The year 2019 resembles a major turning point in the story of Canadian exploration firm M3 Metals Corp, after shedding its old name ML Gold Corp in July to better reflect the company’s diversified base and precious metals portfolio. Then, in October M3 bought the Mohave Mine Gold Project in the US state of Arizona, significantly bolstering its collection of assets across North America, which include the Block 103 Iron Ore Project and the Stars Project – both in Canada. Speaking after the July rebranding, M3’s CEO Kosta Tsoutsis said the new name would reflect the company’s focus on the large-scale Block 103 project while allowing it to continue moving other projects forward, in what can now be deemed as a nod to the acquisition of the Mohave project.
“I think now is an interesting time for us after adding the Mohave project to our portfolio,” Tsoutsis tells RGN. “This is a more developed asset compared to our Block 103 project with a much smaller capex. Obviously, it’s in a different sector with closer term production and this is exciting for us.
M3’s strategy is simple: Secure low-cost assets with clear exploration upside, with a specific focus on gold and copper opportunities in the Americas. Orchestrating this approach is Tsoutsis and M3’s president and director Adrian Smith.
The corporate pairing frequently evaluate assets around the world and move quickly when they spot value or high potential, as was the case with Mohave.
“Adrian brings a lot of experience in Canada and the US, and we have a network of technical guys who have worked across these markets in the past, so we are focused close to home and in low risk jurisdictions,” says Tsoutsis.
The Mohave opportunity
M3 secured an option from two separate vendors to acquire a 100% right, title and interest in the Mohave project, which is comprised of 160 claims (including lode claims and mill site claims) over five square miles of strongly altered rocks in the historic Weaver mining district of North Arizona.
The project has in the past received more than 550 drill holes totalling more than 68,000 feet in a Northern quarter of the property, along with mapping and sampling programmes in the Southern three quarters of the property, which have not yet been drill tested.
“What really attracted us is the near surface samples and drilling results it’s had in this one small section. And then we looked at some of the data on the mapping of the rest of the property and noticed that there were very consistent soil samples and rock samples across five km of the property.”
The previous work on the project was conducted in the 1980s and 1990s and funded by a private investor who actually managed to build heap leach infrastructure on site to 90% completion, although the project never reached production.
As the years went by, Mohave fell into a prolonged stasis under private hands until the opportunity was spotted by Tsoutsis and Smith. While the existing soil and rock samples show a gold trend along 5 km of strike, there is a belief among M3 that further tests could reveal a wider system of mineralisation.
There are at least 18 anomalous gold zones on the project that have not been drilled, leaving the potential for M3 to significantly increase the known size of the historic resources on the property.
M3 aims to create a 3D model of the historic resource, estimated at 96,000 oz Au, and bring this into 43-101 compliance category, although currently the company is focused on compiling the large amount of existing data from previous mapping and sampling programmes on areas that have registered gold signatures and have never been drill tested.
“Once we compile the data it will give us a better idea of where to plot our upcoming drill campaign. We’re going to apply for at least 200 RAB and core drill holes coming up, and we plan to apply for drilling and production permits at the same time.”
A colossal iron ore project
The Block 103 project is located in the heart of Labrador Trough, a 1,600 km long and 160 km wide geologic belt in Canada that runs through the politically stable and mining-friendly provinces of Québec and Newfoundland and Labrador.
Labrador Trough is Canada’s premier iron ore district with 80 billion tonnes of known iron ore resources being exploited by a host of mining majors including Rio Tinto, Arcelor Mittal and Cliffs Natural Resources.
Block 103 is the world’s largest 100%-owned magnetite NI 43-101 compliant resource, after M3 spent $33 million on drilling and came out with an inferred resource of 7.2 billion tonnes at 29.2% total iron. What’s more, only 4 km of a 12 km strike was included in this inaugural resource.
But in an ironic twist, M3 soon found that the resource was too big and the initial capital costs estimation of $6.5 billion in the 2013 preliminary economic assessment proved too high for a company of its size.
“It was all well and good having one of the biggest iron ore projects on the planet, but we were stuck with a capex of nearly $7 billion,” says Tsoutsis. “To rectify this, we have recently hired Hatch Engineering to do a re-scoping study in order to bring that capex down.”
In a November update to the markets, M3 confirmed that it is continuing to work closely with Hatch on the near-term completion of the engineering study, which aims to bring the capex down to below $1 billion. This lowered figure would provide a much clearer pathway to production at Block 103.
Aside from the vast scale of the project, the fundamentals at Block 103 remain highly attractive. For example, the magnetite iron ore is one of the cleanest in the region, which itself is considered to host some of the highest quality iron ore in the world.
According to the company, the Block 103 project is one of strategic global importance due to the widespread drive towards lower emissions across all industries. This trend is no more evident than in China, which has put up regulations for cleaner iron ore feeding its steel industry.
Therefore, M3’s high quality product will be highly attractive to China as well as to other countries with ambitions to bring emissions down as the world becomes acutely more conscious of its role in the climate change phenomenon.
Stars shining bright
After a successful exploration campaign in British Columbia, M3 discovered a porphyry copper-gold-silver-molybdenum porphyry system that is hosted on the Stars project. This high potential copper asset is ideally located for a low cost mine development, with gentle topography and existing infrastructure including road, rail and port access nearby.
In addition, the project is surrounded by several open pit mines such as Goldcorp’s Equity Silver Mine, Centerra Gold’s Endako mine, and Imperials Metals Corp’s Huckleberry Copper-Gold-Silver mine.
Drilling to date at Stars has been successful in continuously expanding the known mineralisation along strike and at depth, with many additional targets across the property that remain to be tested.
“We’ve had some successful results from drill holes at Stars, but on these occasions we missed the grades by just enough so the market didn’t give us enough love for it. The potential is still there; it’s got all the infrastructure and the magnetics confirm a large system is there, but then Mohave came along and we are focusing on that now.”
In the coming period, M3 will focus on securing permitting for the Mohave project, as well as compiling all the existing records into a digital database, creating modelling, doing surveys, and ultimately getting crews on the ground at the property.
“The next 12 months will also be exciting because after the Hatch engineering study comes out for Block 103 project, we’ll have to figure out the next steps there. I think we are going to create a lot more value for the company when this report comes out, as the capex is going to be a lot lower than previous estimations.”