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175. Bull, Bear & Beyond – Abcourt Mines: executive interview
2 Plays25 days ago
In this interview, we speak with Pascal Hamelin, the president and CEO of Abcourt Mines, an emerging Canadian gold producer with strategically located mining properties in the famed Abititi region of Quebec. Pascal outlines how he is navigating the key transition from exploration to production at the company’s flagship Sleeping Giant (Geant Dormant) gold mine as well as the development possibilities for its other assets in the region.
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Transcript
Introduction to Gold and Edison TV
00:00:08
Speaker
Hello and welcome to Edison TV on a beautiful London morning with Minds and Money resourcing tomorrow, I should call it, just around the corner. Now, we all know that one of the best ways in troubled times of protecting the value of your investments is gold, especially perhaps at a time when Bitcoin is buckling.
Why Invest in Gold?
00:00:30
Speaker
And does that make gold the answer? Well, of course it makes gold the answer. And we know that that's why you're here. But not only is gold a way preserving your money, but also it can be a way of growing your money. And one of the best ways to do that is to find a company which is going through that transition from explorer to producer. As everyone will tell you, that is where the big investment returns are to be made. Well, Which companies are in exactly that position? Well, one, I will tell you, is Vancouver-listed Abcourt Mines, and its share price so far this year has doubled from roughly 5 to roughly 10
Abcourt Mines Overview
00:01:08
Speaker
cents. To tell us all about it, I have in the studio with us the President and Chef de la Direction, which to you and me is, I'll let you translate President, but um the Chef de la Direction is CEO, Chief Executive Officer of the company, Pascal Hamelard. Pascal, thank you very much indeed for joining us.
00:01:28
Speaker
Thank you. i hope Thanks for the invite. Not at all. I hope the pronunciation was close enough. It was. Very good. You recognised it heading away.
Sleeping Giant Mine Acquisition
00:01:37
Speaker
Yeah, yeah. So tell us, Abcourt, you're just going through this process.
00:01:41
Speaker
Exactly. Your mind is Sleeping Giant. Yeah. Give us the background to the story. Yeah, so Sleeping Giant Mine ah is a high-grade underground mine in Northern Quebec, fully permitted with all the infrastructure in place.
00:01:55
Speaker
um It's a narrow vein, high-grade. The historical grade was 10.3 grams. That mine was in production from 1988 till that period. acquired it in 2016.
00:02:07
Speaker
on and off you know but throughou that period i court acquired it in twenty sixteen with it geology with the drilling ah We did we did economic evaluation in 2023, we continued the drilling and this summer weve got the the final step we we got the we got a credit agreement with Nebari.
00:02:31
Speaker
ah to fund the start-up of the mine and we began production in July. Turn on the mill in August and start Goldpour in September. And is that ah did that take a little bit longer, that whole process, than you had originally hoped?
00:02:46
Speaker
Well, you always want to go quicker, but at the end, it's the lender that decides the rate yeah when you're going to start the mine, you know.
Production and Employment Expansion
00:02:55
Speaker
So we did a lot of drilling. We de-risked the project to a level where the lender is comfortable to embark on a journey with us.
00:03:03
Speaker
So that occurred this summer. So now we're ramping up production. We're doing hiring of miners. um It's ah conventional mining. So it's um you need a lot of miners in that that type of mining environment.
00:03:19
Speaker
So we're doing the hiring. We're around 110 employees at this stage. Our goal is to go to 130 by this So we are December now and you're in production by June next year. So you've got seven months yeah in which to ramp up.
00:03:39
Speaker
What do you need to do in that period? What are the milestones that were? Hiring people. That's it. yeah So all you need, all you need. It's a well-known mining camp. So labour is freely available.
00:03:49
Speaker
Yeah. Yeah. We've got a lot of ah resume for young miners. So it's to go through the training. So actually two trainers start today at the mine.
00:04:00
Speaker
So they're they're going to train young miners to become veterans. And then tell us a little bit about the actual mining process.
