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Canamex Resources Corp. (TSXV:CSQ; OTCQX:CNMXF; FSE:CX6) is engaged in fast-tracking toward production at the Bruner Gold Project in the prolific gold jurisdiction of Nye County, Nevada. The region is home to several producing and past-producing mines along the Walker Lane Trend. The Bruner Gold Property is surrounded by multi-million-ounce gold deposits, including Paradise Peak, Round Mountain, and Rawhide.
Canamex holds a 70-percnet interest in the private patented and unpatented claims at the Bruner Gold Property and is the operator of the project. The project has an initial NI-43-101 compliant maiden resource estimate of 260,000 ounces of gold in the Indicated category and 63,000 ounces of gold in the Inferred category, as per the company’s Preliminary Economic Assessment of April 2016. The resource estimate is based on three main gold mineralized zones, including the high-grade, near-surface Paymaster zone from which initial production at Bruner is slated to commence.
The company’s growth strategy includes developing sufficient resources for production on patented claims first, shortening the time to permit in order to move quickly to small-scale production operations. Near-term cash flow generation will allow Canamex to build value for shareholders by minimizing dilution risk while further growing the resource through drilling.
Canamex completed a positive Preliminary Economic Assessment (PEA) on the Bruner Gold Project in April 2016 based on a low-cost simple heap leach operation. In Q4 2016, the company completed private placements and raised a total of $5,759,350. Now that the company’s balance sheet is now restructured, management can focus on advancing the project through drilling and permitting.
In November 2016, Canamex completed a fall exploration program at Bruner focused on upgrading and growing resources at Paymaster in order to further improve the economics of the project in preparation of an upcoming feasibility study. The company expects the results of the program to be ready for release in January 2017 with a larger drill program planned for the spring.
Preparation work for permitting on the Paymaster zone is also underway with groundwater drill testing on the proposed heap leach pad. These results will also be delivered in the near-term.
Canamex is led by a strong management team including President Greg Hahn, a professional geologist and geological engineer with over 35 years of extensive experience in exploration and mine development. He has held several senior level management positions in public mining companies, taking projects from mine development through to production, including in Nevada. Mr. Hahn is also one of Canamex’s largest shareholders.
- Great location: Nevada is the largest gold producing jurisdiction in the Americas and is responsible for 75 percent of gold production in the United States.
- Major structural intersection surrounded by multi-million-ounce deposits.
- Among the highest grade drill intercepts in Nevada and excellent metallurgy with gold extractions of approximately 90 percent.
- Maiden NI 43-101 technical report and mineral resource estimate completed.
- Significant untapped exploration potential with 80 percent unexplored.
- Completed positive PEA in 2016; moving toward feasibility.
- Focused both on drilling and permitting as avenues toward value creation.
- Potential for shortened permitting process and low cost near surface operation.
- Insiders control approximately 22 percent of the shares. Management and board members are significant shareholders with 10.3 percent of common shares. Canamex’s largest shareholder, Hecla Mining (NYSE:HL), has 11 percent of shares.
- Hecla’s Chief Exploration Geologist on Canamex’s Technical Advisory Team.
Key Property: Bruner Gold, Nevada
The Bruner Gold Project covers 3,520 acres of patented and unpatented claims in Nye County, Nevada and along the Walker Lane Trend. Bruner is well-positioned geographically, surrounded by key multi-million-ounce deposits including the Paradise Peak Mine (15 miles south), the Rawhide Mine (25 miles west) and the Round Mountain Mine (45 miles southeast). These three mines together have produced over 15 million ounces of gold.
Excellent infrastructure is a strong feature of this region due in large part to its long history of gold mining activity. Bruner is easily accessed from nearby Nye County Road and is within 20 kilometers of a substation with up to 10 MW capacity.
Highly prospective target zones for gold mineralization
Three Main Target Zones: Historic Resource; Penelas Zone & Penelas East; Paymaster Zone
Exploration work by Canamex has determined that gold mineralization at Bruner is associated with silica alteration spires and major structures/intersections. More than 50 such spires have been mapped and the majority remain undrilled.
Historical production at Bruner totaled an estimated 100,000 ounces at an average grade of 19.2 gpt. Today, this production site on the property is known as the Historical Resource Area. Excellent intercepts encountered in this area include 57.9 meters at 5.23 g/t gold.
