Equitas Acquires Turnkey Gold Mine For Near

January 15, 2016
Research #9
Gold Production
Nickel-Copper-Cobalt Exploration
Company Details
Equitas Resources Corp.
1450 - 789 W Pender Street
Vancouver, BC, Canada V6C 1H2
Phone: +1 604 681 1568
Email: [email protected]
www.equitasresources.com
Shares Issued & Outstanding: 78,299,294
Equitas Acquires Turnkey Gold Mine
For Near-Term Cash Flow Growth
While Getting Ready For Garland
Nickel Exploration
Today, Equitas Resources Corp. announced a proposed acquisition of
Alta Floresta Gold Ltd., a private British Columbia company, which
owns 6 gold properties and 4 production licences over 180,000 hectares
in the Brazilian states Mato Grosso and Para. Alta Floresta’s reputable
management and exploration team is set to merge into Equitas’. This
acquisition provides Equitas with a low-cost, small-scale gold mining
operation for immediate cash flow, whereas a proposed 3 phase mine
development plan is cited to increase mine output. Exploration at the
Garland Nickel Project is set to restart as early as February 2016 to test
3 remaining target areas of interest. Geophysics can make a difference
and play a key role for the next round of exploration.
T
he Cajueiro Project
encompasses
44,768
hectares and is located
95 km north of the city of
Alta Floresta in the Federative
Republic of Brazil. The project
straddles the border of the Para
and Mato Grosso states in the
prolific Juruena Belt of Brazil.
Chart
Canada (TSX.V)
Canadian Symbol (TSX.V): EQT
HALTED Price: $0.085 CAD (Jan. 14, 2016)
Market capitalization: $7 million CAD
Chart
Germany (Frankfurt)
German Symbol / WKN: T6UN / A12CWK
HALTED Price: €0.05 EUR (Jan. 14, 2016)
Market capitalization: €4 million EUR
Technical Analysis: http://schrts.co/MqtYO4
http://schrts.co/JagUKa
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Research #9 | Equitas Resources Corp.
Cajueiro Project Inferred Resources
According to today’s news:
“Alta Floresta Gold started processing
alluvial gold mineralization in the Baldo
zone in June 2015 with modest gold
production to date. Equitas Resources
intends to embark on a three phase
development plan at the Cajueiro
Property. First, the Company plans to
install a small gravity plant to process
the saprolite mineralization at the Baldo
zone.Once permits and the necessary
supply agreements are in hand, the
second phase of the plan envisions the
construction of a carbon-in-leach plant
between the Baldo and Crente zones.
These two zones are less than 1 km apart.
Initial metallurgical test work indicates
that in excess of 85% gold recovery can be
achieved through gravity separation and
cyanide leaching. The third phase would
be to increase production at the Cajueiro
Project under a full production licence.
The Company expects that this could be
funded through operating cash flow.”
With this transaction, Equitas can be put
immediately into a cash flow position,
which is set to increase significantly with
a 3 phase development plan. This could
mean that no further equity dilution is
targeted after the completion of the transaction. To achieve this, the plan is to put
the Baldo and Crente Zones into dual production through a CIL and gravity plants.
While Baldo already produces gold with
a “modest” rate, Crente is set to be tied
into the Baldo production during the next
months.
Alta Floresta is focused on expanding
the production activities and defining
additional gold resources at its Cajueiro
Project. Licence areas are highly
prospective, with previous artisanal
mining activity on the property. Historic
regional gold production of 7-10 million
oz within a recognized mining friendly
jurisdiction. Brazil is ranked 3/12 of
its regional countries for doing good
business.
Upon generating cash flow from the
new properties and implementation of
the business plan, Equitas should be in a
position to employ a roll-up strategy for
other high-quality assets in the region,
thus taking advantage of a distressed
Zone
Cut off
Grade
(g/t)
Tonnes
Gold
(million)
(g/t)
Contained
Oz Gold
To date, 48 drill holes for a
total of 11,292 m have tested
4 zones: Marines, Baldo,
Matrincha, and Crente.
0.3
5.3
0.8
127'400 to be tied into production next
Crente
0.3
1.4
1.3
61'100 in production
Baldo
0.3
1.6
1.1
52'900
Matrincha
0.3
1.2
0.7
27'200
Marines
TOTAL
268'600
PLUS Crente's indicated gold resource of 203'000
CRENTE ZONE Indicated Resources
Cut off
Grade
(g/t)
Tonnes
Gold
(million)
(g/t)
0.5
4.5
1.2
168'000
0.3
7.4
0.9
203'000
Contained
Oz Gold
CRENTE ZONE Inferred Resources
Cut off
Grade
(g/t)
Tonnes
Gold
(million)
(g/t)
0.5
3
1
100'300
0.3
5.3
0.8
127'400
Contained
Oz Gold
At the Crente Zone, the work
has outlined an indicated
and an inferred resource,
while inferred resources were
calculated for the Marines,
Baldo and Matrincha Zones.
All of these zones have near
surface oxide potential for expansion. Exploration over the
last 5 years has identified 5
further anomalies within the
property package that have
similar surface expression to
the Crente Target.