Mining Methods and Infrastructure
00:04:08
Speaker
It's an underground mine. So it's we have a shaft. Fully operational. Fully operational. but yeah yeah stay fully operational um and The mine has always been dewatered. The mine was never flooded. So the dewatering system has always been in place. The shaft was well kept.
00:04:29
Speaker
So we're doing upkeep, you know, it's ongoing. It's ah it's a mine. So you go ah you always have to maintain your asset. So we did that from 2016 till today.
00:04:39
Speaker
um Now we're increasing the labor force to do the development on the ground to access the stoves. The stopes will, there's two mining methods.
00:04:50
Speaker
When it's sub vertical, we're going to use long hole mining. So sub levels every 15 meters. And then we're going to do two and half inch long hole drilling to the to drill and blast panels.
00:05:03
Speaker
So that's the long-haul mining methods. Once we start mining those topes, that's when you're going to see a big bump on the on the number of ounces per month because these topes are providing a lot of tonnage.
00:05:16
Speaker
Right now, what we're doing is the development of these sub-levels. That's what we're doing right now. We have one stope we're doing sub-level development and two other stopes we're doing the ah the vertical raise through what we call them halimac. So we're doing the vertical raise on two of these stopes.
00:05:35
Speaker
so And the last stopes, that one is in production. It's a room and pillar stope. So when the yeah the inclination of the vein is is more horizontal,
00:05:46
Speaker
In this case, I call it a double diamond, like a scale, because it's it's around 30 degrees. i So it's quite steep. Oh, yeah, it's pretty steep, but high grade, very high grade.
00:05:57
Speaker
ah Go on, tell us how high. Well, the channel sampling, we kept them. So some some channels were 300 grams per ton. right That's undiluted, you know, the channel, the vein itself. yeah So the vein was 30 centimeters, 300
Future Production Goals
00:06:14
Speaker
grams. So by the time you dilute it to 2.4 meters,
00:06:20
Speaker
um we We saw a head grade at the mill over 15 grams at the grit at the mill on some days. like i don't I'm not saying this is the the ah the the whole grade, but you know we see spikes on some days.
00:06:36
Speaker
So it's it's very promising that stove. And we're going to be mining that stove until next summer. So you've got these two methods, you've got the the rumen pillar which is high grade stuff and then you've got the long hole stoping which is a lower grade more it's more volume yeah exercise it's more an exercise and tonnage you blend those presumably yeah up to the surface what sort of rates can you well can you call up to the surface at what sort of rates does can you expect from in terms of plant throughput?
00:07:07
Speaker
Yeah, yeah. On the NPEA, the plan was to go to 350 tons a day. So it's it's ah lots of capacity in the mill and lots of capacity in the shaft. The 350 tons a day, the the the bottleneck or the the constraint is the number of mining fronts.
00:07:28
Speaker
um Because you're doing development, store preparation, you know logistical... you know going from drilling to blasting. So the average on a mining front is like 75 to 100 tons per day or maximum.
00:07:43
Speaker
So you need, in order to maximize the mill at 800 tons a day, you would need eight mining fronts. So for that, the geologists need to take a big lead in front of the operation.
00:07:54
Speaker
And that's what we're building. So 350 tons a day now. That's the goal. So between now and commercial production, well, commercial production will be when we generate profit. Okay, so that will be a lot sooner. But the steady state, 10,000 tons a day or 350 tons per day. 10,000 tons month. 10,000 tons a month, sorry, not 10,000 tons a day. Jeez. Weaky, weaky. We can dream.
00:08:25
Speaker
yeah But 350 tons a day, yeah we're going to get that probably in the fall, like around the same time next year. Right. OK. But you don't need 350 tons a day to be commercial production. yeah Commercial production is at a profit.
00:08:41
Speaker
And with these margins that we get these days on the gold sector, um I don't need to be at 350 tons a day to generate profit. So just to distinguish between between Steady State, that which is going to be roughly this time next year, and commercial production, which is going to be in the second quarter, so, yeah you know, May, June sort of time. no What about actual first gold?
