Falcon Gold, #copper + #gold + #nickel + #lithium…

Everyone is chasing tech stocks like Nvidia, Microsoft & Amazon. To say that few people are interested in metals & mining would be a gross understatement. Gold recently hit an all-time high, yet the world’s largest producer Newmont is 36% below its 52-week high & 61% below its all-time high.

This narrative will not last, the world needs A LOT more metals. McKinsey & Company forecasts global demand for copper (“Cu“) to reach 36.6M tonnes by 2031, an 8-yr CAGR of +5.6%. That compares to ~2.5%/yr. since 2000. McKinsey expects global supply in 2031 to fall short by 6.5M tonnes.

Falcon Gold (TSX-v: FG) / (OTCQB: FGLDF) is positioned to benefit Cu at $4.15/lb., nearly a 1-yr. high, and from a strong bounce in the gold (“Au“) price, which topped $2,200/oz., before sliding back to ~$2,164/oz. (Apr-Futures price). Nickel (“Ni“) is up to almost $18k/tonne from ~$16k/t.

Sometimes companies like Falcon Gold with many properties, projects & metals, fail to receive credit for more than just a few assets. However, secondary properties take on new importance in bull markets. Management is better able to farm out, JV or spinout projects in B.C., Newfoundland & Ontario.

Falcon is a tiny company, but it packs a powerful punch. It has ample Au & Cu opportunities, but also Ni & lithium (“Li”) Simply put, Falcon has a lot of irons in the fire, including near-term drilling, yet its enterprise value {market cap + debt – cash} is just C$5M {C$0.04/shr. stockwatch 3/15/24 close}.

A current focus is the 100%-owned, 2,275-hectare Great Burnt [“GB“] Cu project, in Newfoundland. It is in the Great Burnt Greenstone Belt, which hosts massive sulfide lenses that can be meters thick and extend for several km.

Management has received a drilling permit to test up to 10 geophysical anomalies with ~1,100 meters. Why is this exciting?

And, Benton Resources is earning a 70% interest in its (same name) Great Burnt project from Spruce Ridge. One look at Benton’s presentation & press releases is telling… It’s all about Great Burnt! If one ascribes 3/4’s of Benton’s entire valuation to its Great Burnt project, that’s $42M (on a 100% basis).

Importantly, Falcon’s claims overlie the northern continuation of the conductive trend associated with lithologies hosting the Cu-rich Great Burnt & Au-rich South Pond deposits held by Benton.

Great Burnt Project ​– Falcon claims in orange and Benton – Spruce Ridge ​JV in blue

Drilling by Benton & Spruce Ridge has returned bonanza intervals [unless indicated otherwise, true width ~70%]; 27.2 meters of 8.1% Cu, 26.9 m / 7.2% Cu, 25.4 m / 5.5% [true width ~90-95%], 22.8 m / 6.9%, 20.9 m / 6.2%, and 24.0 m / 5.8%. These grades [for widths > 10 m] are in the Top-5 globally since 1/1/23.

Benton’s Great Burnt has a NI 43-101 compliant 72M pounds of Cu at a very robust grade of 2.85%. As that resource expands, it will draw even more attention to Falcon’s bordering position. Benton’s stated goal is a 30-40M tonne deposit at its Great Burnt. Results from a 4,000-meter drill program underway by Benton should add more fireworks.

NOTE: Drill results by Benton/Spruce Ridge are not indicative of what Falcon might uncover in its drill program.

There are also interesting Au values on Benton’s footprint, incl. intercepts of 10 to 51 m of 1.3 to 2.4 g/t Au. On Falcon’s ground, airborne electromagnetic + magnetic signatures show numerous priority targets that have never been drilled.

The Company’s GB is ~4 km west of the Exploits Subzone which contains deep-seated, Au-bearing structures of the Dog Bay-Appleton Fault-GRUB Line deformation corridor.

New Found Gold’s ultra-high-grade Queensway (27.0 m @ 105 g/t + 20.5 m @ 86.2 g/t) & Sokoman Minerals’ Moosehead projects (9.0 m of 70.3 g/t Au + 11.9 m of 45 g/t Au) are in the Exploits Subzone. Look at the map, Moosehead is very close. Even if Falcon’s GB is worth just a third of Benton’s Great Burnt, that would be ~$14M vs. Falcon’s valuation of $5M.