Canamex began drilling at Bruner in 2012 and soon discovered a new mineral system located 1 mile east of the Historical Resource Area, now known as the Penelas Zone and Penelas East area. Drilling in these areas during 2012 to 2014 resulted in some of the best intercepts in the State including:
- 110 meters at 4.08 g/t gold;
- 91 meters at 3.10 g/t gold; and
- 1 meters at 11.9 g/t gold (re-assayed at 16.4 g/t).
The high-grade Paymaster area is the most recent discovery on the Bruner Gold Property and is only 1.5 kilometers from the Historic Resource Area. Mineralization at Paymaster is near-surface. Intercepts from the 2014 drill program include:
- 7 meters at 9.94 g/t gold;
- 1 meters at 5.13 g/t gold; and
- 6 meters at 9.98 g/t gold.
Significant exploration upside potential exists at Bruner with these additional targets:
- NW Bruno: Large Disseminated Target
- Phonolite Shaft: Large Disseminated Target
- Bruner Mine: High Grade Vein Target
Maiden Resource Estimate
Bruner hosts a NI-43-101 compliant Resource Estimate of 260,000 ounces of gold in the Indicated category and 63,000 ounces of gold in the Inferred category. The maiden resource is based on historical drill holes as well as drill work conducted between 2012 and 2014 for a total of 323 drill holes over 50,500 meters.
Significant exploration upside remains at Bruner as this initial resource remains open in multiple directions. “We’ve only drilled about 20 percent of the identified targets on the property,” said Mark Billings, CEO of Canamex. “The PEA and the resource estimate are based on these targets alone. We still think that with additional drilling there is still more to uncover on the property, creating more value for shareholders in the coming future. The hope is to replicate what Rawhide accomplished by continuing to explore that remaining 80 percent of the property we have yet to drill and potentially identify more ounces to feed our future mill.”
Metallurgical testing has yielded excellent results including:
- Gold extraction of +89 percent in 83 days on -3 inch and -3/4 inch crush;
- Gold extraction of +80 percent in 40 days; and
- Bottle roll tests returned an average of 97 percent gold extraction from both Penelas East and Paymaster discoveries.
The Bruner PEA is based on the maiden resource estimate and shows robust economics for a high-grade, small-scale operation and assumes a $1250/oz gold and $15/oz silver price.
The PEA considers a simple oxide heap leach operation with 90 percent recovery of gold on single stage crushed material and 75 percent recovery of gold on run of mine material.
Fall 2016 Exploration Program
Canamex commenced its Fall 2016 Exploration Program in late October with a focus on in-fill drilling over 23 holes at the Paymaster resource area in order to 1) upgrade inferred resources to the indicated category and 2) re-examine the capping grade used in the current resource estimate. About half of the estimated resource for the Paymaster area was not included in the current resource estimate because a capping grade of 7 gpt was applied due to insufficient drill density in the core higher grade resource area. Several holes from the 2014 campaign returned values greater than 30 gpt gold and one as high as 59.7 gpt gold.
In the PEA, the Paymaster area is the first to be developed, so strengthening the resource is expected to make significant improvements to the economics of the Bruner project. The Paymaster area is the first target for development because of the low costs associated with its high-grade, near-surface mineralization and its location on patented private claims which is expected to shorten the permitting process.
In conjunction with the drilling at Paymaster, Canamex is conducting groundwater drill testing in three holes in the proposed heap leach pad and pond area. As of January 2017, one test hole was completed and no groundwater was encountered. The testing is a crucial component of the permitting process for the project.
Canamex completed the work program in November 2016. The results of the program are anticipated for release in January 2017 with a larger drill program planned for the spring.
The next step for Canamex at the Bruner Gold Property is to move toward completing a feasibility study for the project.