This resource estimate was prepared by Gustavson Associates of Boulder, Colorado/USA, in accordance with the definitions
in the NI43-101 effective March 22, 2013. Oz Au = Gold-equivalent ounces. All quantities are rounded to the appropriate
number of significant figures; consequently sums may not add up due to rounding. All resources reported above for the
Baldo, Matrincha and Marines zones are inferred resources. Mineral resources are not mineral reserves and do not have
demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into
mineral reserves.
resource market by way of turning a
market challenge into an outstanding
corporate opportunity. Chris Harris,
Executive Chairman and Director of Alta
Floresta Gold Ltd., commented in today’s
news:
“We are very pleased to finalise this letter
agreement with Equitas. This transaction
underlines the core value of the Alta
Floresta portfolio and especially of our fasttrack gold development target at Cajueiro
which is already in production. With the
depth of our combined management
team, we stand poised to create strong
value for shareholders as well as to bring
employment and business to Brazil. We
intend to build on our in-house portfolio
development pipeline, by acquiring
selected value accretive neighbouring gold
resources in Brazil to build a strong, cash
flow generating gold junior with attractive
growth prospects.”
Kyler Hardy, President of Equitas, added:
“In Alta Floresta Gold, we have identified
an excellent opportunity that will allow
us to leverage its current small scale, low
cost, gold production into a much larger
operation in the near future. By incorporating the highly skilled senior management
team of Alta Floresta Gold into Equitas, we
gain an experienced South American operating team that will advance the Cajueiro
Project. Following closing of the transaction, Equitas will be a stronger company
with quality gold and nickel assets as well
as cash flow. This transaction is in line
with our corporate strategy to acquire exceptional property holdings in highly prospective and proven districts. Equitas will
also continue an aggressive exploration
program on its highly prospective Garland
nickel property in the Voisey’s Bay district
in Labrador, Canada.”
An updated NI43-101 Technical Report
is being prepared for Equitas and will be
available shortly on www.sedar.com and
the company’s website.
3
Proposed Management of the
New Company
Subject to Exchange approval, on
completion of the Transaction, it is
proposed that the new management
be constituted from the 2 entities, with
the new board of directors and technical
management team being as follows:
Kyler Hardy – Chairman and Director
Mr. Hardy is a seasoned and successful
entrepreneur who has been involved
in mineral exploration and the mining
industry for over 15 years. He is a
founder and former CEO of a geosciences
and logistics management business
which specializes in the exploration
and development of projects in remote
areas. Mr. Hardy is experienced in project
generation, exploration management,
logistics, raising capital, corporate
development and developing alliances
and strategic partnerships.
Chris Harris – President, Chief Executive
Officer and Director
Mr. Harris has over 29 years’ experience in
mining finance, energy, and commodities
with multiple principal investments and
director roles and is a Fellow Chartered
Accountant (FCA). After qualifying at Ernst
& Young in London, Mr. Harris moved to
CIBC Wood Gundy in 1991, becoming
Director Project Finance in the Energy &
Utilities sector. After three years at Enron
Europe where he co-ran the European
Commodity Finance business, Mr. Harris
moved to BHP Billiton to run a global
mining merchant investment business for
eight years. He then spent three years
heading upstream investments for GMI
Resources, a shipping hedge fund. Mr.
Harris is co-founder of Alta Floresta Gold.
Alan Carter – Director
Dr. Carter has 30 years of experience in
the minerals exploration industry. He
spent seven years working for Rio Tinto
Corp. in South America and the United
Kingdom. Dr. Carter joined Billiton Plc
in 1998, and in 2000 moved from Lima,
Peru to Vancouver. Following the merger
of Billiton with BHP, he assumed the
role of Manager, Business Development
within the BHP Billiton Exploration Group.
He was the Chief Operating Officer of
Peregrine Diamonds Ltd. from mid-2004
Research #9 | Equitas Resources Corp.
to late 2006. Dr. Carter is currently CEO
and Director of Magellan Minerals Ltd,
and a director of Peregrine Diamonds Ltd.
He has a B.Sc. degree in Geology from
the University of Nottingham, and a Ph.D.
from the University of Southampton, U.K.
Michael Bennett – Technical Advisor,
Director and Officer of Alta Floresta
Mineração
Mr. Bennett is a senior geologist with
30 years of experience in the minerals
exploration industry (24 of these years in
South America). He is currently General
Manager for the Brazil Manganese Corp in
Rondonia Brazil, and was VP Exploration of
ECI Exploration and Mining Inc. from 2009
to 2014. He has been responsible for 3
gold discoveries in South America: Bolivia
- Puquio North (0.5Moz); Brazil - Coringa
(1.1Moz), and Cajueiro.
Everett Makela – VP of Exploration
Mr. Makela brings over 30 years of
exploration experience to the team. During
a career with Inco and Vale, Everett held
roles of increasing responsibility in settings
ranging from grassroots evaluations
to near-mine resource definition. He
excels at target generation, design and
implementation of exploration programs,
and the creation of joint venture and
alliance opportunities. Everett holds an
Honours Bachelor of Science in Geology
from Laurentian University, and is a
member of APGO, PEGNL, PDAC and SEG.
He retired from Vale as Principal Geologist,
North America in 2012.
David Hodge – Director
Mr. Hodge, President and Director of Zimtu
Capital Corp, has an extensive background
in business that includes over 20 years
of experience in the management and
financing of publicly-traded companies.
