Brunswick Exploration
Overview
Brunswick Exploration (TSXV:BRW) has a diversified portfolio of highly prospective critical mineral properties in Canada. The company focuses on acquiring underexplored grassroots lithium projects with upside potential.
Brunswick Exploration recently expanded its lithium portfolio with its acquisition of 1,327 claims totaling 33,093 hectares in southern Newfoundland and 60 claims totaling 971 hectares in Nova Scotia. Additionally, the company completed its acquisition of pegmatite fields in the James Bay region of Quebec, which increased its holding in the area to approximately 810 claims totaling 42,892 hectares. Brunswick Exploration has also acquired 60 claims totaling 26,318 hectares containing lithium-bearing pegmatites near Hearst, Ontario.
Brunswick Exploration's notable projects include Pontiac Lithium and North Shore Lithium in Quebec, the NS Critical Minerals package in Nova Scotia, as well as the Catamaran property, Fundy Gold and Bathurst Mining Camp, all in New Brunswick.
Brunswick Exploration recently announced the start of the largest grassroots lithium exploration program in Eastern Canada, targeting several of its promising lithium assets, including the Pontiac project, the North Shore project, the Catamaran Projects and the SMB project in Nova Scotia.
The company's exploration team is led by Robert Wares, founder of the Osisko Group of Companies. Wares is an established and award-winning professional geologist with over 35 years of experience in mineral exploration and development. Wares has a proven track record of world-class discovery, including the Canadian Malartic bulk tonnage gold mine, which later became one of the largest-producing gold mines in Canada.
Company Highlights
- Brunswick Exploration is focused on exploring and developing a diversified portfolio of highly prospective critical minerals projects in Canada. The company continually evaluates new acquisitions to expand its portfolio of underdeveloped lithium assets.
- The company's Quebec-critical mineral projects include the Pontiac Lithium project, the North Shore lithium project and the James Bay lithium portfolio.
- Brunswick Exploration recently announced the start of the largest grassroots lithium exploration program in AtlanticCanada, targeting several of its promising lithium assets.
- Brunswick Exploration has also acquired 60 claims totaling 26,318 hectares containing lithium-bearing pegmatites near Hearst, Ontario.
- Brunswick Exploration management team includes Robert Wares, founder of Osisko Mining.
- The company completed its acquisition of additional pegmatite fields in the James Bay region of Quebec, increasing its holding to approximately 810 claims totaling 42,892 hectares
.
Atlantic Canada Grassroots Lithium Portfolio
The combined critical metals land package in New Brunswick and Nova Scotia includes 2,000 claims covering over 150,000 hectares. This rapidly growing portfolio contains multiple historical showings and over 150 peraluminous pegmatite dykes, coincident with lithium till and rock anomalies that have seen no exploration. In addition, the company recently expanded its lithium portfolio with its acquisition of 33,093 hectares in southern Newfoundland and 971 hectares in Nova Scotia.
Project Highlights:
- SMB Nova Scotia Critical Metals Project: The properties comprise 87 licenses and 6,524 claims, with a total surface area of 105,624 hectares, located roughly 30 kilometers west of Halifax. The properties contain over 100 pegmatite dykes within the South Mountain Batholith (SMB) that have seen no exploration for lithium spodumene mineralization. Government of Nova Scotia till samples were taken at roughly two-kilometer spacing over areas underlain by multiple Devonian granitoids of the SMB as well as Cambrian Meguma sediments. The government database's till and rock samples returned highly anomalous lithium and tin values. It is important to note that the East Kemptville Tin mine and the Brazil Lake lithium deposit are close to the SMB.
- New Brunswick Catamaran Lithium Project: The Properties comprise eight claims and 1,821 units with a total surface area of 40,363 hectares. They are located roughly 30 kilometers southeast of Plaster Rock and roughly 30 kilometers east of Florenceville-Bristol. Including previously staked ground, the property is host to over 60 pegmatites that have seen little to no exploration work. Till samples collected by the Government of New Brunswick were taken at roughly two-kilometer spacing and are underlain by pegmatitic granites and gneissic to migmatitic sediments from the Devonian and Ordovician. Highlights from the survey include an 11-kilometer till anomaly containing nine samples between 53 to 103 ppm of lithium, neighboring known beryllium and pegmatite occurrences.
Ontario Grassroots Lithium Projects
- Hearst Lithium Project: Located roughly 15 kilometers south of Hearst, Ontario, the newly acquired asset includes 226 claim blocks with a total surface area of 29,805 hectares. Brunswick Exploration staked its claims based on its preferred geologic environments and historical mapping, which indicated minimal historic exploration. In addition, the Hearst package includes an option on the Lowther Pegmatite property, containing an additional 251 hectares of underexplored pegmatite formations.
