Gatling Exploration CEO Has Put the Band Back Together to Produce Solid Gold

The 1980 movie classic Blues Brothers made the phrase “putting the band back together” synonymous with using the same group of people for success, as Jake and Elwood Blues fulfilled their mission to save the orphanage they grew up in. In a recent conversation between and Gatling Exploration (TSX-V: GTR)(OTCQX: GATGF) President and CEO, Nav Dhaliwal, the high-energy executive used that exact phrase to elucidate on his strategy to build value with Gatling, just like his team did with Bonterra Resources (TSX-V: BTR)(OTCQX: BONXF), only bigger as it works on a project in an area with deposits famous for size and scope.

In 2017, Bonterra had a market capitalization of approximately C$145 million. Founded by Dhaliwal, Bonterra has three gold projects in development in Quebec with a 2.1 million ounce NI 43-101 Resource Estimate and in situ resource metal value in excess of $4 billion.

Gatling, a company that remains largely under the radar of investors at this time, has a market capitalization around $20 million despite owning a project with three deposits, an historic resource, and a series of recent drill results that suggest Dhaliwal is charting the right course for his goal.

Quality Project, Low-Risk Jurisdiction

Low-risk/high-reward is the name of the game in mining today. Companies and investors simply don’t want to take chances in risky jurisdictions that can result in mining operations being halted like they were last year for OceanaGold Corp. (TSX: OGC) at its gold and copper mine in the Philippines or at the Chinese-owned Solton Sary gold mine in Kyrgyzstan after a stone-throwing clash between workers and locals over toxic spills sent one person to the hospital, much less the decade-long battle Barrick Gold (NYSE: GOLD)(TSX: ABX) has endured with its Pascua Lama project on the border of Chile and Argentina.

Finding a great gold exploration project in the right jurisdiction has become quite a challenge nowadays, but that’s exactly what Gatling has done with its Larder project in Northern Ontario, one of the most gold-rich and mining-friendly jurisdictions in the world.

Gatling took Larder as its flagship project when it was spun-out of Bonterra in September 2018. Accompanying the project was a multi-million-dollar database of historic exploration work by previous operators at the project. By February 2019, Dhaliwal had left Bonterra to focus his start-up expertise on advancing the Larder project. The first person he brought along with him was the award-winning geologist Dale Ginn, the former VP of Exploration at Bonterra, to serve as COO at Gatling.

Gatling: Walking in the Land of Giants

The Larder Gold Project straddles 9 kilometers of the Cadillac-Larder fault in Ontario’s gold-laden Abitibi Greenstone belt, east of Kirkland Lake and near Virginiatown. The 3,370-hectare project is located 7 kilometers west along trend of the Kerr Addison Mine, which produced about 11 million ounces of gold historically. Kerr Mines (TSX: KER)(OTCQB: KERMF) was a previous owner of the Larder project. Larder is also 35 kilometers east of Kirkland Lake, a well-established gold camp that has produced over 70 million ounces of gold.

Others projects/mines in the area are household names in mining circles. These include Timmins (71 million ounces gold), Val-D’Or (20 million ounces gold) and Rouyn-Noranda (19 million ounces gold), to name a few. Agnico Eagle (TSX: AEM)(NYSE: AEM) is particularly well versed in this part of the world, with its Canadian Malartic, Goldex LaRonde and LaRonde Zone 5 gold operations, as well as its Kirkland Lake gold project adjacent to Gatling’s property.

Owing to all the mining activity that has been going on in the region for decades, Gatling is flush with infrastructure for moving Larder forward, including supportive communities and government, skilled workforce and straightforward permitting.

Gatling is the only junior explorer actively working in the area. It’s a little bit like Lemuel Gulliver in the land of Brobdingnag, only Gulliver in this case can grow to the giants’ size.

Larder Gold Project

Larder is known to host three high-grade gold deposits: Cheminis, Bear and Fernland. Each of the deposits had been previously worked by other companies at different times in isolation, but never as a single, combined project.

Gatling is proving that the deposits are part of one system that is bigger than anyone realized. Thanks to the existing library of data and seasoned technical and management teams, Gatling is delivering success at a rapid pace, with intentions of further accelerating development in 2020. On the heels of drilling about 35,000 meters in 2019, management wants to increase drilling in its prioritized zones to about 100,000 meters this year.