Mr. Hodge has been a director of mineral
exploration companies since 1986, and
some of his many strengths lie in leadership
and imaginative direction. His success has
been founded on a belief in team building,
consultation and strong leadership, as
well as a willingness to incorporate expert
advice into a viable working enterprise.
Transaction Summary
On January 15, 2016, Equitas Resources
Corp. announced to have entered into
a binding letter agreement to acquire
(the “Transaction”) all of the issued and
outstanding securities of Alta Floresta Gold
Ltd. (“Alta Floresta Gold”). A summary of
the transaction is as follows:
• Equitas will acquire 100% of the issued
and outstanding shares of Alta Floresta
Gold from its security holders in exchange
for that number of Equitas shares that
is equal to 100% of the issued and
outstanding Equitas shares at closing.
• Upon closing, (i) Alta Floresta Gold will
become a wholly-owned subsidiary of
Equitas, and (ii) former shareholders of
Alta Floresta Gold will hold approximately
50% of the outstanding shares of the
Company (without giving effect to any
issuances of Equitas shares prior to or
concurrent with closing). No new insiders
or control persons will be created as a
result of the Transaction.
• Each unexercised stock option in Alta
Floresta Gold will be exchanged for or
replaced with approximately 1.5 options
of Equitas at a price of $0.15 per share.
• Equitas Resources will segregate up to
USD$1 million to be applied on closing
exclusively to advance the Alta Floresta
Gold projects. Subject to TSX Venture
Exchange (the “Exchange”) approval,
US$300,000 of this will be advanced to
Alta Floresta Gold following completion
of Equitas’ technical due diligence and
licence review.
• Prior to closing, Alta Floresta Gold will
use commercially reasonable efforts to
become the legal and beneficial owner of
100% of the issued and outstanding equity
interests of Alta Floresta Mineração. Alta
Floresta Gold invested in Alta Floresta
Mineração in June 2014, under an
investment agreement (the “Underlying
Investment Agreement”) with ECI
Exploration and Mining Inc. (“ECI”), and
other ECI related parties, all of which
are at arm’s length to Alta Floresta Gold.
Pursuant to the Underlying Investment
Agreement, Alta Floresta Gold has the
right to farm-in to Alta Floresta Mineração
up to a 70% equity interest (currently
approximately 60% held), and has taken
operational control of the Alta Floresta
Mineração business and board. Alta
4
Floresta Gold has the right of first refusal
on any sale of the remaining ECI interest,
and has the ability through further unmatched investment, to dilute the ECI
interest down to a level (10%) at which the
ECI interest would convert to a 1.25% NSR.
The proposed Transaction is subject to a
number of terms and conditions, including
but not limited to (i) the entering into
by the parties of a definitive agreement
with respect to the Transaction (such
agreement to include representations,
warranties, conditions and covenants
typical for a transaction of this nature),
(ii) the absence of any material adverse
change in either party, (iii) the completion
of satisfactory due diligence investigations
by both parties, (iv) the approval of the
directors of each of the Company and
Alta Floresta Gold, (v) the completion by
Equitas of a private placement generating
minimum proceeds of $2,500,000 and (vi)
the approval of the Exchange. The parties
have agreed that during the period from
signing the letter agreement through to
execution of the definitive agreement,
each of the parties will continue their
respective operations in the ordinary
course and will not solicit or accept
alternative offers. Subject to satisfactory
completion of due diligence, the parties
expect to execute the definitive agreement
by January 31, 2016 and have agreed
to use their best efforts to complete the
Transaction by February 19, 2016 or as
soon as reasonably practicable thereafter.
The proposed Transaction will constitute
a Reviewable Transaction pursuant to the
policies of the Exchange. The proposed
Transaction is an arm’s length transaction.
The Company will not be required to obtain
shareholder approval of the Transaction.
Further details concerning the Transaction
will be announced if and when a definitive
agreement is reached.
Highlights of the Transaction
1. Low-cost, small-scale alluvial gold
production (using sluice box recovery) for
immediate cash flow generation including
significant expansion plans.
Research #9 | Equitas Resources Corp.
to install a gravity plant to mine the
saprolite material which may increase
production significantly. Phase 2 is to put
the Crente and Baldo Zones into dual
production through a shared CIL plant
(potentially significant cost efficiencies).
The phase 1 gravity plant will be located
at the front-end of the process to enhance
recoveries. Phase 3 is planned to expand
these facilities once a full mining license is
obtained; thus potentially increasing gold
production significantly.
4. The Cajueiro Project has a 2013
Resource Estimate compliant with NI43101 in 4 zones: Inferred total of 268,600
oz, and indicated total of 203,000 oz gold
at 0.9 g/t (at a 3 g/t cutoff).
5. Large Brazil land position with total of
>180,000 hectares within 6 properties,
which all (except of 1 project) are on the
same gold belt. 4 mining licenses on several
of them already acquired. Good logistics
position, close to Alta Floresta (large town
incl. airport) and close to a public highway.
Access is good and keeps the supply of
equipment and labor reasonably priced.
6. Significant exploration upside. Only 5
areas on Cajueiro have been drill tested
already with 5 further areas being still
untested (but similar gold anomalies to
Crente).
7. Upon achieving cash flow on the new
properties and implementation of the
business plan, Equitas can employ a rollup strategy for other high quality assets in
the region; thereby taking advantage of a
distressed resource market by way of turn
ing a market challenge into a corporate
opportunity.
