Earlier this month, we issued an update on Trillium Gold Mines Inc. (TSXV: TGM) (OTCQX: TGLDF) and this is an opportunity that has been nothing short of an execution story.
From completing a very oversubscribed private placement to acquiring strategically located mining properties, Trillium Gold is well positioned to execute a series of significant growth initiatives and believe that the market underappreciates the potential value that is associated with the assets that are owned by it.
Enhances Portfolio by Making a Strategic Acquisition
Earlier this week, Trillium Gold announced a strategic bolt-on acquisition and reported to have entered into an agreement to purchase 293 units in 90 claims that cover a total of 5,960 hectares. The property is located east of Great Bear Resources’ Dixie property and is underlain by the Confederation Greenstone Belt of metavolcanic and metasedimentary rocks.
A majority of the property package is located on the Confederation Greenstone Belt and has previously been explored. The operators who previously worked on the property were primarily mining for base metals and either ignored the amount of gold mineralization or never examined the drill samples for gold.
Trillium Gold may have acquired an underexplored property that is strategically located near a large gold discovery (Great Bear) and this could prove to be significant growth catalyst. The acquisition provides the company with the opportunity to explore an area that possibly has gold in the Birch-Uchi greenstone belt and we are favorable on the potential that is associated with it.
One of the reasons we have a positive outlook on the project is related to the geographic makeup of the region. The structural corridor that is associated with Great Bear’s Dixie Project seems to be unbroken and continue along the property that Trillium Gold acquired. The property also seems to have similar stratigraphy and fault structures when compared to other gold producing mines in the region.
We believe that the acquisition falls in-line with Trillium’s strategy of investing in opportunities that are relatively de-risked and have high gold discovery potential. Based on regional aeromagnetic data, the high-strain structural zone that hosts the LP Fault mineralization is traceable from the Dixie Property through the Confederation rocks of the Birch-Uchi greenstone belt. This relationship is suggested to exist for many of the fault splays that cut through the Confederation Greenstone Belt and we are favorable on how this helps de-risk the opportunity for Trillium Gold.
The LP Fault target on Great Bear’s Dixie Project is reported to contain high-grade gold mineralization that is controlled by structural and geological contacts. Trillium Gold believes that the same stratigraphy within the Dixie LP Fault target is present on the Moose and Caribou Creek blocks as well as the Copperlode West claim block. This belief was one of the primary reasons for the acquisition and we are favorable on the analysis that was conducted on the region to determine the potential that is associated with the property.
The Moose Creek and Caribou Creek claim blocks are contiguous to a former Noranda property that contains the Dixie 18 deposit. The properties appear to lie along the “Mine Trend” that hosts the Cochenour and Red Lake Mines that are operated by Evolution Mining.
Historic drilling on the Moose Creek claims by other operators did not include any gold analysis. On the Caribou Creek claims, 6 holes were previously drilled by Lightval Mines and Selco. Lightval only collected 15 samples and two of them showed anomalous gold values. We are favorable on the lack of data that is associated with the potential for gold in the region and find this to be a significant opportunity for Trillium Gold.
An Undervalued Growth Story
At current levels, Trillium Gold is trading at a substantial discount to its competitors and we believe that it has a favorable risk-reward profile. The management team has been excuting on a multi-faceted growth strategy and we believe that the business has substantial potential catlaysts for growth.
In the coming months, we expect the Canadian junior miner to report important data on the properties that it owns and believe that a positive announcement would prove to be a substantial catalyst for growth.
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