An emerging huge play along the Cadillac Trend in northwest Quebec is unquestionably Wasamac, Richmont Mines‘ (RIC, TSX) growing Gold deposit 15 kilometres west of the historic mining community of Rouyn-Noranda. We started writing about Wasamac late last year and the news just keeps getting better and better, though many market participants still aren’t aware of what’s developing at this property and potentially – especially after today’s news from Visible Gold Mines (VGD, TSX-V) – in the immediate area around it. That’s one reason BMR has arranged another Rouyn-Noranda visit for the very near future to explain this exciting story to our readers and the investment community at large.
Wasamac is a winner which is why Richmont, traditionally quite conservative, is aggressively tackling this property with five drill rigs at the moment. Results like 46.6 metres grading 3.45 g/t Au and 68.42 metres grading 2.66 g/t Au (true width) demonstrate that Richmont is on track to significantly upgrade and expand NI-43-101 resources announced in mid-February (1.4 million ounces, all categories). A scoping study is expected to be completed by year-end.
As interesting as Wasamac already is, today the story grew even more intriguing when Visible Gold Mines came out with some powerful news regarding claims to the south, west and east of Wasamac that it has optioned from Cadillac Mining (CQX, TSX-V). There was a lot for investors to chew on in this news, so here’s what we found most exciting and important:
1. Wasa East
This is highly interesting – Visible Gold Mines‘ geologists are suggesting a possible connection between the Cadillac Fault and the Wasa Shear, two Gold-bearing systems that are on either side of the 700-hectare Wasa East Property that straddles part of the eastern boundary of Wasamac. Drilling will test for potential parallel zones of mineralization at Wasa East.
2. Wasa Creek
Several major developments:
a) Richmont’s Wildcat Zone, a south-dipping structure, has been traced to the south for more than 900 metres to three claims that form part of Visible Gold Mines‘ Wasa Creek Property. Hole LBWC-11-08 was drilled in a perpendicular direction in an effort to intersect the Wildcat Zone;
b) Further to the west, in the very first hole drilled at Wasa Creek, VGD has hit Gold mineralization including a 16.4-metre shear zone. This is particularly interesting because the company had virtually nothing to go on when it planned this hole – historical exploration in this area has, surprisingly, been almost non-existent. The hole featured several zones of mineralization at different depths, including some high-grade, in addition to “many sections” of anomalous Gold mineralization which clearly suggests they could be at the edge of something much more significant. VGD now has a trail – they just need to follow it;
c) Another hole, LBWC-11-04, collared 150 metres directly west of LBWC-11-03, showed a “very similar alteration style” to that observed in LB-11-03. The fact VGD stated they are “eagerly awaiting assays” for this hole is also code language that LBWC-11-04 looked very good visually. Assays on this hole are pending. Holes have also been completed 750 metres north of LBWC-11-03 and 300 metres southeast of LBWC-11-03;
d) And the action is intensifying. VGD has two drill rigs concentrating on the discovery area with step-out holes being drilled east and west of LBWC-11-03. In addition, a “wall” of holes is being drilled in a north-south direction east of LBWC-11-03 in order to test for parallel zones over a 1.5 kilometre stretch crossing the Cadillac Fault.
Does this story have “legs”, as they say in the business? You bet it does.
The map below, which was released today by VGD in conjunction with the news, shows the prolific Cadillac Fault going right through the middle of the Wasa Creek Property.
A few kilometres to the northeast of LBWC-11-03 is the Francoeur Mine. A few kilometres to the northwest of this hole is the Wasamac deposit. Visible Gold Mines is drilling in a rich geological environment, so one cannot discount the possibility of another major discovery in this area.
While it’s still very, very early in the game for VGD at Wasa Creek and Wasa East, this company has our attention more than ever after today. We’ll be following developments at Wasamac and the surrounding area with intense interest and in greater detail as the summer continues.
Today’s news from Visible Gold Mines came out near the end of the trading day but the stock responded quickly and gained 7 cents to close at 34 cents on total volume (all exchanges) of 261,000 shares. From a technical perspective, VGD is looking very strong with rising 10, 20 and 50-day moving averages. It started a new uptrend last month, gaining 49% in July. We’re now approaching mid-August and VGD seems to have caught fire again. Things could become even more interesting next week when Visible Gold Mines is expected to provide an update on the Joutel Project, 150 kilometres north of Rouyn-Noranda.
Richmont had another banner day despite Gold’s drop. RIC, which reported strong second quarter results Tuesday, closed at $9.02 for a gain of 26 cents. It’s one of our favorite producers with a growing production profile and a superb deposit shaping up at Wasamac.
Note: Jon and John hold positions in both Visible Gold Mines and Richmont Mines. Terry does not.
Thanks for this report on this afternoon’s VGD exciting news release – much appreciated.
Comment by Andrew — August 11, 2011 @ 3:12 pm
Yes guys thanks very much for the report, looks like I may get back to even on this one and hopefully more.
Also what impact if any do you think this will have on CQX?