8. The proposed merger would strengthen
Equitas’ management team because an
impressive track record in South America
and globally, building significant assets
and companies, is added.
2. First production permits in place.
9. Alta Floresta holds 60.1% of Alta Floresta
Gold Mineracao, with rights to farm-into
70%. Ability to dilute through follow-on
investing and with first right of refusal to
add up to 39.9%.
3. Current production at Baldo since
June 2015 is “modest”. Phase 1 plans
10. Historic regional gold production
of 7-10 million oz gold in a recognized
mining friendly jurisdiction. In the
Cajueiro area alone, estimated 250,000
oz gold produced by artisanal mining from
placer deposits. Brazil is ranked 3/12 of its
regional countries for doing good business.
With the devaluation of the Brazilian Real,
mining costs on a USD equivalent basis
have fallen significantly.
11. Equitas has enough cash in the bank
to continue (as early as mid-February) its
focused exploration at its 100% owned
Garland Nickel-Copper-Cobalt Property in
Labrador, close to the Voisey’s Bay Mine.
2015 Recap & 2016 Outlook for
the Garland Nickel Project
In February 2015, Equitas announced the
start of its exploration program with a
VTEM study over the entire 25,000 hectare
Garland property, which was consolidated
in 2014.
In March, the VTEM study was completed.
In April, initial inspection of the VTEM
data has identified 4 distinct areas of
anomalous conductivity prospective for
nickel-copper sulphide mineralization.
In May, final results from the VTEM survey
were announced, identifying a total of 9
areas of conductivity.
In June, Raymond Goldie (Vice President
and Senior Mining Analyst with Salman
Partners Inc., author of “Inco Comes To
Labrador”) was appointed to its board of
directors.
In August, the phase 2 field program
kicked off with field crews arriving at the
25-person field camp.
In September, Equitas has acquired
additional claims to the west due to new
results from ground geophysical work
completed over the summer. A total of 12
target areas have now been identified and
the company has commenced drilling.
In October, 4 holes were completed at
anomalies D, C, J and Q.
In December, Equitas provided an update
of the phase-1 drill program having
completed 5 holes totaling 1678m so far.
5
Targets A, B, C, G, H, I and J have been
considered of no further interest. With
the upcoming drill program, the 3 targets
O, P and M may get drilled for the first
time, whereas both targets Q and D may
see a follow-up drilling as both holes have
returned favorable geology indicative of
massive sulphides in proximity.
Target #1: Something Massive Beneath
Target B at the Cominco Showing?
While target B is of no further interest,
near-by hole GP15-005 has intersected
disseminated pyrrhotite-chalcopyrite-pyrite over a 69m interval from surface and is
now a top priority for the 2016 exploration
program. It was drilled to a depth of 163m
to sample an historic showing of Ni-Cu-Co
in gabbro-norite, known as the Cominco
Showing. Values of up to 0.15% nickel and
0.10% copper were reported by Cominco
Ltd. in 1995 from surface sampling of a NE
trending area of gossan 125m in length
and up to 20m wide. GP15-005 assayed
0.08% nickel and 0.1% copper over
4,6m (at 20m depth), 0.11% nickel and
0.14% copper over 1.5m (at 55m depth).
Research #9 | Equitas Resources Corp.
Drilling at the Cominco Showing has shown
60m of disseminated, low-grade nickel and
copper mineralization near surface. As can
be seen from below cross-section of the
Voisey’s Bay Deposit, disseminated mineralization occurs near surface as well at
Eastern Deeps, whereas massive sulphides
occur beneath it at a depth of ~600m. Hole
GP15-005 was only drilled to a depth of
163m which opens up the potential for highgrade (massive) sulphides at depth in proximity. VP Exploration Everett Makela stated:
“Although no semi-quantitative estimates
for grade potential can be made due to
the relatively low sulphide concentrations,
results to date lend some encouragement
for the possibility of there being an economic
6
deposit associated with this mineralization.
Observations of the core indicate a
dynamic component to emplacement,
including
recognizable
inclusions,
textural and compositional variations.
Isolated plagioclase feldspar megacrysts
display rounding, possibly indicative of
transport from an underlying chamber,
an environment favourable for massive
sulphide deposition. The area warrants
further examination, and a detailed surface
Crone PEM survey is planned as a top
priority for the 2016 exploration program.”
According to Kyler Hardy in an interview
with Investingnews.com on December 23,
2015:
“One of the more significant events is the
fact that we did get sulfides from surface
in hole GP-15-005 [which] was the fifth of
five holes completed at the Garland, and
is situated on the Cominco showing, which
is historic from Teck Cominco’s work in the
area. Equitas encountered disseminated
sulfides in this hole to depths of about 69
meters that leads us to believe that we
could be in a similar system to the Voisey’s
Bay mine. Disseminated sulfides are a
targeting tool and a fantastic indicator
of a possible major nickel sulfide deposit.
A disseminated halo associated with a
massive economic deposit is a common
feature of many ore environments. We
now must get back onto the property and
find out where these disseminated sulfides
could have come from.”