The Cheminis deposit is central to the property and includes a vertical shaft to a depth of 1,085 feet with six levels, of which the deepest is at 1,035 ft. Intermittent past production from the Cheminis Mine has totaled approximately 260,000 tons at a recovered grade of approximately 0.104 ounces gold per tonne (g/t).

The Bear deposit hosts a historic estimate by P+E Mining for Bear Lake Gold in 2011 of 3,750,000 tonnes at 5.7 g/t (683,000 oz) in the Inferred category. The 2011 P+E Mining report shows the Cheminis Deposit contains a historic estimate of Indicated of 335,000 tonnes at 4.1 g/t (43,800 oz) and Inferred of 1,391,000 tonnes at 5.2 g/t (233,400 oz).

Bear Lake Gold wasn’t the only company to explore the project now controlled by Gatling. In 2012, Goldfields entered into an option to earn a 60% interest in Larder by spending $40 million in exploration and development. After spending $6 million and drilling 59 diamond drill holes, Goldfields pulled exploration activities worldwide to focus on production and conserving capital, terminating their option in 2015. The 59 holes (~ 31,000 meters) have not been included in the historical mineral resource estimates.

Ultimately, Goldfields’ work (and that of others) saves Gatling not only millions of dollars in exploration work, but a years’ worth of time.

According to Dhaliwal, the first thing Gatling did was lay out an aggressive plan of exploration, including step-out drilling to show continuity across all three deposits, which remain open in all directions. Gatling is still in the middle of its first drill program at Larder and has already connected two of the three deposits to create an unbroken 2.5-kilometer trend. If the company can connect the third deposit, shareholders will be sitting on an unbroken 4.5-kilometer trend that remains open in multiple directions.

“What we’re doing is showing that the deposits are growing and, just as importantly, are all connected to create a continuous mineralized trend about 4.5 kilometers in length,” said Dhaliwal during the call. “The way we build value and speak to our audience – including shareholders and neighboring majors – is through the end of the drill bit.”

Furthermore, Gatling is not only proving that the deposit in one system that is bigger than thought, drilling indicates that the system is shallower than expected. Former operators believed that most of Larder’s mineralization was sitting from 500 meters to 800 meters below surface, but Gatling is proving them wrong. Recent drill results are hitting widespread mineralization with strong grades at and near surface in multiple areas.

For the first time in Larder’s history, this raises the possibility of open pit production and that could mean some exciting economics.

Apropos, Gatling also acquired Kir Vit claim package to the north of the three gold deposits from Teck Resources (TSX: TECK.B)(NYSE: TECK) last year, effectively consolidating the land package in the area next to Agnico Eagle’s project. Kir Vit is on trend with the Upper Beaver deposit of Agnico Eagle’s project. Surface sampling at this property has returned values up to 7.9 g/t gold and Teck carried out over $2M of fieldwork prior to Gatling taking over, so the company can fast track its exploration activity there.

The Same Band Members and Upcoming Playlist

Dhaliwal and Ginn have been joined at Gatling from Bonterra by Nathan Tribble, P.Geo. Tribble was previously the Senior Principal Geologist for Sprott Mining, Senior Geologist for Bonterra Resources, Jerritt Canyon Gold, Kerr Mines, Northern Gold, Lake Shore Gold and Vale Inco. He was also part of the exploration team that discovered the 8.2 million-ounce Côté Lake gold deposit for Trelawney Mining and Exploration Inc.

For the sake of brevity, we won’t go into the impressive list of directors that have come to Gatling to lend their exploration and finance experience, many of which have known Dhaliwal for years. Some of the same investors that were part of Bonterra, including the venerable mining investment guru Eric Sprott, have taken positions in Gatling already, according to Dhaliwal.

“Candidly, we’re taking off in a far better position with Gatling than we were at Bonterra years ago,” Dhaliwal mused. “Our share structure is much tighter and our project is more advanced with a database of more than 200,000 meters of historical drilling leading the way, along with a plethora of sampling and survey data.”

Dhaliwal said that he regularly fields questions about when he will look to partner given the company he is keeping in the region and fact that majors need new discoveries to backfill their valuations. “Our expertise is in advancing projects to the point where it is appetizing to a major that has the experience and resources to tackle the production stage,” he explained. “We’re not there yet but our drill results so far have got our team very excited and we’re expecting a very busy 2020. Like any successful explorer, the future of this company will be delivered by the drill bit. We plan to stay nose down continuing to uncover the true size of the mineralized system at Larder, proving and expanding the resource. If we do that, we feel confident that majors will come to Larder Lake to see and talk to us.”

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