Expansion Plans and Comparisons
00:09:07
Speaker
the the the sorry What about first goal? Oh, the first goal is it's going to be commercial production. So like the... the so the two are going to coincide? So around 150, 200 tons a so and we reach six thousand tons a month You know, we'll be roughly over a thousand ounces per month. That's when we're going to get commercial production.
00:09:30
Speaker
Okay. So you two are going to be roughly coincident. So first gold is going to be roughly the same time as commercial production. Yeah, yeah. they the the We're pouring gold right now. Okay. So we're we're ramping up. October, we we produced 475 ounces.
00:09:46
Speaker
um So it's going to be a ramp. You know, it's... On a quarterly basis, people will see a ramp up in our in our for like on our production results.
00:09:57
Speaker
and um you know And then they're going to see the financials too. you know When they see December 31st and March 31st, the financials, they're going to say, OK, they're on the path.
00:10:08
Speaker
They're on the path of commercial production. And so the investors, you know right now, the share price is 10 cents. um People are seeing that we're in development. At 5 cents, we were an exploration play.
00:10:23
Speaker
and Now we're in development. 100 million market cap. I don't think we'll we'll be there when we're we're in produc in production and generating big margin um to to achieve our plan and also to increase the life of mine at Sleeping Giant.
00:10:41
Speaker
we you know With that margin, the cash generated from the assets, it's going to be to increase the life of mine at Sleeping Giant and also grow the company, like start a second mine.
00:10:53
Speaker
We should maybe just go a little back a little bit here because we haven't done much background on the mine. You're in the Abitibi region of of Canada, yeah very well-known mining region. yeah um The mine used to be owned by Orison, and then Cambior. What is the mine that is in in this sort of whole mining camp? What is the mine that exists now that is most like Sleeping Giant? Or sometimes it goes by its French name, doesn't it?
00:11:21
Speaker
Giant Dormand.
00:11:24
Speaker
The sleeping giant Giant Dormand is it similar to Domegamy mine that Agnico had in the 80s. If we recall Agnico-Egold, before La Rhone, they were mining the Domegamy mine. It was a sulfide ore, narrow vein, low tonnage.
00:11:43
Speaker
And then Anglico discovered Laurent Depe, and that was a game changer for them. you know they ah They had a lot of solarite zinc associated with their gold back then.
00:11:54
Speaker
I recall in the late 90s, their cash cost was negative $200 because the zinc was paying for everything. right So, Laron, Dumagami, mine was probably a a cousin of a sleeping giant.
00:12:11
Speaker
um I'm not saying we're going to find Laron adept at dapp a sleeping giant, but... Probably worth a quick look, though. Probably worth a look. We will. We will look, trust me. But, you know, those are, the it's pretty well the only mine in, like, the the rest of the camp is mechanized mining.
00:12:34
Speaker
um You know, if you look at LAMAC, West Dome Kena, IM Gold, Westwood and Lerone, Goldex, they're all mechanized mining. You know, their mining veins that are a lot wider.
00:12:48
Speaker
um not quite as like the base metal mines, you know, like in and and Sweden or in Ontario, um but, you know, wider whiter than ah the Sleeping Giant. Sleeping Giant, it's a one meter vein.
00:13:03
Speaker
And the rock on either side is barren. There's very, very little, like it goes from 100 grams per tonne to zero. da Easy to distinguish? Can you virtually distinguish between... oh yes, yes, yes. there's ah Our vein is there's a lot of sulfide in the vein.
00:13:21
Speaker
So you see the calco, the pyrite, the sphalerite. Actually, there's no visible gold as sleeping giant. Very, very... like you it's ah buy a lottery ticket if you find visible gold.
Economic Prospects and Assessments
00:13:34
Speaker
Right. Because it's very rare. Right. Okay. But the vein, the gold is disseminated throughout the vein.
