Is Scottie Resources the Golden Triangle’s hottest driller?

Since my article on Scottie Resources (TSX-v: SCOT) / (OTCQX: SCTSF) in mid-October, the stock is up +39.5% to C$0.265 from C$0.19. It released its 3rd best drill interval at the world-class Blueberry zone, 25.0 meters of 9.8 g/t gold (“Au“), incl. 161 g/t over 1.3 m.

That’s a “metal factor” [meters x grade] of 245, in the top-8 (of 5.0+ g/t Au Canadian project drill results) in November. Blueberry, part of the Scottie Gold mine (“SGM“) project, is shaping up to be a company-maker, and it’s 100%-owned / royalty-free.

On Dec. 6th management released assays taken from the C & D zones, which are more than 200 m along strike to the Blueberry contact. The highlight was a near-surface interval of 60.7 g/t Au over 2.0 m [within 4.0 m of 31.8 g/t].

The C & D zones are roughly halfway between the Blueberry vein and the past-producing SGM. Prior high-grade intercepts included 9.1 g/t Au over 16.1 m. These results add to the ever growing database of drill data, helping to build a robust 3-D model.

Scottie has a superb combination of 1] location in the Golden Triangle (“GT“)  (access to roads & power, sandwiched between Newcrest & Ascot Resources) 2] a prime takeover target, 3] substantial property holdings (59,000+ hectares), blue-sky exploration upside, 4] high-grade, and 5] attractive valuation.

B.C. is one of the best gold mining districts in N. America. Not only is it host to Newcrest, Newmont, Barrick, Teck Resources, BHP, Agnico Eagle, Freeport McMoran, Boliden AB, Pan American Silver (partnering with Agnico to acquire Yamana), Kinross, Hecla Mining, Seabridge & Centerra Gold, others are sure to follow. 

The Company owns 100% of the high-grade, past-producing SGM & Bow properties, the Summit Lake claims (contiguous SGM), and the Georgia project (host of past-producing Georgia River Mine). In addition, Scottie owns the Cambria properties and the Sulu property.

SGM is 45 km north of Stewart B.C., 20 km north of Ascot’s Premier Gold Mine project and 27 km south of Newcrest’s operating Brucejack mine. Importantly, SGM has an active small mine permit which will be useful for bulk samples.

Nearly 17,200 meters were drilled this season, the vast majority at Blueberry following up on intercepts of (34.8 m @ 7.4 g/t Au), (4.8 m @ 77.6 g/t [within 11.9 m @ 34.6 g/t]), and (4.1 m @ 36.2 g/t [within 13.5 m @ 15.3 g/t]).

After yesterday’s results at the C & D zones, assays on 40 additional holes from Blueberry are pending.

Notice the legacy SGM area on the map above is ~2 km west of the SGM, and ~2 km east of the Domino zone. Imagine the potential if some continuity can be established spanning all three zones.

For much of 2022 CEO Brad Rourke has been saying that his technical team feels reasonably confident that the Blueberry zone alone could host 1M ounces of high grade gold. By high-grade I mean > or = to 5.0 g/t.

For comparison, Skeena Resources’ flagship PFS-stage Eskay Creek has 5.2M Measured + Indicated ounces at 3.5 g/t Au equivalent. Skeena’s Enterprise Value {market cap + debt – cash} is ~C$530M.

Recent results are leading to a better understanding of geology, structure & potential geometry. Drilling is making VP Exploration Thomas Mumford look really smart… actually, he has a Phd in Geology, he IS very smart. Make no mistake, Scottie’s technical team is just getting started!

In a recent corporate presentation CEO Rourke said the strike length at Blueberry has doubled this year to ~1,450 m, and vertical depth has reached 390 m and the deposit remains open at depth & along strike.

Dr. Mumford believes mineralization could potentially extend to 2,300-2,400 m. To be clear, the mineralized strike length is ~1,450 m, but the full length of the Blueberry contact is ~2.400 m.

Rock density was stated as 2.9, for width I assume 5 meters, and for grade I’m using 5 g/t Au. Note: {Brucejack is ~10 g/t, Ascot’s projects are 7-8 g/t}. In the chart below one can see possibilities for Blueberry.

At 1,450 m x 400 m x 5 m & 5 g/t Au, there are ~1.35M oz., but at 6 m width & 6 g/t, it could be ~1.95M oz., and at 2,000 x 700 x 5 & 5 g/t Au, Blueberry might have nearly 3.3M oz. To be clear, there’s no guidance on the resource size, grade or timing of a maiden mineral resource estimate.

Vertical depth is 390 m (I rounded up to 400 m), but management will drill some deeper holes next year. Although the team is optimistic, there’s no guarantee that the mineralized strike length OR depth will continue expanding.

Other targets including the legacy SGM area, Domino, the Bow properties, Summit Lake & the Georgia, Cambria & Sulu properties (combined) could add meaningful ounces once Scottie (or an acquirer) has the time & money to drill them.

Outside of the Blueberry zone in the legacy SGM property area are more monster intercepts;[109.4 g/t Au over 2.5 m] & [7.3 g/t over 25.0 m]. Historic trenching & channel sampling returned [103.9 g/t over 1.4 m] & [203.8 g/t over 1.9 m].

In my view, Scottie (and perhaps Ascot) could be acquired by Newcrest or Agnico, but also by Newmont, Barrick, Teck, Boliden AB, Freeport, Kinross, Hecla, Skeena, Evolution Mining, Alamos, B2Gold, SSR Mining, K92 Mining, IAMGOLD, Osisko Mining, KGHM Intl., NovaGold, Coeur Mining, New Gold or Hochschild Mining.

That’s 22 companies that could easily afford, and greatly benefit from, taking out Scottie. It seems like the Company is valued as if it has 1.0 to 1.5M ounces, but if it’s actually sitting on much more, all bets are off.

Not all GT juniors will prove up multi-million-ounce resources or have high-grade/heavily gold-focused projects. Not all projects are in the southern part of the GT with easy access to a deep-water port (< 40 km), a year-round highway & major power line (1.5 km), all which means lower drilling costs.

Assays from 40 holes are pending, that’s a lot more information with which to connect the dots. The exploration success rate has been excellent, hopefully it continues into next season.

With gold breaking above US$1,800/oz. last week (now ~$1,772/oz.), Rourke is fielding calls from groups offering cash and from prospective strategic partners and/or acquirers. He’s never been so popular. Hosting 1M ounces is nice, but scale matters for high-grade, low-tonnage projects.

Two million ounces is more than twice as good as 1M, and 3M is more than 3x better than 1M! How many high-grade pre-production juniors are there with multi-million ounce resources?

Osisko Mining, Ascot, Sabina Gold & Silver, Rokmaster and ASX-listed Bellevue Gold & Auteco Minerals come to mind. Of course, there are, and will be, others. If/when Scottie Resources (TSX-v: SCOT) / (OTCQX: SCTSF) breaks into that elite club, the # of members might still be under a dozen.

Scottie might not be Canada’s next 5 or 10-bagger, but it carries less risk than companies who claim they will be. The Company is also more likely to be acquired, but not before A LOT MORE drilling. Management believes they’re onto something special, they are in no rush to sell.

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At the time this article was posted, Scottie Resources was an advertiser on [ER] and Peter Epstein owned shares in the company 

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