the vendor (Magabra) with Maxtech shareholders, and being the operator, the extensive vendors knowledge of the project is retained.
Historically a few small underground mines were developed at the St.Anthony Gold property in the to a 200m depth (St. Anthony Mine itself produces 63koz Au), but the project has not seen much modern exploration since. The main mineralized structural corridor, which contains the St. Anthony Mine, has been traced over 10km of strike with widths of up to 1.0km and hosts two gold deposits (St. Anthony and Dawson White), with three high grade target zones (Buckshaw, Couture Lake & Lucky Bones).
Historic drilling in 2009-2010 showed a non-compliant 1.2Moz gold resource (2012) in the St. Anthony Mine zone. Significant historic drill results already returned 1m @22g/t from 62m, 1m @ 36g/t from 79.5m depth, 54m @ 1.73g/t Au from 183m, and 100m @ 1.37g/t Au (incl 1m @98g/t Au) from 281m. However, the re-assaying of historic drill cores showed gold values up to 35(!) times higher than reported in the past, because assaying methods back then were often inaccurate compared to today’s standards, and were not assayed for free gold, and it seems free gold is present in almost every drill core. In addition, target zones Buckshaw, Couture Lake and Lucky Bones have seen sampling and trenching results up to 12.95-24.1g/t Au. Management believes there is high-grade and bulk tonnage open pit gold potential, and historic work focused on the gold potential of the quartz veins only, with little to no attention paid to the low-grade mineralization in the altered wall rocks (less than 3 to 5 g/t Au, which is certainly of interest at today’s gold prices). All this has convinced management they might have a realistic chance of proving up 1Moz with the potential for more.
4. Current Exploration Program
A maiden NI 43-101 resource will likely require 15,000m of drilling according to management, and completing drilling ASAP is the goal for now. The Phase I, 5,000m, 15 hole infill and expansion drill program started in April 2021 will be carried out on a 50-meter spacing and designed to confirm historical drill results along Zone 1, as well as test along strike to the north, south and down-dip below the 330-meter (1,000 ft.) level of the St. Anthony mine. There are at least two additional structures running parallel to Zone 1 that remain to be tested, as well. One of these is Zone 2, with a strike length of 200m and 20-30m wide.
Phase 2 and 3 drilling (each 5,000m programs) have the intention of opening up the current deposit in other directions by drill testing the Buckshaw, Couture Lake and Lucky Bones targets and by properly assaying for nugget effect mineralization, a typical Red Lake feature in Ontario. Some visible gold showings can be seen in the pictures below, coming from historic drill cores (2009-2010):
Six holes have been completed as of July 8th 2021, with drill results of the first four holes being announced in the coming week. Visible gold has been observed in all holes so far. Management is excited for the first assays to come back within a week from now, and if these results confirm or even supersede the historic results, it seems Maxtech Ventures has definitely made a strong start in proving up a potential 1Moz gold resource at the St.Anthony Gold project.
5. Key points
- Management is delivering on promises made, including successful exploration permitting (during COVID-19), improving JV terms, and raising capital to commence the Phase 1 drill program.
- NW Ontario is experiencing an increase of investment and activity, including Wesdome’s recent spin-out of their Moss Lake project and Treasury Metals’ consolidation of the Goliath-Goldlund projects.
- This could be a unique opportunity for Maxtech to quickly convert a historical (non-complaint) resource estimate into an NI 43-101 resource following the 15,000 m drill program. In addition to this, management hopes that successful expansion drilling could confirm more tonnes, and improve the overall average grade, growing the resource even larger.
- We believe that the St. Anthony Gold project has the potential to be a prize in the region. Following potential drilling success, Maxtech should appear on the radar of producers, as a potential 1Moz open pit gold resource in Ontario is highly sought after.
- The two twinned holes are important to watch, those results go a long way in verifying and validating successful historical drilling.
- As re-assaying of historic cores showed, the actual grades are much higher than previously reported because of assayed free gold. Combined with observed visual gold in all currently drilled cores, management expects better overall drill results.
Therefore, we see realistic potential for a strong re-rating, as peers with a compliant 1Moz resource have market caps 2.5 to 5 times higher than the current, tiny C$9M market cap of Maxtech. Stay tuned!
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The author is not a registered investment advisor, and currently has a long position in this stock. Maxtech Ventures is a sponsoring company through a third party. All facts are to be checked by the reader. For more information go to www.maxtechventures.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.