Mark Billings—CEO and Chairman
Mark Billings recently served as a Director and as Senior Vice-President, Corporate Development of Argex Titanium Inc. (TSX: RGX), a company he co-founded in 2007. Prior to founding Argex, Mr. Billings served as Chief Financial Officer for private and public Internet companies from 2000 to 2004. From 2004 to 2006, he was Vice-President of Corporate Finance with Desjardins Securities Inc., where he led a number of public and private financings and took companies public on the Canadian exchanges. Mr. Billings also served as a director or officer with other junior resource companies in Canada. He has a Bachelor of Arts (Highest Honours) in Political Science from Carleton University, an MBA from the Harvard Business School and a Chartered Financial Analyst (CFA) designation.
Greg Hahn, P. Geo, Geo. Engineer—President
Greg Hahn is a Professional Geologist and Geological Engineer with over 35 years of extensive experience in exploration and mine development. Mr. Hahn has held senior level management positions with several public mining companies, where during his career he has used his expertise to take projects from mine development through to production. These include permitting, engineering, construction and operations for Constellation Copper Corporation; construction and operations for two open pit heap leach gold and silver mines with Coca Mines; exploration for investment opportunities in Latin America for St. Mary Minerals; and exploration and pre-development for Noranda. Additionally, Mr. Hahn has been instrumentally involved in financing and mergers for Metalline Mining Company, which resulted in significant market cap increase; and Marathon PGM Corp, which sold in 2010 for $170 million. He holds a B.A. in Earth Sciences and an M.S. in Geology and Geological Engineering.
Richard Barnett, CGA—CFO and Secretary
Richard Barnett has extensive corporate experience as a Chief Financial Officer, Controller, and Secretary with over 20 years of accounting experience serving both public and private corporations. His experience covers a wide range of companies producing oil & gas, resource & explorations, engineering, and research & development. Mr. Barnett is a member of the Certified General Accountants of British Columbia. In order to stay abreast of new business procedures, he has taken extensive business and accounting courses in addition to regulatory courses and workshops. In addition to overseeing the accounting functions within the Company, Mr. Barnett’s responsibilities include managing the annual audit, budgeting, preparation of financial statements and management discussions & analyses.
Dr. Dean McDonald, PH.D., P.GEO.—Director
A seasoned industry professional, Dr. McDonald serves as Hecla Mining Company’s Senior Vice President-Exploration. Dr. McDonald is experienced in all aspects of mineral exploration from grass roots programs through to feasibility studies, ore reserve estimations, and has experience in operations. Prior to his employment with Hecla Mining Company, he was Vice-President Exploration and Business Development for Committee Bay Resource Ltd., and was Exploration Manager for Miramar Mining Corporation and Northern Orion Explorations from 1996 to 2003. From 1990 to 1995 he was Superintendent Technical Services at the Con Mine for Miramar Mining/Nerco Minerals. Dr. McDonald obtained his Bachelor of Science Degree from McMaster University, and completed a Master’s in Economic Geology at the University of New Brunswick. He completed a Ph.D. in Mineral Deposits Geology at the University of Western Ontario.
Mike Stark has over 32 years’ experience as a successful entrepreneur, during which time he started, owned and operated two companies within the private sector. Additionally, Mr. Stark has over 24 years’ experience as a fireman and is currently serving as Captain for the City of White Rock. As a former President of the Fire Department Charity, he has continued to perform an active leadership role in organizing fundraisers and charity events for the fire department and the community. He has served as an independent director and audit committee member since February 2009, and is also a director of TransAmerican Energy Inc.
Frank Hoegel, MBA—Director
Frank Hoegel began his career with a London interdealer broker institute GFI Group involved in various forms of stocks, warrants and bonds. Mr. Hoegel currently serves as Chief Executive Officer of Peter Beck Performance Fonds GbR, and sits on the advisory board of Concept Capital Management, which is an asset management company, focused on evaluating and investing in Canadian resource companies, through equity investments, convertible bonds and gold, silver, and copper off-take agreements. Mr. Hoegel completed his degree in Master of Business Administration (FH) with a focus on Financial Management, Banking and International Business & Management from the University of Nürtingen, Germany. Mr. Hoegel has broad base of experience in global investments, where his expertise has been primarily focused on the structuring, initiation, and completion of international convertible debenture financings.
Jeb Handwerger is President of Mining Development Corp and has been editor of Gold Stock Trades for over six years. Mr. Handwerger studied engineering and mathematics and received his undergraduate degree from University of Buffalo and a Master Degree at Nova Southeastern University.