Target #2: A Complex Anomalous
Downhole Geophysics Response near
Target Q
Hole GP-15-004 at target Q was cored
to a depth of 495m. Downhole crone
PEM geophysics produced “a complex
anomalous response that could indicate
a good quality conductor in or near the
hole”, said geophysical consultant Alan
King. “A detailed PEM re-survey of the hole
will be conducted to validate the response
in advance of drill testing when the field
program resumes in Q2 2016”, he said. VP
Exploration Everett Makela commented:
“While by no means a sure thing, the
interpreted size, conductivity and depth
accords well with our model for buried
Voisey’s Bay analogues. This will be a first
Research #9 | Equitas Resources Corp.
priority for the next phase of exploration in
Q2 of 2016. We plan to re-position the drill
rig on the hole and complete a detailed
Crone PEM downhole survey to confirm
the response before drill testing.”
According to Hardy as per the earlier
mentioned interview:
“A possible off-hole response in anomaly Q.
We had to conduct downhole geophysics
on it twice, but what we are seeing is a
possible significant off-hole anomaly about
50 meters off. A detailed resurvey of the
hole needs to be completed to resolve any
ambiguity. The modeling indicates that if
the response is real, it fits very well in size,
conductivity and depth with our exploration
model. The area will be one of the first
that Equitas returns to in the new year.”
Target #3: Large Parts in the North
Another focus for further exploration was
defined by synthesis of regional and property scale magnetics, ground gravity and
geological data. The major E-W lineament
in the northern portion
of the property has
been interpreted by
consulting geophysicist Alan King as representing the southern
margin of the graben
structure hosting the
Voisey’s Bay mine, considered to have been
emplaced along the
northern wall of the
graben. This structure
on the Garland property is coincident with
VTEM anomalies D, O
and P, as well as a NiCu-Co lake sediment
anomaly comparable
to the anomalies adjacent the Voisey’s Bay
mineralization.
According to Hardy
as per the earlier
mentioned interview:
“Interpretation of the
large E-W lineament
in the northern portion
of the Garland gives
added weight to VTEM Tau anomalies O,
P and D. The adjacent lake has a nickelcopper-cobalt anomaly on the scale of the
lakes east of the Voisey’s Bay mine. Target
D was part of the five holes drilled, but due
to the hole being strategically placed on
practically the side of a cliff the geophysics
could not be conducted. As soon as the lake
freezes Equitas will conduct geophysics
over the entire lake.”
Bottom Line:
As Rockstone concluded on December 16,
2015, in “The Pathway To Discovery”:
“So-called “scout” or “pathfinder” holes
have the purpose to explore a previously
untested area in a preliminary manner.
Typically, scout holes supply valuable
information for follow-up drilling, which
is the case for 3 of the 5 scout holes
completed. Equitas now has 3 solid
exploration focus areas for the next
exploration program that is scheduled to
commence as early as mid-February. The
systematic program, which was designed
for the exploration of Garland, has now
7
proven their theory of the potential for
buried Voisey’s Bay analogues. The midway point of the completed drill program
has shown that Equitas is on the right
track, which is the pathway to discovery.”
The near-by Voisey’s Bay Deposit was not
discovered with the first drill hole. It was
the second one. As Equitas has drilled 5
totally different locations so far with 1 hole
each, a 2nd hole at the Cominco Showing
and/or at targets Q and D may, or may not,
bring about assay results some shareholders
have been hoping to achieve with the very
first holes. Furthermore, the 3 anomalies
O, P and M are likely to get drilled for the
first time with the upcoming drill program.
Hardy concluded in the earlier mentioned
interview:
“In our minds, the Teck Cominco showing,
and then the Q off-hole response and then
the correct geotectonic framework at O, P
and D — that’s the general flow of things
that we want to go into [moving forward].
We’ll also continue working on groundbased geophysics, exploration and further
drilling. Oone key note that needs to be
shared is the fact that the VTEM survey
spacing was 300 meters wide, for reasons
of economy; a 200-meter survey spacing
for the relatively small footprints of nickel
sulfide targets is better. We have now zoned
in our areas of the property where we can
conduct more detailed geophysical surveys.
One thing that we were very adamant
about with investors early on in this
process was that the Garland is very much
a grassroots project — we’re starting from
scratch, basically — and if we don’t find
anything in our first pass of exploration
we’ll be brutal and pull the plug on it
immediately. The company would rather
direct its money at properties with a high
chance of exploration success. Since day
one, Equitas’ highly technical team has
evaluated over 60 properties, and will
continue to do so. Our team is highly skilled
at evaluating projects at all different levels
of development. We have always been
transparent with our shareholders that we
intend on having several projects on the go
throughout the year. We are highly excited
with the progress at the Garland, but at
the same time realize we can’t drill year
round until we have a discovery.”
Research #9 | Equitas Resources Corp.
According to Jacquie McNish in “The Big
Score: Robert Friedland, Inco, and the
Voisey’s Bay Hustle” (1998):
“The first days of drilling at Voisey’s Bay
were not happy ones... Hole No. 1 on
the western edge of the hill showed only
marginally encouraging results. After a
long day of drilling they had penetrated 40
metres below the surface but had drawn up
only lengths of grey core with minute traces
of minerals... A good assay from a drill core
can send penny-stock prices to the moon;
negative results send them into a tailspin.“
A more recent example of how long it
may take to make a significant (massive
sulphide) discovery is Sirius Resources:
In July 2012, Sirius announced discovery
hole SFRC0024 intersecting 4m of massive
sulphide mineralization (3.8% nickel and
1.42% copper at 191m depth) at its Fraser
Range Project in Western Australia. The deposit has then been named the Nova Deposit. Drilling an “eye feature” is how Sirius discovered the deposit that took them
from $0.05 to $5 in a matter of months.