CEO Karim Rayani commented,

“The Great Burnt camp is becoming recognized for its high-grade copper tenor. Benton’s ongoing success at Great Burnt and recent news from FireFly Metals Ltd. on its high-grade Green Bay Cu-Au project in the Rambler camp, is putting the copper potential of promising VMS deposits in Newfoundland front & center.”

Austratlian-listed Firefly Metals’ Green Bay project, ~150 km from Falcon’s GB, has booked ~1.6 billion pounds, at an impressive 1.83% Cu. Firefly has another of the Top-5 drill intercepts [of > 10 M], it booked 46 m at 4.57% Cu.

Falcon’s Golden Brook project covers > 40,000 ha in central Newfoundland and is sandwiched between Big Ridge Gold’s & Matador Mining’s 1.4M (@ ~2.4 g/t Au) & 610k (@ ~2.0 g/t Au) ounce projects. B2Gold owns 9.6% of Matador.

Calibre Mining (C$1.3B mcap) has a 5.1M oz. (@1.8 g/t Au) development project ~100 km east of Falcon’s Golden Brook. It has a Bank Feasibility Study (“BFS“) with an after-tax NPV(5%) of US$919M, and IRR of 28.6%, at a gold price of $1,900/oz.

The AISC of ~$1,050/oz. is attractive, and the ratio of NPV/cap-ex = 2.0x. This mine is starting operations in 1H 2025, which will draw a lot of attention to central Newfoundland.

Newfoundland is well-known for Au, will it soon be recognized for its Cu endowment? And, what about Ni & Li? Falcon’s Golden Brook remains a promising Au target, but is also < 10 km from the Vinland Lithium JV that Piedmont Lithium invested in at an implied valuation of ~C$20M.

Successful exploration, particularly in the Kraken zone, revealed critical & rare-earth metals including; lithium, lanthanum, tantalum, niobium, beryllium, zirconium, tungsten, molybdenite & bismuth. The best Li intercept at the Vinland JV is a solid 1.04% Li2O over 15.2 m, incl. 4.2 m of 1.48% Li2O.

Another of the roughly dozen projects that Falcon has is the Company’s Central Canada [“CC“] project is ~20 km SE of Agnico Eagle’s Hammond Reef project with ~5.6M ounces of Au (Reserves + Measured & Indicated resources) and a forecasted All-in-Sustainable Cost (“AISC“) under US$900/oz.

CC hosts a historic producer with a shaft & mill. The project is on a parallel system to the one that the Hammond Reef deposit is tied to. In 1934, the Central Canada mine reportedly had ~230,000 ounces of 9.9 g/t Au (NOT NI 43-101 compliant).

Since 2020, Falcon has completed 17 diamond drill holes at CC totaling 2,943 m. Highlights include 10.1 g/t Au over 3.0 m from 67 m downhole, 18.6 g/t Au over 1.0 m (with visible gold) from 104 m, 2.8 g/t Au / 7.5 m from 158 m, and 1.57 g/t Au / 14.8 m from 90 m. Those are good grades for near-surface ounces.

A Phase 3 drill program of up to 2,000 m is planned for 4q 2024. It will include three holes totaling ~1,000 m at vertical depths of 200 to 300 m, potentially extending Au-bearing zones beyond the current depth of 160 m. The strike length is 275 m.

Area 51 is a 100%-owned project covering 4,000 hectares in northern Chile. The Inca Del Oro mining district is situated along Chile’s Paleocene age mineral belt hosting multiple porphyry, skarn, & epithermal deposits. The project has road access and year-round working conditions.

There are multiple mining & exploration projects in the vicinity, including the Inca de Oro porphyry Cu-Mo-Au-Ag deposit (460Mt grading 0.40% Cu). Area 51 is surrounded by exploration & mining companies including Freeport McMoran, Newmont, Solaris Resources, and Mirasol Resources.

Falcon Gold (TSX-v: FG) / (OTCQB: FGLDF) has about a dozen properties/projects covering Au, Cu, Ni & Li, mostly in Canada, but two in Chile. Au & Cu prices have been strong, while Li & Ni prices have bounced off 52-week lows.

Near-term drilling at Great Burnt could be a game-changer if high Cu grades or decent Au grades are hit over multiple meters. With several other promising projects, including the high-grade Au Central Canada in Ontario & the Li/Au prospective Golden Brook in Newfoundland, today’s valuation of $5M seems incredibly cheap.

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