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Landore Resources Ltd.: THE INVESTMENT CASE

Landore Resources Limited strikes gold, maybe lots of it

Landore Resources has hit significant gold showings at Junior Lake in Ontario
Landore Resources Limited strikes gold, maybe lots of it
Landore's gold hit could prove very meaningful

For many years, it’s been all about the nickel for Landore Resources Limited (LON:LND). The company has made great strides at two major deposits at Junior Lake in Ontario, to the extent that Bill Humphries, Landore’s chief executive, reckons they will be ready for a development decision by mid-year.

Much depends on the nickel price though. In recent years nickel has been very weak, and the current price of around U$8,700 per tonne isn’t far off the five year low.

With that in mind, Humphries takes the view that renewed strength is likely within the next couple of years, and remains upbeat that the US$13,000 to US$14,000 per tonne level that it would take to make the two Junior lake deposits really pay their way isn’t that far off.

In the meantime though, events at Junior Lake have taken an unexpected, but welcome, turn.

In the final round of the most recent drilling campaign at the B4-7 nickel deposit, a geophysical target two kilometres east of the known mineralisation was tested, with the idea that it might turn up more nickel showings.

Instead, what turned up was gold.

This isn’t altogether surprising, as Humphries explains. “Junior Lake is a polymetallic property,” he says.

“We’ve been concentrating on copper and nickel for some time, and we’ve been dedicated to advancing the nickel projects, but in the meantime, as we’ve been drilling on the greenstone we’ve frequently hit gold and sometimes at quite high grade.”

Indeed, at the Lamaune deposit, which was subsequently spun out of the company, Landore hit as much as 130 grams per tonne gold; elsewhere at Junior Lake intersects running as high as 35 grams have been reported over the years.

What makes the latest hits different is the potential scale. For a start, this intersection runs across more than 30 metres and grades just over 1 gram per tonne. Not bonanza grades, maybe, but across that kind of width, certainly attractive enough to consider a bulk mining scenario. There were also higher grade sections within that wider intersect, including 3.7 metres at 4.21 grams.

So far so good.

The question is: how big could this newly mineralised zone be? We won’t have long to wait for the answer. Five further holes have now been drilled in and around this initial intercept, and the results should be available next week.

Early reports are that the drill holes have all turned up similar material to the first hole, although it would be premature to second guess the numbers. At the moment Landore is talking of a new mineralised “zone” rather than of a discovery.

Even so, you can sense Humphries’ excitement. He’s found gold projects before that went on to become mines, and he knows what he’s looking at.

“That’s good material,” he says. “If it does come up it’ll be a heap leach deposit. We’d go in there and move it fast. It’d be low capital, and it will pay for the development of infrastructure for the nickel operations.”

On the whole there appear to be very few downsides. The next results will come in, sampling and trenching work will continue, and Landore will then consider when and where to initiate another round of drilling to flesh things out. Rigs are already on site. Humphries just has to give the command.


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