Quebec Grassroots Lithium Projects
Brunswick Exploration has continually expanded its land holdings in Quebec by targeting underexplored assets with ideal geologic formations that meet the company’s criteria. The Quebec lithium projects include three notable districts, each containing prospective assets for future exploration.
Project Highlights:
- Pontiac Project: The underexplored asset is in close proximity to Val-d’or, Rouyn and Malartic in Abitibi. The Pontiac project contains major S-type pegmatites known to contain lithium, meeting the company’s geologic criteria. The project is part of the company’s new exploration campaign to identify potential lithium deposits.
- James Bay Project: The newly acquired project is located in a region known for hard rock lithium deposits. The James Bay Project included 810 claims totaling 42,892 hectares. The project contains four deposits with defined resources, multiple spodumene showings, and nearby recent lithium discoveries.
- North Shore Lithium Project: Brunswick Exploration has identified approximately 30 pegmatite dykes and sills on its North Shore Lithium Project, with a minimum strike length of 1,200 meters and dozens of smaller pegmatite dykes. The longest pegmatite identified through satellite imagery and geological compilation measures approximately 14 kilometers in strike length. None of the pegmatites on the North Shore Lithium Project have seen exploration for lithium, and all consist of S-type pegmatites containing any combination of indicator minerals, including muscovite, garnet, tourmaline and beryl. Lithium-bearing LCT pegmatites are metal-enriched S-type pegmatites that may also contain cesium, tantalum, beryllium and tin mineralization. Brunswick Exploration will begin a prospecting campaign in this area in late Q3 2022, first focusing its efforts on the previously-disclosed Pontiac Lithium Project.
Management Team
Robert Wares - P. Geo Chairman and CEO
Robert Wares is a professional geologist with over 35 years of experience in mineral exploration and development. He was responsible for discovering the Canadian Malartic bulk tonnage gold mine, which was subsequently developed by Osisko Mining Inc. into one of Canada's largest gold producers. Among other awards, Wares was a co-winner of the Prospectors and Developers Association of Canada's "Prospector of the Year Award" for 2007. Wares was also named, together with John Burzynski and Sean Roosen, as "Mining Men of the Year" for 2009 by the Northern Miner. Wares also sits on the board of directors of Osisko Metals Inc. Wares has a bachelor of science and an honorary doctorate in Earth sciences from McGill University.
Killian Charles - President
From 2017 to 2021, Killian Charles worked as VP of corporate development for Osisko Metals. Charles was previously the manager of corporate development at Integra Gold Corp, which was an advanced-stage gold development company until it was acquired by Eldorado Gold in July of 2017. Before that, he worked as a mining analyst at Industrial Alliance Securities and Laurentian Bank Securities. Charles covered small and mid-cap exploration and production companies as a mining analyst. Charles holds a bachelor of science with a major in Earth and planetary sciences from McGill University.
Anthony Glavac - CFO
Anthony Glavac has over 17 years of experience in financial reporting, including over 12 years in the mining industry. Since August 2017, Glavac has served as vice-president, corporate controller for Falco Resources Ltd., and previously served as director, financial reporting and internal controls at Dynacor Gold Mines. Glavac spent 10 years at KPMG, working with both public and private companies, providing audit, taxation, strategic advisory and public offering services. Glavac is also involved with other public companies in the mining industry.
Gold Price 2022 Year-End Review
By Q3, seasonal weakness paired with a surging US dollar had forced gold to a 30 month low of US$1,691.
Gold price in Q1: Russia-Ukraine war adds early tailwinds
As economies around the world continued to recover from the pandemic in early 2022, Russia’s attack on Ukraine created global uncertainty, which worked in gold’s favor during the first quarter of the year.
Philip Newman, managing director at Metals Focus, explained that gold’s performance in 2022 was the result of two major factors.
“Obviously, the first one is the war, where we saw prices spike for a range of precious metals. You had that flight to safe havens that obviously dominated everything as you would expect ... then dissipated.”
As the gold price stabilized after the initial shock, long-term drivers began to emerge. “What came to the fore, and is still the most important, is really the macro backdrop, and drilling down further, the actions and expectations of the Fed," explained Newman.
Interestingly, although the war had a transitory effect on the gold price, production felt a deeper impact.
“Russia’s invasion of Ukraine and the subsequent sanctions have meant that miners operating in Russia have had issues getting financing and equipment from western sources,” said Adam Webb, director of mine supply at Metals Focus.
