Dual-listed Australian-Canadian Tempus Resources (TSX-v: TMRR) / (ASX: TMR) owns the Elizabeth-Blackdome [“E-B”] project consisting of a southern block, Elizabeth, and the past-producing northern block, Blackdome, in south-central B.C.
Tempus owns the permitted Blackdome mill & tailings site that produced ~230,000 oz. of gold (“Au“) at ~22 g/t head grade. A detailed mill restart report has been completed and will be released after the maiden mineral resource estimate in June (delayed a month due to more complex block modeling work).
Being dual-listed has its advantages. Management successfully raised ~C$2.2M in Australia at a half-penny discount to market and a half warrant exercisable at an 87.5% premium to the placement price.
When the Company needs more capital, the next step will be a financing in Canada on attractive flow-through terms. Management has enough cash for pre-drilling activities and to plan & prepare for drilling in Q4. Experienced boots on the ground will soon be mapping & collecting rock chip samples.
E-B has very high-grade gold in 1 to 5 meter wide vein sets. Exploration agreements are in place with the Stswecem’c Xgat’tem & Xwisten First Nations on the Blackdome & Elizabeth properties, respectively. Since November 2020, Tempus has drilled 80 holes (19,500 meters).
Please take a moment to read the bios of key board & mgmt. members. This is an impressive team for a company valued at just C$10M.
C$1.4 billion dollar producer New Gold’s New Afton mine is ~300 km to the east. In Q1 New Afton produced 37.3k Au equiv. ounces with a Au recovery of 89%. Full year guidance is for 145k Au Eq. ounces. A few hundred km north of Tempus’ E-B project is the world-famous Golden Triangle (“GT“).
Soon to be combined Newmont / Newcrest, Barrick, Teck, BHP (with a recent 19.9% stake in Brixton Metals), Freeport McMoran, Kinross, Hecla Mining & Seabridge are large companies with active interests in the GT.
There are dozens more smaller players across the GT. such as Skeena Resources, Tudor Gold, Ascot Resources & Dolly Varden (valued in the $100s of millions) and Endurance Gold, Talisker Resources & Westhaven Gold (each valued around $45-$55M) in south-central B.C. near Tempus.
The later three do not own a mill like Tempus does. Access to the Blackdome mill would allow a larger player the opportunity to possibly roll up nearby assets. Blockbuster holes have been reported by Tempus, Talisker, Endurance, Westhaven & Blackstone Minerals.
Please see April corp. presentation
When Tempus acquired its B.C. assets from Skeena, there were three known veins, but only one was the primary contributor to an historic (non NI 43-101 compliant) 12.3 g/t, 206k oz. (to ~200 m depth) resource done by SRK in 2009. Today, the Company has mapped over six veins, and there are likely more.
An initial 4,000 m drill program is planned for the winter, following up on a spectacular interval earlier this year of; 28.1 g/t gold over 28.5 m from 84 m at the No. 9 vein.
This [grade x meter] figure of 801 is a top-6 result from any project in N. America year-to-date! On the day of the big announcement, shares of Tempus doubled to $0.10 before closing at $0.08. Since then, Au is up ~4%, yet Tempus shares have drifted down to $0.04.
Importantly, Tempus has other top-decile intercepts in the hundreds of gram-meters; 71.3 g/t Au over 5.5 m, 61.3 g/t / 5.0 m, 33.8 g/t / 12.4 m and 54.9 g/t / 5.0 m on the SW vein, and 311 g/t Au over 1.1 m on the Blue vein.
A maiden mineral resource estimate is expected in June. It won’t be large, perhaps 300-350k ounces, but the grade is expected to be very high. Ten to 12 g/t Au would be 3-4x that of Kinross/Great Bear at 3.0 g/t, Skeena at 3.5 g/t or Wallbridge Mining at 3.0 g/t.
Since the historical (SRK 2009) resource of 206k oz. was mainly from a single vein down to ~200 m, there’s real potential for six or more veins — drilled from surface to below 200 m — to deliver 1M+ high-grade ounces.
Note: nameplate capacity is 300 tpd, but management uses 200 tpd for planning purposes
The Blackdome mill is just 30 km from the Elizabeth zone, so operating margins have the potential to be strong. Assuming 95% capacity utilization & 94% gold recoveries, the chart above shows the number of annual ounces at various production rates. For example, 9 g/t ore would generate ~23.6k oz./yr. at 250 tpd.
I include higher operating scenarios as the payback period to double mill capacity could be under a year. In speaking with CEO Jason Bahnsen, I’m pleased that he doesn’t overplay his hand regarding the mill complex, a complex with a replacement value of up to $60M.
Assuming a US$900/oz. margin, capturing 100% of the economics on 23.6k oz./yr. would be a run-rate of ~C$28M/yr. in cash flow. In my view, meaningful cash flow could start as soon as 2025.
Although management could have the mill up and running again next year, the board plans to wait until it can feed Blackdome with its own high-grade ore. The following chart shows some pre-PEA, high-grade gold juniors. Tempus is trading at about $28.5/oz. (assuming 350,000 ounces).
Another nearby (much larger & well known) historic mine — not part of Tempus’ land package — is the Bralorne Mine Complex. It reportedly produced 4.2M ounces at an average grade of 17.7 g/t Au.
The Blackdome mill & tailings site are permitted and in good standing. Importantly, drilling at E-B has been focused on shallow mineralization (< 200 m depth). However, the Bralorne Gold mine reached a depth of 1,900 m.
On Feb. 20th Tempus released final 2022 drill results on the Elizabeth project. Seven holes included intersections of the No. 9 & Blue veins, and the newly discovered West Hanging Wall vein. The high-grade zone has now been extended to > 250 m & > 285 m at the No. 9 & Blue veins, respectively.
During last year’s drill program, Tempus completed 10 holes targeting a potential strike extension from historical workings to the southwest. Several No. 9 vein intervals intersected wide zones of quartz veining, including three that had visible gold..
There are a few dozen high-quality Au juniors in Canada, but only a handful have 1) a permitted mill & tailings site, 2) very high-grade mineralization, and 3) a very cheap valuation.
Upon the release of a 10+ g/t Au maiden resource and details of a comprehensive mill restart scenario — not to mention a robust drill program and the potential for more blockbuster intervals — Tempus Resources (TSX-v: TMRR) / (ASX: TMR) is positioned for an exciting six months ahead.
Please see April 27th corp. presentation.
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