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Landore Resources Ltd.: THE INVESTMENT CASE

Landore gets BAM for buck at Junior Lake with gold option

This will be very easy to fast-track, because we’ve done all the work we need to move forward for the nickel lease
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Recoveries were an impressive 98%

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 this year.

Much depends on the nickel price though.

In recent years nickel has been very weak and the current price of around U$9,700 per tonne, while above last year, is still well below its best.

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 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.

Gold adds some glister

This isn’t altogether surprising, as Humphries explains.

“Junior Lake is a polymetallic property.

“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 made this different was 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

Bill Humphries is under no illusions as to the significance of the discovery at BAM East.

It’s not just his own long-years of experience in the mining industry, and in particular as one of the founders of Brancote Resources, one of the Aim market’s first great mining success stories.

It’s also that other parties are beginning to show an interest in BAM too.

“We’ve got a lot of people talking to us,” he says. “After we finished the first round of drilling we had people calling straight away.”

There are many reasons for that. The first, straightforwardly enough, are the grades and widths.

The initial announcement of the gold mineralisation at BAM East was certainly a head turner: 40.75 metres at 1.82 grams per tonne gold, with two higher grade sections of 2.25 metres at 10.28 grams per tonne and 3 metres at 5.74 grams.

When drilling resumed later in the summer, Landore then hit 38.5 metres at 3.42 grams per tonne, with additional higher grade intercepts.

By early September the company was reporting multiple instances of visible gold and more lengthy intercepts as the outcome of the summer campaign.

Drilling in 2017 has also provided encouragement. 

READ Landore Resources eyes larger gold area at BAM East after latest drilling results

READ Landore lifted by latest drilling results at BAM East

Meanwhile, field exploration on Junior Lake is set to commence on 3 August, concentrating on the Archaean greenstone belt that traverses the property from east to west over 19 kilometres and which hosts the BAM East gold deposit.

Simple process

“It’s such a simple occurrence. This will be very easy to fast-track, because we’ve done all the work we need to move forward for the nickel lease.

"We’ve got permits to construct and we’ve got very supportive First Nations. We’ve done water studies, we’ve done wildlife, fishing – all of those.”

Recent news seems to back up his confidence.

Metallurgical testwork showed combined gold recovery by gravity concentration followed by cyanidation leach extraction of the gravity tail averaged about 98%.

Shore Capital said the results from preliminary metallurgical test work at the BAM East Gold prospect in Canada were “very positive”.

What’s more, when the nickel price finally does move off its current lows, the economies of scale will suddenly become plain for both projects.

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