Cabral Gold Inc. (CVE:CBR) was recently named in the 2021 TSX Venture 50, placing second in the exchange’s mining category having seen its share price increase by 492% and a market cap increase of 1,047% during 2020.
Proactive sat down to speak with Cabral Gold president and CEO, Alan Carter to learn more about the decisions and operational successes that enabled the company to deliver such spectacular returns to its shareholders. And to see what 2021 will hold for the gold explorer.
Proactive: Before we get into some details, what do you think are the general ingredients that enable a company in the mineral exploration business to increase its corporate value by over 1,000% in the space of 12 months?
Alan Carter (AC): I think the first thing, is management. You have to have a highly committed management team that has a lot of relevant experience in the industry and in the relevant jurisdiction. And a team that has had success in the past in both discovering and advancing projects through to the point of production.
I don't think it's just the having experience of making discoveries, I think you've also got to have a team that can raise money. And, can also communicate a story to the investing public. And so I think management is a big part of it.
I think having a project, which has an enormous upside is also extremely important. When I invest, I look for projects, that could be five to 10 times larger than the current resource suggests. And I think that's the other thing, actually having a resource to start with, is also very, very important. Because if you've got a starting resource, it puts a floor on the share price.
So you actually have a real asset to start with. And make no mistake, we at Cabral are targeting a very, very large gold district in our area. So I think those are some of the ingredients. I also think being in the right jurisdiction helps. We are able to work 12 months of the year, so we have drill results all year round. I think that's important. We don't have a winter season which would cause us to shut down drilling.
And we are working in a country where some of the largest mining companies have large gold mines. I think being in an area where there are other major companies working is also important. Our neighbor is Eldorado Gold, and they have an advanced and fully permitted plus 2 million ounce project right next door to us. So that demonstrates to the investing public that you’re working in a region that's of interest to major mining companies.
So you've been reporting, strong drill results. What does the mineralization you have found tell you about the potential for the project?
AC: It tells us that our project is kind of unusual, because it's located in the Tapajos region, a part of Brazil which was the site of the world's largest-ever recorded gold rush in history. The Tapajos is also the largest placer gold belt in Brazil and, in global terms, is the third-largest placer gold belt. So our project is in a region that was very, very productive in terms of placer gold and all that placer gold is obviously gold that's been eroded into streams over millions of years.
During the 1980s, there were a million people washing gold from streams in over 100 different areas in the Tapajos region and our project at Cuiú Cuiú was the richest area at the time and the largest in terms of the estimated placer gold produced. So we've been looking for the source of all that gold.
We have discovered two deposits so far. But we now have all these high-grade results with 43 targets outside of the two known deposits, and 35 of those 43 targets have very high-grade gold mineralization associated with them - 10 of which have high-grade drill intercepts. Another 13 targets have high-grade gold in veins that are exposed that we can see on the surface, and which we were able to sample so on those 13 targets we know exactly where the mineralized structure is.
Another 12 of those 35 targets have high-grade gold in boulders. We’re looking for the source of those high-grade boulders but we don't know exactly where they are coming from. So there is a lot of high-grade mineralization, which tells us that Cuiú Cuiú was a very, very productive district. And because it was the largest placer goldfield in a very productive region during the 1980s, we're optimistic that it should host the largest hardrock gold deposit.
That sounds good. So could the success be just the beginning of an even greater run of value creation?
AC: Yes, I think so. Because last year, when we created this value we made the TSX Venture 50 and were ranked one of the top 10 mining companies on the Toronto Venture Exchange for 2021. In fact, the only mining company that ranked above us was a lithium company, so in terms of precious metals companies, we ranked first.
Since last year, we have expanded the current drill program, which we started late last year, and now we have three rigs running. So that's going to mean that those three rigs over the next few months are going to test between 10 and 15 targets, and generate a lot of results, which could mean a lot of potential catalysts for our share price. And we're testing high-grade targets, as I mentioned earlier, and so there will be a lot of drill results coming in the next few months.
So, yes, I think it will be a very exciting time in terms of our share price and potentially creating even more value.
In-fill drilling is a key component of your current activity at Cuiú Cuiú. But it is designed to do more than just extend known extent of mineralization within or between zones you’ve identified. Explain more to us about this objective.
AC: The drilling basically has several objectives. As I said, we have two deposits and 43 peripheral targets, most of which are high-grade. We are aiming to ultimately define six or eight gold deposits at Cuiú Cuiú, possibly more than that. So one of the key objectives of the current drill program is to make additional discoveries. We're very optimistic that the drilling that we're doing on one particular target right now, which is called Machichie, is starting to outline the third deposit. So that's one of the principal objectives of the current drill program.
A secondary objective is to demonstrate that we have high-grade resources in the two existing deposits that we have and which comprise the company’s current million-ounce resource base. They are located five kilometres apart, and the resource base is split about equally between the two deposits, which are called MG and Central. We have over 70 separate high-grade drill intercepts above 10 grams per ton gold and there are very good indications that there are high-grade zones that are continuous down-dip and along strike within both deposits. So one of the three drill rigs that I mentioned, is focused on drilling off those high-grade resources and defining high-grade resources at the two existing deposits.
And the other objective, which is kind of related to the first point is to test some of these areas, which we know very little about, where we have high-grade boulders on surface but don't know where they are coming from. Again, the objective is to make another discovery which will require more drilling. It's very unusual in my experience for a gold project to have quite so many high quality and high-grade targets, as I described earlier. I think that's one of the things that makes the project quite unusual.
So you call the Cuiú Cuiú project a district? Does that reflect the scale of the opportunity, then?
AC: Yes, I think it really does. It's very unusual for a junior resource company like Cabral Gold to control the whole district. If you look at other gold districts around the world, usually the ownership is fragmented. In this case, it's not. We actually control 100% of what we believe is a whole district which is covering an area of about 10 by 15 kilometres. And, as I have said, there are already two deposits and 43 high-quality targets within that area. So we're optimistic that a number of the targets will ultimately prove to be additional deposits. And we expect the overall resource base to grow significantly as a result of that.
The loyalty of your shareholders came through in that TSX Venture 50 Award, what would you like to convey to them for the balance of 2021 and beyond?
AC: Firstly, I'd like to thank Cabal’s shareholders, who we value enormously. Most of our shareholders have been highly supportive. They've been key to the success that we've had thus far because we have a lot of long-term and very loyal shareholders.
And I think the message to our shareholders really for 2021, and perhaps beyond that, is the fact that we have three rigs running right now. So that will generate a lot of news and hopefully generate a lot of potential catalysts for our share price.
It's going to be a very exciting year for us and we're optimistic that we will create a significant amount of value moving forward, both in 2021 and beyond that, as a result of all the drilling that we're planning on multiple targets.
Contact the author at jon.hopkins@proactiveinvestors.com