Yes, that’s a 100 bagger. In fact, Sirius went
from $2 to $5 in just a matter of days following their second discovery, the Bollinger
Deposit (200m east of Nova), intersecting
4.8m of 4.6% nickel, 1.29% copper and
0.19% cobalt at 434m depth. In 2015, Sirius
was taken over by its larger rival, Independence Group, in a $1.4 billion transaction.
to make a discovery, respectively to hit the
main ore body.
Sirius did not discover Nova with its first
drill hole. It took them almost 2 years
(including 6 RC holes with “encouraging
assays”, 120 RAB/aircore holes, and many
geophysical studies) to finally pull out
discovery hole SFRC0024 in mid-2012,
according to below recap:
“In November 2010 Sirius completed a
200m x 80m soil sampling programme
over a 4km long southwest-northeast
orientated oval shaped airborne magnetic
feature…
The magnetic feature because of its eyelike appearance has been colloquially
called the “Eye” with the core of the Eye
interpreted at the time to be a dome or
plug of ultramafic rocks or a layered maficultramafic intrusion.
Sirius Resources on the ASX
While the Nova Deposit is a different nickel
deposit type than Voisey’s Bay, it sure does
show that discoveries are usually not made
with the very first hole. Discovery is a highly
technical process, especially with blind deposits at depth with target mineralizations
being relatively small but high-grade. For
example: With Uranium exploration in the
Athabasca Basin, where deposits are typically very small in dimensions (but very
high grade), it oftentimes takes +50 holes
In September 2011 a traverse of six RC drill
holes was completed across the Ni-Cu-Co
anomaly to determine preferred locations
for a follow-up diamond drill hole to be
co-funded by the Government of Western Australia. Fine grained disseminated
sulphides including chalcopyrite, pyrrhotite and pentlandite were identified in the
regolith overlying metagabbro/gabbronorite bedrock.
8
In May 2012 a RAB/aircore drilling
programme together with a ground
moving loop electromagnetic survey
(“MLEM”) was completed to delineate
targets at depth for drill testing. The RAB/
aircore drilling consisted of 120 holes on
400m line spacings and 160m or 80m hole
spacings drilled to the base of the regolith
over the eye shaped airborne magnetic
feature. The drilling programme identified
a broad area of lateritic nickel-cobalt
enrichment and several holes intersected
significant (0.5 to 1.0% Ni) nickel-copper
mineralisation at or near to the end of hole
suggesting that some of the nickel in the
laterite may have been derived from the
oxidation of primary magmatic sulphides
rather than just through the weathering
enrichment of ultramafic rocks.”
Research #9 | Equitas Resources Corp.
together and track record of successfully
discovering and developing ore bodies
from a very grassroots stage through
to production is absolutely amazing.
Our board, which is comprised of a
healthy mix of corporate, financial and
technical backgrounds, is second to none
in the industry. One major factor that
helps us stand out amongst our peers
is our cornerstone investor, Zijin Mining
(through their subsidiary). Since we took
control of Equitas, Zijin held a significant
stake in EQT. We have kept them abreast
and they have followed our developments
and have congratulated us on reaching
pivotal moments of our early stage
developments. Like us, they hope we
have a major discovery at the Garland
Property. There could be potential large
synergies in the future if the right moment
or opportunity comes into the fold.
What gets you excited about Equitas’
value proposition at these levels?
I had a chance to sit down with Kyler
Hardy of Equitas Resources (TSXV:EQT)
recently and here’s what he had to say
about the future outlook of EQT.V: Can
you please give our subscribers a brief
explanation of what makes Equitas
stand out from most other junior
exploration companies?
Honestly, in regards to the Garland Project,
everyone wanted to see us knock it out
of the park in terms of our results in the
first round and that would have obviously
been fantastic, but we are not there just
yet. We did find significant idicators that
warrants further exploration but to save
shareholder’s investment dollars we opted
to wait for better weather conditions.I will
argue that this positions EQT in a much
better place strategically to create even
more value for our shareholders over
time. We found evidence of a potentially
very significant system on three different
locations so the chances of a potential
discovery has increased significantly
since we first started with the property.
The thing that differentiates us most
amongst the crowd is our management
team. Myself, I’ve built and sold a number
of businesses not just in the natural
resource sector but outside the sector
as well, both publicly and privately so I
consider myself a company builder and a
successful entrepreneur having generated
substantial profits for my shareholders
over my career. Everett Makela, our VP
of Exploration, has had a long and a very
successful career working with two majors
in the industry (one that took out the other).
His sphere of influence, ability to put deals
The opportunity for investors is being
led by our capable management team,
our business plan and our intense
focus on building the company into a
significant player in the industry. This
vision is very much alive and progressing
extremely well. Our number one focus
is to build shareholder value. Let’s face
it, I’ve invested a lot of my own money
into Equitas along with the rest of our
management team and personal contacts
over the last twelve months and there is
no way we’re going to let this die on the
vine just because we haven’t yet hit a
Recently on December 23, 2015, Kyler
Hardy (EQT’s President) was interviewed
by Etienne from Alphastox.com, which is
reprinted below:
major discovery hole in our first phase of
systematically exploring. You need tenacity
to succeed in this market and perseverance
to build a successful company no matter
what industry you’re in and that’s exactly
what we’re driving to do with Equitas.