00:13:40
Speaker
And there's a direct link with the sphalerite content. So more sphalerite on the, on the, on your, when you look at the vein, you can see, okay, that's going to kick, it's going to be high grade.
00:13:54
Speaker
You mentioned you'd done a PEA. Yeah. And what what were the results of that? What did it show in terms of the NPV, the IRR? Yeah, yeah. the ah It was done at $1,800 U.S., so it's it's totally different. Yeah, sure.
00:14:08
Speaker
But back then, it was like, if I recall, it was like $60 million U.S. NPV at $1,800. So today, it's like... $4,000, say. It might be... oh yeah.
00:14:23
Speaker
That's forward-looking statement. yeah All right. But ah it would be probably a well north of 100 million. Yeah, okay, so ah much, much bigger sorts of figures. that will look here And then you didn't do a pre-feasibility study?
00:14:37
Speaker
no or i having to No, because there's the the difference between a PEA and a pre-feas would have been you take out the infant resource from the life of mine and Narrow vein gold mining, if you want to do a pre-feasibility, you know, following 43-101 protocol, you would have to drill for like five, 10 years to to to have indicated resource. And you don't need to do that because the payback today is so quick that ah you can you can have a mine plan with one year of indicated resource and you pay off your your initial CapEx.
00:15:16
Speaker
So... It would look, if I did a pre-feas, it would have just indicated resource. It would be a two-year life of mine um with a one-year payback. It would look odd. yeah you know So there's no value to that. So the like when we when the lender and us would discuss The goal was let's make sure that we always mine indicated resource.
00:15:41
Speaker
So it's well defined. So the definition drilling is ahead of the the mining. um And then everybody's fine. Like we're we're predicting, you know, you're able to forecast your your revenue, your ounces, and then ah you got a solid plan and then you're you're able to sustain your CapEx investment.
00:16:03
Speaker
So that's what we did. Right now we're drilling this Q2 2027. That's what we're drilling right now. So 2026 is defined. um The mine plan is set.
00:16:15
Speaker
You know, I'm actually, I have engineers right now working on the LUM. for the longer term, a seven-year life. Of course, there is inferred resource in that, but it's better to start mining now and generate cash and use that cash to do the definition drilling for 2028, 2029. So that's what we're doing. So the life of the mine, according to the PEA, was what? Seven years. Seven years. yeah Okay. And...
00:16:45
Speaker
As you say, that was a ah lower gold price. The gold price affects the life of the mine, potentially. Exactly. Are you allowed to give us an estimate about what the life might be with at these high gold prices?
00:16:57
Speaker
ah i or well let us this let he ask you Let me ask you in another way. yeah What would you like, and you're allowed to exercise... so
Exploration and Drilling Plans
00:17:05
Speaker
of Ten years. yeah okay can But what would you like the company, Abcorp, to look like in, say, three years' time?
00:17:11
Speaker
Three years' time, sleeping time is... is producing steady state, predictable, 10-year life. you know like We show the market that we have 10 years of life of mine, probably an updated PEA that show the market 10-year life you know with infant resource and the life of mine, so a PEA. and then have the second mine be about to produce, you know, that's what I'm, that's my that's my goal for three years. Okay, so if you have a second mine that's about to produce, you must have an idea of what that mine is. yeah And I think the market knows too.
00:17:49
Speaker
Tell us about it nonetheless. Yeah, yeah. So we're drilling. we We had a discovery in 2024. um It's the cart ride zone of the Flaudin property. it's ah It's a property, Crow Flight. It's about 90 kilometers from the Sleeping Giant mill.
00:18:09
Speaker
It's due east from the Sleeping Giant. By gravel road, it's 138 kilometers. Now, Floor D'Art Cartwright Zone, it's a surface story. What we exposed so far is 300 meter long, 15 to 20 meter wide, sub vertical. We drilled it. We drilled 4,000 meter this winter.
00:18:30
Speaker
on that underneath that zone and it's valid we validated that the zone is just not on surface. It didn't come from the sky, it came from under. So we drilled and then we all the holes hit.
