Mining Weekly

TORONTO (miningweekly.com) – Junior explorer Secova Metals expects to complete work on compiling historic data at the early stage Duvay gold project, in Quebec, within about three weeks, enabling it to build a model that will inform a $500 000 drilling campaign in the fall.

“This will help us build a comprehensive model on which to base a $1.5-million to $2-million exploration programme in 2016,” Secova chairperson and CEO Brad Kitchen told Mining Weekly Online.

He advised that despite the “very tough” finance market, investor interest was piqued by the progress at the company’s properties.

Kitchen had been with the company for about six months following a “turnaround situation”, during which time it had signed two option agreements.

The first was on the Jessie Lake property, in Ontario, and the second on Duvay, in the prolific Abitibi gold belt spanning from Wawa, Ontario, to Val-d'Or, Quebec. The literal translation of Val-d'Or is Valley of Gold.

At the Ontario-based Jessie Lake property, Secova had been progressing grassroots exploration, meeting minimum exploration requirements to maintain its TSX-V listing.

The company’s main focus was, however, on the early stage Duvay project, which Hecla Mining had acquired in 2013.  But, Hecla subsequently decided not to proceed with the project, focusing on production instead of exploration during the lower gold price environment.

UP THE VALUE CURVE
Vancouver-based Secova’s mission statement lists its purpose as providing value for shareholders through the acquisition of options on undervalued properties, moving these projects up the value curve by applying its professional team’s expertise.

Kitchen explained that even at this early stage, Duvay was presenting similarities to the Windfall Lake gold project, the company’s previous early stage project.

Windfall Lake had by now changed hands several times and the resource had grown to 748 000 oz gold in the indicated category, grading 8.42 g/t, and 860 000 oz of gold, grading 7.62 g/t, in the inferred category.

The project was acquired by Eagle Hill Exploration and, most recently, brought into the fold of Osisko Gold Royalties and Dundee Corp, through their 18% and 15% respective stakes in Oban Mining. Last week, Oban had acquired all of the common shares of each of Eagle Hill, Ryan Gold and Corona Gold through an asset consolidation deal.

Being a civil engineer by trade, Kitchen was naturally first going to build a strong foundation by “methodically compiling historic data on the property” from 1919 onwards.

He noted that preliminary indications pointed to significant shallow-lying gold mineralisation over a 1.5 km strike length, yet, previous exploration had failed to locate the source of the mineralisation.

“We’ll answer that good question [through the] drilling campaign later this fall,” Kitchen said.

DECREASED COSTS
Importantly, he highlighted that the commodity down cycle had reduced demand for exploration services dramatically. Exploration costs had fallen by about one-third in four years.

Kitchen was currently budgeting on paying about $97/m of drilling, compared with costs of about $146/m in 2011.

Secova also planned to take advantage of the lower fuel prices during its upcoming exploration efforts.

Meanwhile, Kitchen praised the provincial and federal governments’ tax incentives. “Flow-through shares have been fantastic for us. Quebec is one of the best jurisdictions [in which to do business].

“The Quebec government is proactively making it easier for junior explorers to put boots on the ground by advancing initiatives such as the Plan Nord and flow-through tax credits, [which] does translate into jobs in the province,” he said, adding that Quebec was also placed ahead of other jurisdictions by its established First Nations protocols.