Ontario’s Red Lake Gold Camp is widely considered one of the largest, highest grade gold camps in North America, having produced more than 30 million ounces of the precious metal over the past century, with head grades exceeding 20 grams per tonne. Recently, though, Red Lake has once again sparked interest amongst investors following the exploration success and eventual acquisition of Great Bear Resources (TSX-V:GBR) Ltd.
Junior explorer Solstice Gold Corp. (TSX-V:SGC) is hoping to follow in Great Bear’s footsteps with the company’s Red Lake Extension project (RLX), a large and underexplored property that is being explored by a team that has been involved with some past major gold discoveries.
CEO Mike Timmins has more than 24 years of business and technical experience, including operating experience working at the mines of his hometown of Red Lake, Ontario, while also having led and consulted for several junior mining companies from start-ups to resource development. He also made a significant investment into the junior mining sector while serving as the vice president, corporate development at Agnico Eagle Mines Limited. Here, Timmins tells Proactive exclusively how the company plans to unlock shareholder value, not only through exploration at Red Lake but also with its other exploration projects in Canada.
PROACTIVE: The RLX project seems to be your company's current focus. What qualities does this project have that make it attractive for investors?
Mike Timmins: The Red Lake camp is prolific and there have been mining activity here for about 100 years and probably more than 30 million ounces of gold produced. Despite that, there has been little modern exploration away from the traditional mining areas and, in my view, there’s a lot more gold to discover and value for shareholders to capture in Red Lake. The last big win in Red Like that grabbed the attention of investors, and feeds into our strategy, is the Great Bear Resources (TSX-V:GBR) story (a company that was acquired by Kinross Gold for about C$1.4 billion).
For me, the most important aspect about the Great Bear situation was the beginning of their story where the company made the decision to focus their exploration outside the core mining area. I can only imagine there were challenging early days for the company, getting investor meetings, market traction and raising money when everyone said unless you're in the shadows of the head frame your chances of success are low. In the face of these odds they had the passion to persevere, which is key in a camp like Red Lake. In the end, they consistently delivered high-grade drill results quarter after quarter and ultimately proved up a large scale, world class, high-grade gold project outside of the core mining trend. Because of this, the whole camp, including its extensions, is now up for evaluation and exploration for new discoveries. It’s a paradigm shift that has breathed new energy into juniors that are in Red Lake, such as Solstice Gold.
Meanwhile, at about the same time the Ontario Geological Survey (OGS) put out a report reinterpreting some 2004 seismic data that showed four significant seismic features in the camp, suggesting these conduits are important for the introduction of gold to Red Lake. One of them comes right underneath where the LP Fault is for the Great Bear project. The other one comes up right underneath where the mines are situated, right along the mine trend. The paper also suggested there are two more large structures presenting in the northwest corner of the camp and in our view, underpin Solstice’s land position. This entire area, tens of kilometers of greenstone belt is largely underexplored. It’s a rare opportunity in a prolific gold camp.
Please tell us about your other projects -- the Atikokan and Qaiqtuq gold projects – how do these properties fit into Solstice Gold’s plans going forward?
Atikokan is an overlooked Archean gold camp in Ontario. The center of gravity of that camp is Agnico Eagle's Hammond Reef gold deposit, which is five million ounces, low grade, large tonnage, fully permitted, and ready to construct. Agnico is doing a lot of regional exploration, hunting for shallow, high-grade pits, or shallow underground opportunities that could potentially be important satellite operations providing supplemental high-grade ore to feed into the operation to improve project economics.
As an explorer, it’s always good to have more than one project. So when we looked at Atikokan we decided to make the acquisition and do the early work with prospecting and additional staking. Granted, it’s very early stage and probably a year and a half behind where we are at in Red Lake, but all the features are there to have a prospective project. We are aiming to get some target areas into the drill stage by the end of next year. We would then either drill it ourselves, or maybe find a partner.
Qaiqtuq, located in the Meliadine Gold Camp just north of Rankin Inlet, is the founding asset of Solstice. When Solstice was formed back in 2017, it was spun out of a diamond company called Dunedin Ventures. While exploring for diamonds, they were finding gold grains in their sampling. Not a bad problem to have, I guess. Qaiqtuq is essentially the other half of Agnico Eagle's Meliadine Camp. It is over 800 square kilometres (km2) and has more than 40 kilometres (km) of prospective structure. Our focus there is a 10 km core structure called the Arrow Corridor that has the iron formation and two large, high-grade boulder fields which flank it. Great indicators of gold at surface.
We have all the permits we need to establish a new project camp and drill Qaiqtuq, but for a company of our size it is expensive to advance a second project that far north without the required resources and some logistical support.
Your investor presentation outlines potential cash inflows of about $3.2 million over next three years. Where are these funds coming from?
Back in October of last year, Solstice made the decision to acquire a royalty and property portfolio to add more optionality to the business. At the time, there were 86 assets and half of those assets were already optioned out to third parties. So there's a group of exploration companies that are earning their way into the projects with option payments. So that's where the income is coming from. The other big benefit for Solstice is the zero-cost exposure to a new discovery at one of the active portfolio assets through the royalty.
Finally, what do your shareholders have to look forward to in the next 12 months?
Our investors will be looking forward to drill results coming from Red Lake, which we obviously know how catalytic those can be. Remember the Great Bear story! Also, I think the other area that investors can look forward to is more strategic catalysts. So if you look at our news in 1Q this year, you saw a lot of smaller deals and more of those are going to happen. And I think a bigger catalyst could be finding a partner to unlock value at Qaiqtuq in Nunavut but clearly, a new discovery in Red Lake would likely really move the needle for our investors.
Contact Sean at sean@proactiveinvestors.com