EQT has been one of the most active
stocks on the Venture over the last
several months and has performed
extremely well since we first featured it
to subscribers. What do you think gets
investors so excited about the story in
this market?
The Voisey’s Bay discovery was a huge
win for investors, the market and
Canada so the chance of us discovering
buried Voisey’s Bay-style deposits on our
property is there, but the other thing has
to do with the general honesty and nature
of how our management team works and
how we have put this deal together in the
first place.
Our whole team, from top to bottom,
works hard every day including weekends
with one goal in mind and that is to
build value for our shareholders- all the
way from Sean Kingsley, our corporate
communications on the phones everyday
sharing our story and opportunity to
potential investors, to our technical team
led by our VP Exploration Everett Makela,
to Ray Goldie, one of the most successful
mining analysts on Bay Street who has
recently came on as a Director and has
provided us with significant insight with
many of the decisions we make in the field
and in the market. At the end of the day,
investors see us as being able to execute
on what we say we’re going to do.
We have the ability, tenacity and the
wherewithal to make something from
nothing and build it into one of the greatest
plays in the market because we’ve done
it before and intend to do it again. For a
market point of view the liquidity allows
investors to see that they can get in and
out of our stock on any given day without
hurting the market which is something
so many juniors on the TSXV lack these
days. We strive to build the company
so our shareholders and potential
investors believe in our capabilities and
opportunities to grow the company to be
a contender.
9
Can you please tell our readers why you
feel you have one of the best teams to
make another major Voisey’s Bay-like
discovery?
Well, honestly, all of it has to do with our
team. There are members that the public
might never hear of from our drillers that
drilled the original Voisey’s Bay discovery
to Dan Lee our consulting geologist that
ran the Archaen Resources base camp
and mentored the guy currently at the
Voisey’s core shack. Alan King was a part
of the ‘Green Team’ Inco sent in to debunk
the original Voisey’s Bay discovery which
the team sadly reported back it’s the
‘real deal’. To Everett Makela which ran
Vale’s North American exploration team.
Heck, even Ray Goldie wrote a book
about the Voisey’s Bay while he was an
analyst. These guys have been following
and exploring the area for decades; they
understand what nickel sulphide deposits
look like, how they are formed and they
understand what other deposits look like
not just nickel ones so if something else
pops up in the area – like Robert Friedland
experienced while looking for diamonds,
we have the right technical team to tackle
and develop any system present in the
area. The quality of our management
team and our technical leadership is
second to none in the industry because
we understand the area and have a
global knowledge of how to seize the
right opportunity on a global scale both
from an entrepreneurial standpoint and
from a big company perspective. These
guys know exactly what majors look for
before deciding to potentially buy a junior
and they’re doing everything they can to
position Equitas as potentially being that
target over the next 18 to 24 months.
What can investors look forward to
over the next 6 to 12 months?
Well, there are a few things: we’ll be
going back into the Garland as soon
as we can for our Phase 2 program as
we discussed before. There may also
be additional developments going on
with the company not Garland related.
We do see the possibility of potentially
closing on a significant acquisition or
property deal to increase the size of our
portfolio and diversify our risk. We may
even look to venture away from strictly
Research #9 | Equitas Resources Corp.
focusing on grassroots plays and focus on
a development project sometime in the
early New Year. We’re very excited about
making a potential discovery and building
shareholder value and that is our number
one focus but also agree during the tough
market conditions cash is king. I think over
time, investors will be very happy to be
a part of our progress and see the value
we’re working on generating.
Why should investors look at EQT.V as
a potential addition to their speculative
portfolio?
Again, I keep coming back to this with
whomever I talk to: management,
management, management. The market’s
perception of our initial results wasn’t
spectacular even though we considered
them a significant technical success,
but, having said that, management is
constantly working for our shareholders.
We continue to support and have invested
a significant portion of our own dollars into
this company and we’re going to continue
building it. Management have positioned
ourselves and we’ve been net buyers
from day one which should give investor’s
confidence that we’re in this for the long
term and believe in the future viability of
the company we set out to build.
This is a play led by an incredible
technical and financial team backed by
a group of investors that understand the
capital markets and know how to build
real shareholder value. We have been
evaluating over 60 projects world-wide
this past year. We are highly excited and
focused on thoroughly and systematically
exploring the Garland but at the same
time admit, economically, we shouldn’t
drill year round until we do have a major
discovery there. We have always been
transparent with our investors that we
intend on creating a portfolio of valuable
assets and that’s what we intend on doing
for them.
Read more at original source:
www.alphastox.com
Alphastox.com brings investors the latest news,
market commentary & analysis on the junior
markets. Stay informed to reach higher profits!
Disclosure: Transcend Capital Inc. has been paid
a consulting fee for conducting an independent
review of the company.
About Equitas Resources Corp.
Equitas Resources Corp.’s objective is to
create shareholder value through new mineral
discoveries. With a strong management team
in place and excellent strategic partners to
support the company‘s success, Equitas is
primed to execute its mandate to explore and
make a discovery in a region which already
has a major world renowned nickel mine in
operation. The company’s strategy was to
acquire projects that have historically been
fragmented and unconsolidated. This was the
case in the Voisey‘s Bay region and Equitas was
able to consolidate a land position in the region
which lead to the acquisition of the Garland
Project, which sits approximately 30km from the
famous Voisey‘s Bay Mine owned by Vale. This
is the first time this area has been consolidated
under one owner. The property has never
been drill tested and has only seen cursory
surface work using outdated techniques. The
exploration goal is to use new technological
advancements and sound geological principles
to validate management‘s theories for the
property that can lead to a significant discovery.