Higher overhead costs related to energy and transport are also weighing on gold miners globally and in the Russian region. “This has impeded Russian gold production, and we expect a 30 tonne (9 percent) year-on-year drop in output this year," he said.
The decline in supply out of Russia will be offset by a significant rise in output from another region.
“We expect global mined gold production to rise by 1 percent year-on-year,” Webb said. “The biggest contributor to this will be a rise in output from China, which we forecast to increase by 39 tonnes year-on-year, surpassing the fall in Russian production.”
The uptick in Chinese supply stems from a recovery in production following safety work stoppages in 2021.
Gold price in Q2: Inflation hedge status kicks in
In June, US inflation reached a four decade high of 9.1 percent as gold began its H2 descent below US$1,800.
Gold's weakness in the face of inflation prompted some market participants to question its value as a hedge. But other experts said the yellow metal was doing its job.
“Actually, gold has performed much better than many of the traditional inflation hedges that investors hold,” said Juan Carlos Artigas, global head of research at the World Gold Council (WGC).
While gold is impacted by higher opportunity costs, Artigas said it has largely maintained its value in the face of rampant inflation.
“Gold has outperformed TIPS (Treasury inflation-protected securities) and, more generally, global inflation-linked bonds, because higher opportunity costs are not something that is impacting only the gold market.”
Gold's price performance year-to-date.
Chart via TradingEconomics.
For Joe Cavatoni, chief market strategist of the Americas at the WGC, gold’s inflationary hedge upside is still to be seen.
“Nobody hedges inflation for three weeks; nobody hedges inflation for three months,” he said. “They hedge inflation long term … and it's the right way to think about why gold fits in your portfolio as a strategic hedge."
By early November, the Fed had implemented its fourth 75 basis point rate hike and sixth consecutive increase, pushing the federal funds rate to 3.75 to 4 percent, a 14 year high.
This environment has made gold’s ability to hedge particularly alluring for investors.
“We have had a year where investors have had to manage risk, whether it is coming from high inflation or from geopolitics; combined (those) have supported demand for gold,” Artigas said.
By mid-November, the Fed’s inflation targeting blitz had seen some success, with the consumer price index rising 7.7 percent year-on-year in October, the smallest 12 month increase since January.
As Newman explained, the better-than-expected annual inflation numbers resulted in optimism that the Fed may be able to slow its course or even pivot sooner than expected.
“You also saw a bit of a short-covering rally; we saw that in gold, and silver for that matter,” he said. “From our point of view, that felt perhaps a little bit overdone. And we saw that when prices came off fairly quickly thereafter.”
Gold price in Q3 and Q4: Bar and coin demand takes flight
Gold's more than two year price low in Q3 came as output hit a year-to-date high, a factor Webb associated with seasonality.
“Q3 is traditionally a strong month for production as mining and processing is not impacted by cold weather at operations located in Russia, China, Canada and the US,” he said. “It also falls outside of the wet season in other gold-producing countries.”
For the three month period, mine production rose to nearly 950 metric tons, a 2 percent year-over-year move.
Even though miners have benefited from these mild conditions, the effects of inflation have been inescapable.
“Inflation is pushing costs up for miners and reducing margins,” Webb explained. “The average all-in sustaining cost reached a record high of US$1,289 per ounce in Q2, and this is likely to rise again in Q3. Meanwhile, higher interest rates are making debt financing for projects and expansion more expensive.”
In terms of demand, the September quarter saw a 28 percent year-over-year improvement despite a steep decline in investment demand. Although bar and coin purchases continued to gain strength, rising 36 percent, exchange-traded funds (ETFs) grappled with more outflows. The discrepancy highlights the differences in the two segments, explained Newman.
“The gold ETF space really is dominated by larger investors, not necessarily retail,” he said, pointing out that these investors are motivated by Fed expectations and real yields. “I think you've seen liquidations of ETFs, which is in broad measure echoing some of the activity you see on the (Chicago Mercantile Exchange)."
On the flip side, demand for bars and coins has already surpassed 880 metric tons for 2022, the highest level since 2013. Newman attributed the steady increase in bar and coin demand to retail investors responding to inflation.
“But from an institutional point of view, because rates have been so low, that rising inflation signals to them that all the rates are going to continue to rise,” he explained. "That's why you see (institutional investors) taking a negative view of gold, whereas retail investors tend to react in a more traditional sense to inflation, and are therefore buying gold as a hedge against inflation."
By December 6, the price of gold was holding above US$1,750 at US$1,771.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