THANKS
Comment by GREG H — August 11, 2011 @ 5:22 pm
CQX should start to move as well. Keep in mind, of course, they also hold 100% of 7 strategic claims adjoining the northern part of Wasamac (the structure dips to the north with mineralization widening at depth – parts of the Wasamac deposit could certainly extend onto Cadillac ground). My argument in recent months is that CQX should partner with VGD on these 7 claims – VGD has a lot more money and geological resources (people, drills, etc.) and can attack that property much more effectively. That would mean VGD and CQX together would surround Wasamac from all sides – north, south, east and west. Talk about a powerful play or, in hockey terms, one great “power-play”. This whole story is going to get a lot more interesting in my view. Don’t forget, Richmont has already announced it’s coming out with a Wasamac update before the end of the month.
Comment by Jon - BMR — August 11, 2011 @ 5:51 pm
Jon
do you think richmont has substancially increased their deposit from the 1.4 mil.?
Comment by GREG H — August 11, 2011 @ 8:28 pm
Yes I do. This has all the potential to develop into a much bigger deposit as Richmont fills the gaps between the different zones (the area between the Main Zone and Zone 1, for example, is mostly unexplored) and with mineralization widening at depth (in the Main Zone and elsewhere) as Richmont has already reported. They are also now drilling the optioned Globex claims (Richmont can earn a 100% interest), the eastern extension of the Wasa Shear Zone…..the theory is that the deposit extends to the east at depth to at least 1500 metres……if they hit over the Globex claims, then Richmont is definitely looking at an overall deposit of several million ounces or more in my view……..the strike length is impressive……I believe Richmont has kept this fairly low-key for fear of a potential takeover……as far as the Cadillac north claims are concerned, one could make the geological argument that the “heat engine” for this whole system could exist on their ground at depth….no one really knows until some deep holes are drilled there….don’t forget, this is the Abitibi – some massive deposits go a few kilometres deep…….there’s no question Wasamac is going to go into production – the question is, just how big is this going to be? It could be huge. Right now Richmont is thinking along the lines of 100,000 ounces+ per year over a minimum 10-year mine life but that could increase significantly as drilling continues and more discoveries are made….interestingly, the style of mineralization at Wasamac is similar to what VGD reported in hole #3 yesterday at Wasa Creek with close coexistence of gold and pyrite disseminated in an altered shear zone…….this entire area looks very, very interesting….
Comment by Jon - BMR — August 12, 2011 @ 2:37 am
SEC requests S & P to advise them ,who at S & P knew about the downgrade before it was announced.
Because the SEC is suspicious, you can be sure, where there’s smoke there’s fire.
I am waiting for the retail sales report this morning, i would like to see a good report, but a
good report will drag Gold & maybe the Venture down, so we are darned if we do & darned if we
don’t, but sometimes things turn out the opposite of one’s thinking. R !
Comment by Bert — August 12, 2011 @ 3:26 am
Retail sales (ex autos) for July up .05%. A good day for the Dow i suspect. R !
Comment by Bert — August 12, 2011 @ 4:32 am
Correctionnnnnnnnnnnnnnnnnnnnnnnn !
The U.S. retail sales up .5% & not .05%, my mistake, i am sorry. R !
Comment by Bert — August 12, 2011 @ 5:02 am
Good morning Jon, you’ve mentioned in the CQX summaries that you would let us know when you felt it was time to play that stock again. Do you think it is now or after more VGD drill results and some indication of further JV on balance of Cadillac lands? Thanks
Comment by Andrew — August 12, 2011 @ 5:30 am
Hi Andrew, I have a hunch we’re approaching a game-changing moment as far as CQX is concerned…keep in mind Richmont has announced they will be providing an exploration update on Wasamac later this month….I believe CQX will make a decision at that time which direction to go, to either strike a deal perhaps with VGD (or someone else) or go it alone on their Wasa claims….either way, I think we’re approaching the moment when these strategic CQX claims come into serious play….
Comment by Jon - BMR — August 12, 2011 @ 5:49 am
Okay, thanks alot Jon! Will you be visiting Cadillac this month?
Comment by Andrew — August 12, 2011 @ 5:59 am
You mean the CQX Wasa claims? It’s hard to miss them, they’re right off the main highway…….Wasamac has a great location…..depending on where Richmont is drilling, you can see a rig right from the main hwy…
Comment by Jon - BMR — August 12, 2011 @ 6:59 am
Thx for your comments JOn … re CQX and all of the other stuff as well:) cant wait for Christmas!!! not of course to offend anyone….
Comment by Jeremy — August 12, 2011 @ 1:52 pm
Hi Jeremy, Wasamac is going to be big, very big…..and I like how VGD has gone into the area so aggressively……all they need is one really stellar hole and look out……..2 rigs at Wasa Creek near LBWC-11-03 – they aren’t wasting time…..my hunch is these guys are going to hit……
Comment by Jon - BMR — August 12, 2011 @ 4:09 pm
I will be getting in touch with the CQX group as August progresses to try to get a feel for the direction they plan to go. With Wasamac now really beginning to emerge as a growing gold deposit, they have an incredible opportunity with their 7 strategic claims but of course it’s a wasted opportunity if money isn’t put toward those claims, as quickly as possible, for drilling and exploration…..VGD has $6 million in working capital and it seems only natural to me that CQX should partner with them on that project, for the benefit of both parties……Cadillac has got to understand that….
Comment by Jon - BMR — August 13, 2011 @ 8:18 am
Thanks Jon
for all of the above comments on the wasa area and CQX
Comment by GREG H — August 13, 2011 @ 8:06 pm