Analyst Coverage:
Research #8 “The Pathway To Discovery“
(December 16, 2015)
Research #7 “Voisey‘s Bay 2.0“ (October 21,
2015)
Research #6 “Equitas Starts Drilling and
Triggers Buying Rush“ (September 24, 2015)
Research #5 “Kingsley Arrives at Equitas‘
Garland Base Camp“ (September 10, 2015)
Research #4 “Early Warning Report on Equitas
Resources“ (September 2, 2015)
Research #3 “Beyond Our Wildest Dreams
(Revisited)“ (June 26, 2015)
Research #2 “King & Makela Identify 9 KnockYour-Socks-Off-Targets near Voisey`s Bay
Nickel Mine“ (May 13, 2015)
Research #1 “Vale Vale! Ex-Vale‘s Principal
Geologist and Chief Geophysicist on the Case
to Answer the Multi-Billion-Dollar-Question“
(April 20, 2015)
10
Disclaimer and Information on
Forward Looking Statements:
All statements in this report, other than
statements of historical fact should be considered forward-looking statements. Much
of this report is comprised of statements
of projection. Statements in this report
that are forward looking include that base
and precious metal prices are expected to
rebound; that Equitas Resources Corp. or
its partner(s) can and will start exploring
further; that exploration has or will discover a mineable deposit; that the company
can raise sufficient funds; that any of the
mentioned mineralization indications or
estimates are valid or economic. Such statements involve known and unknown risks,
uncertainties and other factors that may
cause actual results or events to differ materially from those anticipated in these forward-looking statements. Risks and uncertainties respecting mineral exploration and
mining companies are generally disclosed
in the annual financial or other filing documents of Equitas Resources Corp. and similar
companies as filed with the relevant securities commissions, and should be reviewed
by any reader of this report. In addition,
with respect to Equitas Resources Corp., a
number of risks relate to any statement of
projection or forward statements, including
among other risks: closing of the proposed
transaction with Alta Floresta Gold Ltd.; the
receipt of all necessary approvals and permits; the ability to conclude a transaction to
start or continue exploration; uncertainty of
future base and precious metal prices, capital expenditures and other costs; financings
and additional capital requirements for exploration, development, construction, and
operating of a mine; the receipt in a timely
fashion of further permitting for its legislative, political, social or economic developments in the jurisdictions in which Equitas
Resources Corp. carries on business; operating or technical difficulties in connection
with mining or development activities; the
ability to keep key employees, joint-venture
partner(s), and operations financed. There
can be no assurance that such statements
will prove to be accurate, as actual results
and future events could differ materially
from those anticipated in such statements.
Accordingly, readers should not place
undue reliance on forward-looking information. Rockstone and the author of this
report do not undertake any obligation to
update any statements made in this report.
Research #9 | Equitas Resources Corp.
Disclosure of Interest and
Advisory Cautions:
Nothing in this report should be construed
as a solicitation to buy or sell any securities
mentioned. Rockstone, its owners and the
author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult
with your financial advisor and a registered
broker-dealer. Never make an investment
based solely on what you read in an online
or printed report, including Rockstone’s report, especially if the investment involves a
small, thinly-traded company that isn’t well
known. The author of this report is paid by
Zimtu Capital Corp., a TSX Venture Exchange
listed investment company. Part of the author’s responsibilities at Zimtu is to research
and report on companies in which Zimtu
has an investment. So while the author of
this report is not paid directly by Equitas Resources Corp., the author’s employer Zimtu
will benefit from appreciation of Equitas Resources Corp.’s stock price. In addition, the
author owns shares of Equitas Resources
Corp. and would also benefit from volume
and price appreciation of its stock. In this
case, Equitas Resources Corp. has one or
more common directors with Zimtu Capital
Corp. Thus, conflicts of interests exist. The
information provided herewithin should not
be construed as a financial analysis but rather as advertisment. The author’s views and
opinions regarding the companies featured
in reports are his own views and are based
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do not access this website or any of its
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the Disclaimer, you are deemed to have
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Analyst Profile and Contact:
Stephan Bogner (Dipl. Kfm., FH)
Mining Analyst
Rockstone Research
8050 Zurich, Switzerland
+41-44-5862323
[email protected]
Stephan Bogner
studied at the
International School
of Management
(Dortmund,
Germany), the
European Business
School (London)
and the University of Queensland
(Brisbane, Australia). Under supervision
of Prof. Dr. Hans J. Bocker, Stephan
completed his diploma thesis (“Gold In
A Macroeconomic Context With Special
Consideration Of The Price Formation
Process”) in 2002. A year later, he
marketed and translated into German
Ferdinand Lips‘ bestseller („Gold Wars“).
After working in Dubai for 5 years, he
now lives in Switzerland and is the CEO of
Elementum International AG specialized
in duty-free storage of gold and silver
bullion in a high-security vaulting facility
within the St. Gotthard Mountain Massif
in central Switzerland.
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