Kintavar Exploration Inc – Canada’s Only Proven Stratiform Copper Play & Quebec’s Only Primary Copper Asset
Share Price: C$0.26
Share Outstanding: 79.2 Million
Market Cap: C$20.6 million
Cash: C$9.3 Million
Total Liabilities: C$1.5 million
What do you do when you take the perfect asset, a proven management team, and a solid share structure?
You get the perfect junior exploration stock.
And in our books – Kintavar Exploration (TSX-V:KTR, FRA:58V) is just as close to the perfect stock you can get right now.
We’ve had the pleasure of visiting Kintavar last month, and what we saw verified our research.
Here is our analysis.
Palisade Site Tour
Off we go to the Kintavar’s flagship Mitchi property – a mammoth 30,000 hectares located just 100 kilometers from the town of Mont-Laurier. The project is accessible by logging and gravel roads with a hydroelectric power substation located just 14 kilometers to the east. The power was already brought to site in 2013 to service the 150 people capacity camp that Kintavar used this past summer for exploration.
Mitchi is made up of three main corridors.
‘Sherlock’ to the south (the most explored so far) – ‘Nasigon’ to the north – and the newly discovered ‘Hispana’ that’s right in between.
The mineralization on these corridors can be followed for hundreds of meters – if not kilometers.
Stratiform Copper Deposits
The Mitchi property exhibits characteristics specific to Stratiform Copper deposits (SSC).
These types of deposits occur with the precipitation of copper-sulfides at oxidation-reduction zones – this is when the copper rich fluids encounter a rock unit such as carbonate rocks (like marbles) or sedimentary units that can chemically precipitate the ore bearing fluids.
Now, these orebodies are relatively thin (three-to-thirty meters) but have extensive horizontal dimensions (1,000’s-plus meters).
An example of the size of an SSC – the European Kupferchiefer deposits (with more than 60 million tonnes of contained copper) has been continuously mined from 1199 AD.
This supergiant SSC has a continuous mineralized extent of 10’s of kilometers. . .
Putting it simply – they’re massive.
SSC’s are the second largest source of copper – right next to porphyry deposits. And they account for a quarter (25%) of the world’s total copper production.
Only a handful of these were ever discovered in Canada and the USA.
Here’s a list showing the largest SSC’s and their copper content. . .
On-The-Ground Exploration of Mitchi
Most of the day was spent on the Sherlock Corridor.
We geared up and started with the Sherlock trench – which is over 100 meters long.
The drilling done so far on this trench reveals that mineralization can be followed up to at least 150 meters depth (below surface).
(Sherlock Trench and Drill hole (Mineralized marble in grey)
The next stop was the Watson trench. This trench shows similar features to the Sherlock trench – like the host rocks, mineralization and copper grade.
(Watson Discovery outcrop by Noranda)
The last stop at this corridor was the massive Elementary trench.
It was just recently cleaned and assayed and we could see that the mineralization and rocks were also like the Sherlock trench. If the results are as good as they look – we believe this will be an exciting area for the company.
(Elementary Outcrop (150 meter long)
Each of these three trenches showed similar and continuity in the mineralization style and rock
type. . .
We also need to share with you that due to the strong deformation of the Grenville Province, these assemblages are stacked in on-top of each other. This creates packages of multiple layers of mineralized marbles.
Those packages may contain three-to-five marble units – with each of them five-to-fifteen meters thick.
Instead of having just one layer over a big distance you have multiple ones on top of each other over a long distance.
This particular configuration – due to the specific structural context – makes this deposit even more attractive…
(Deformation in the Grenville)
As an example, the Sherlock trench is about 100 meters long with four-five smaller mineralized marble/paragneiss assemblages.
Consistency in the assay is observed in all the results published so far.
Channel samples gave results of 0.49% Cu and 5.5g/t Ag over 20.8m – either from surface and or at depth.
Knowing the exceptional continuity of these type of deposits, it is easy to picture that those trenches form one and unique mineralized body.
This would give over 3km of potential mineralization on this corridor alone. . .
So far, the drilling results have shown mineralized units up to 150 meter deep – with everything still being open.
The site exploration then continued to the Nasigon Corridor – where mineralization and continuity remained similar as in the Sherlock Corridor (Marbles-Paragneiss packages – like the pictures showed above).
The only big surprise here was that the mineralization had higher grades. . .
Here – again – is the potential for kilometers of continuous mineralization and with the similar width and depth identified at Sherlock (so far). Note that everything is still open at depth.
Billions and Billions Pounds of Copper
The Mitchi project shows continuity of mineralization and constant grade over three main corridors.
In fact, there is currently over 6 kilometers combined of mineralization identified on the three corridors.
As of now, there are 30 kilometers of favorable stratigraphy – if you just take 25% of this you end up with 7.5 kilometers of mineralization.
The average true width averages 100-150 meters – using a 2.5 strip – you average around 0.3% copper.
This means Kintavar has potentially 400 to 700 million tonnes – which equates to between 2.5 and 4.5 billion pounds of copper. . .
La Caisse de dépôt, the institutional investor that manages several public pension plans and insurance programs in Quebec, currently owns 13% of Kintavar.
We asked them what was so attractive about the company, and their response echoed our thesis.
- Strong management and exploration team. President and CEO, Kiril Mugerman, offers the rare mix between geologist and capital markets. Currently the President and CEO of Géomega Resources, he was previously exploration geologist with Gold Fields Ltd. and mining analyst with Industrial Alliance Securities. Alain Cayer is Kintavar’s VP Exploration – previously he was a geologist for Virginia Mines’ where he discovered the Eleonore Project, which was eventually acquired for $460 million.
- Brand new mineralized area in Quebec – Caisse loves Quebec-plays, especially if its new and exciting. Kintavar brings something fresh to the table.
- Lack of true copper opportunities – like many resource investors, Caisse is gold heavy. Kintavar offers a very attractive way to position a portfolio in copper at dirt-cheap prices.
We can’t forget to mention that Geomega Resources owns nearly 25% of Kintavar.
That’s almost 40% of the shares owned by two big groups – Geomega and La Caisse – that are bullish on Kintavar’s long-term potential. Especially being the only proven SSC in Canada – and primary copper play in Quebec.
So, what’s next?
Well, the drill results are coming.
So far, four of the reported six drill holes that were investigating the area north of Sherlock, returned grades of up to 0.8% copper and 6.34 g/t silver.
In total, assays are pending for another 13 drill holes from the Sherlock corridor testing the new Irene zone as well as the Toby, Elementary and other surface and geophysical anomalies.
One drill hole from the Sherlock zone was drilled to begin initial metallurgical studies on the recoveries of copper mineralization. Results are expected in Q1 2019.
In the Nasigon corridor, full assays are pending from 20 drill holes which were testing all the zone that were discovered this summer.
Kintavar raised over $10 million in June, and Kiril is putting it all into the ground.
We are confident that Mitchi will prove to be Quebec’s new base metal sweetheart. . .
Palisade Global Investments Limited holds shares of Kintavar Exploration Inc. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report’s from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.