If being in a great location surrounded by successful neighbors was the only thing needed to guarantee success, then junior Red Pine Exploration would be a sure-fire hit.
The company's Wawa property in Ontario has Barrick Gold's Hemlo mine to the west and Newmont's Borden mine to the east - the two largest gold producers in the world.
Also, within 40 kilometres (km) distance, sits both Alamos Gold’s highly successful and growing Island Lake Gold Deposit (over 4.5 million ounces) and the Mexican-based Argonaut Gold’s, which is poised to go into production at its Magino project and boasts 2.14 million ounces of contained metal.
All of this is happening in the Michipicoten greenstone belt, an area within Canada's prolific Abitibi, which is still greatly underexplored, despite it being the scene of Ontario's first gold rush - before Timmins - for a few decades around the turn of the twentieth century. Over the last five years or so, the area has seen a significant renewal of interest.
High-grade deposits
Indeed, the Wawa region is now home to two of the highest grade deposits in Canada - Alamos Gold's Island mine and Wesdome's Eagle River asset - while the area as a whole has generated over 3 million ounces of gold since that first gold rush, at a decent grade of over 9 grams per tonne (g/t).
"I think the exploration stage we are at and where we are makes us very attractive. We are in an area that's seeing significant expansion in terms of gold production and an influx of money," Red Pine's CEO Quentin Yarie told Proactive. He also pointed out that his firm's project is in a safe jurisdiction and has excellent infrastructure.
"Let's face it, there are not many advanced exploration projects kicking around. There are some, obviously, but they get scooped up pretty quickly," Yarie said.
And it's not just Canadian companies getting interested. Australian, South American and African-based groups are also starting to dip a toe in the Michipicoten water, not least as they divest assets in locations, which are deemed riskier.
The Wawa property, a brownfield site, covers nearly 7,000 hectares (Ha) and hosts several former mines with historic production of a combined 120,000 ounces (oz) of gold. It also already hosts a tidy NI-43 101 compliant 700,000 indicated and inferred ounces across the Surluga and Minto mine south deposits at a grade of at least 5 g/t, so the potential economics for a mine look favorable.
So how did smallcap Red Pine get its hands on such an opportunity? Well, let's just say it's taken a while.
Scouting around
Yarie explained that the story began about eight years ago when Red Pine began scouting around for a decent project after the assets it had been working on had not "played out" and the firm had cash to spend.
"We found this asset (Wawa) in a bit of a bind," he said, explaining it had been in an option deal with Augustine Ventures and Citadel Gold Mines, but the former couldn't raise money and complete the option and was about to lose its stake.
Red Pine struck a deal to earn 30%, became the operator and had to spend C$2 million, which was the beginning of what was to be a lengthy process to sort out the asset's complicated ownership structure, that only ended around this time last year, when Red Pine finally consolidated a 100% ownership.
Fully funded for a C$8.4 million Phase 1 drill program this year, which is expected to be completed by July, Yarie said investors can expect a steady stream of drill results from the company in 2022 - after several positive drill assay announcements last year - as it aims to expand mineralization down-plunge and along strike at Surluga and Minto.
The aim is to push the resource to around the 2 million ounce mark, particularly by proving it extends to depth, said the Red Pine boss.
"90% of the resource is above 300m (depth) right now, so if we punch it down to 600m across the board we end up in that 2 million ounce range if everything stays status quo. If the gold mineralization gets higher grade, greater thickness we could end up with more," he explained.
For Yarie, updating the resource estimate is not key to advancing the Wawa project. He cites the example of junior Great Bear Resources (TSX-V:GBR), which was snapped up at the end of last year by major Kinross in a C$1.8 billion deal, without a resource estimate for its Dixie gold asset in Red Lake.
The thinking is that the quality of Great Bear's steady stream of exploration drill results spoke for themselves, rather than needing an official resource.
"You've just got to prove visually that there's extensive gold mineralization, and in a high hit rate like that, somebody’s interest will be garnered," said Yarie.
"The idea is you always work on these things as if they're going into production ... You don't want to just be exploring to explore. You have to be adding ounces that are critical so that those new ounces can be used in a production scenario," he added.
Experienced team
And on that note, the Red Pine team is certainly laden with highly experienced technical and exploration specialists.
Yarie himself is an experienced geophysicist with three decades in the mining industry and has been with the company for over ten years, firstly as vice-president (VP) of exploration between 2009 and 2013, and in 2015, he became the chief executive officer (CEO).
He is credited with being involved in Quebec's Malartic Mine discovery and Noront’s nickel deposit. He was also business development officer at airborne survey specialist Geotech Ltd and was CEO at both MacDonald Mines Exploration and Honey Badger Exploration.
Meanwhile, chairman Paul Martin was president and CEO at Detour Gold from 2013 until he retired in 2018 - he was CFO from 2008 to 2013. And Red Pine director Nils Engelstad is the vice-president and general counsel of Alamos Gold Inc, which holds a 19.3% stake in the group.
So Red Pine Exploration is a story that looks set to have a bright future.
Against what is undeniably currently a bullish outlook for gold, the company's high pedigree management, great asset, and enviable location mean it could certainly be a stock for investors to keep an eye on in the near future.
Contact the author at giles@proactiveinvestors.com