00:18:43
Speaker
I think we drilled eight, ten holes. I forgot. Anyway, like 100% of the holes intercepted the zone. So similar width, you know, all a lot of amplitude. So what right now what we got is 300 meter long 15 to 20 meter wide, at least 200 meter deep.
00:19:02
Speaker
So that's what we got. On surface, it was the average of all these channels. We channeled sample every 15 meters, and the average grade was five grams on surface.
00:19:13
Speaker
Very nice indeed. Competent host rock, so you can put in a reasonably steep pit, or is it going to be two other things? the that the whole the it's the green belt like the green like The belt in Quebec is pretty competent. on my soul yeah I would say it's it would be a pretty steep pit.
00:19:34
Speaker
But first first, let's define the zone. so This winter, we're we we're starting to drill mid-January. We're starting a 20,000-meter drill campaign right on that zone.
00:19:46
Speaker
We're going to start east of that surface showing. We're going to drill east because it's it's more wetland, so it's perfect for winter drilling. And then ah next spring and in the summer and the fall, we're going to drill on the west side of that showing where it's it's on the ridge, so it's dry land. It's easy to drill.
00:20:05
Speaker
And then is this a standalone operation or is this, can can you process this? freeway pen It will depend. If it's a low tonnage, now we're going to process it at sleeping time. If it's a high tonnage, we were one kilometer off the railroad, the national grid.
00:20:22
Speaker
So... um So you could do DSO, direct ore shipping, you know, to to to a process plant, like, you know, might not be ours, but you could do that. Or you build a mill on site and you make dories.
00:20:40
Speaker
We haven't actually talked much about the processing. We haven't talked about the processing at Sleeping Giant either. Could you describe
Processing and Market Strategy
00:20:48
Speaker
the process? Relatively conventional? Yeah, it's it's typical and for Canada. we use um ah We have a grinding circuit that grinds the the rock to 75 microns.
00:20:59
Speaker
And then we use cyanide to put the gold in solution. And then we recover the gold from the the pulp with carbon. So carbon and pulp.
00:21:10
Speaker
um And then we make dories at the site. um Currently, it's a two to one silver to gold. So actually, we get a good benefit from the byproduct of silver. sale Right now, the silver is at a record price.
00:21:26
Speaker
So for every ounce of gold we produce right now that we pour, we pour two ounces of silver. Yeah. So it makes the Dory look, it's more of a wine-ish Dory. It's not a yellow gold, you know.
00:21:40
Speaker
But we've now become this yellow. Yeah, it comes together. so So what we do then is we have a contract with the Oriel Canadian Mint. So we ship the dory to the to the mint and then we sell it to the market spot. No hedging. No we sell spot.
00:21:57
Speaker
we We have no um you know, we didn't pre sell gold. None of that. So no no streaming or whole streaming. We have a two percent royalty with a triple flag. ah No, not sorry.
00:22:12
Speaker
One and a half because we bought back half a percent in September. But we had 2%, now it's one and a half um with triple flag. And that we have the option to buy back another half a percent ah before 2027. So we'll probably exercise it between us. I suppose, you know, that silver you were talking about, if you do need, and that you don't need capital at the moment, but if you ever did need capital, perhaps you could stream off the silver.
00:22:45
Speaker
We could, we could. Yeah, I receive offer, but I, so far, ah you know, I think we're going to get that. so We're going to keep the silver for our shareholders.
00:22:56
Speaker
Pascal, thank you very much indeed. We wish you all the best. Thank you. And we look forward to talking to you in the future. Ladies and gentlemen, that was Pascal Hamela, the President et Chef de la Direction, CEO to you and me of Abcorp Mines. Keep an eye on them. The shares have already doubled so far this year. And going into production, we know that's where the big investment returns are to be made.
00:23:20
Speaker
We'll be bringing you more such investment opportunities very near in the future, we hope. We're sure, in fact. But until then, you have a capital day.