ICE DRILLING at Borden Lake in 2013. Credit: Probe Mines.

ICE DRILLING at Borden Lake in 2013. Credit: Probe Mines.

Probe Mines Leads Rise in Junior Market Confidence

Issue 75, February 2014

“We hit hole-256,” says Dr. David Palmer, president of Probe Mines, “and the deposit we’d been drilling for 2km over 2 years, always the same, all of a sudden changed.”

Since its discovery in 2010, Probe’s Borden gold property in Ontario’s lumberjack territory had been envisaged as a bulk tonnage gold mine, hosting 4.2m ounces at 1.1 grams per tonne.

“At the time, it was all about how many ounces, how thick a section you could build,” Palmer explains, “and so for 2 years we happily drilled this thing out. We were getting incredibly thick 100m-plus intersections of one-gram-type material, which was what the bulk tonnage deposits were all aiming for.”

Then in late 2012, hole-256 hit 51m at over 10 gold grams per tonne. “We realised we’d actually been drilling the alteration halo around this high grade system.” Less than 6 months later, the gold price collapsed, heightening market attention to grade and a deposit’s sensitivity to the spot price, knocking bulk tonnage out of favour. “It’s almost like it anticipated what the market was going to do,” Palmer observes. “It’s phenomenal the timing we’ve had.”

In pursuit of its highest grade zone, Probe is now extending the deposit as far as possible to the southeast, with 4 rigs currently turning on the winter ice of Borden Lake. Grades keep increasing, with results in recent weeks of 32 grams per tonne over 19m.

At the PDAC conference in Toronto this time last year, Palmer was widely quoted as saying juniors were being priced as liquidity events and nothing more. The market’s response to Probe’s latest drill results shows how that has changed, sending shares to an all-time high, up 74 per cent in 12 months.

Probe has been the standout performer of 5 companies that gold major Agnico-Eagle Mines bought shares in last year, subscribing to 9.9 per cent of the stock for proceeds of $15m. Already cashed-up from a royalty transaction with Agnico in November 2012, Probe now has cash of c.$30m, with a burn rate of roughly $1m per month.

Drilling as other juniors battle to meet listing fees, Probe, Palmer says, has enjoyed a 20 to 30 per cent drop in its drilling and assay costs since 2011. “Everything’s available and everything is cheaper than it was,” he says. “Gold isn’t our best resource, our treasury is right now.”

“Gold isn’t our best resource, our treasury is right now.”

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