Shares of Enforcer Gold Corp. (TSX-V:VEIN) are edging upward in Wednesday morning trading, supported by contractor Orbit Garant Drilling beginning a diamond drill program at the Montalembert Gold Project west of Chibougamau, Quebec. The property lies in the mineral-rich Abitibi greenstone belt.
Enforcer Gold Corp is earning a 100% interest in the 7,300-acre property from Globex Mining Enterprises (TSX:GMX)(OTCQX:GLBXF). To take full ownership, Enforcer has agreed to pay $2.7 million in cash and $15 million in stock to Globex in addition to spending $15 million in exploration on the property, all payable over the next four years.
Globex will keep a 6% gross metal royalty on the first 150,000 ounces of gold produced, with the royalty dropping to 3.5% after that.
Toronto-based Enforcer has budgeted $2.2 million for exploration in 2017, including the new drilling program, slated for 5,000 to 8,000 metres. The first-ever large-diameter drilling at the project is targeting the Galena and No. 2 veins, the two most developed targets, to test the continuity and grade of the mineralized structures at depth. The company is preparing other high priority targets for drilling later this year.
The company is looking to build upon exploration going back to the initial discovery of gold bearing veins at Montalembert in 1949. Exploration has been sporadic since, but promising, including identifying the Galena and No. 2 veins. A bulk sampling program in the early 1970's averaged 12.69 grams per tonne gold over 108 metres. More recently, channel sampling by Globex has further validated the presence of high-grade gold in the veins.
Shares of VEIN are trading at 20 cents this morning, up 8.1% from Tuesday's close at 18.5 cents. Shares are about flat on the year so far, down a penny after closing 2016 at 21 cents. Toronto-listed shares of Globex are down 3.5 cents (-7.1%) at 45.5 cents in morning trading on extremely light volume. Shares of GMX are up 8.3% so far in 2017.
