With A New World-Class Mining Camp, Has Northern Superior Just Made Itself Very Valuable To IAMGOLD?

Northern Superior Resources Inc, (TSX.V: SUP) NSUPF just published a mineral resource on its Philibert Project located in the rapidly growing gold camp of Chibougamau, in Quebec, Canada, and made itself very valuable to IAMGOLD IAG.

IAMGOLD, a distinguished gold producer with a market capitalization of CA$1.6 billion as of this writing, has navigated a successful transition period. After undertaking the construction of the Cote Lake Project in Ontario, the project faced construction cost overrun, and the company faced further capital requirements. Against most expectations, IAMGOLD was able to redress its balance sheet during a challenging period for mining M&A and adroitly divested several assets in South America and Africa. This paved the way for the completion of the construction of Cote Lake and, in the process, repositioned IAMGOLD as a leading Canada-focused developer.

Once IAMGOLD has Cote Lake performing as desired, it is expected to transition towards its next stage of development, which could potentially be the rapidly growing gold camp of Chibougamau, in Quebec, where it already owns the Nelligan and Monster Lake projects.

The Chibougamau gold camp has been a popular destination for exploration companies for quite some time, and things became even more active with the discovery of Nelligan by Vanstar Mining. IAMGOLD now owns 75% of Nelligan, which was crowned the “Discovery of the Year in 2019”.

Recently, IAMGOLD published a new resource calculation on Nelligan with 5.6 million oz of gold (3.6M oz inferred and 2M oz indicated). IAMGOLD also owns the Monster Lake Project only 15 km away. Gathering nearby assets to create synergies is not a new strategy; it is common across industries. Several successful companies such as Agnico Eagle AEM, have made this central to their philosophy with mining hubs across the globe.

And now comes Philibert.

Northern Superior just published a mineral resource estimate on Philibert, which is only 9 km away from Nelligan. If IAMGOLD is already looking at Monster Lake 15 km away, it may see Philibert on the same horizon.

Northern Superior just established the resource at Philibert at 2 million oz (1.71 million oz inferred and 0.28 million oz indicated), which is 35% of Nelligan’s size and therefore very relevant. But just as importantly, it has a higher grade.

The resource at Philibert carries 1.10 gold per ton (g/t), which compares favorably to the 0.87 g/t at Nelligan. An additional 0.23 gram holds significance – the company is mining something that is concentrated at only 1g per ton of rock. One gram of gold is very small (less than half the size of a dime), and the company is extracting this from a ton of rock, which is no small feat. Philibert can provide 25% more of that small amount of gold after processing a ton of rock. Within a large mining operation, it makes a major difference and significantly lowers the payback period. A quick payback period is one of the most important attributes of a project when it comes to attracting capital, which is what turns projects into mines.

From the company’s press release, we can also see that the Philibert Project has a lot of room to grow with:

• Zones within the theoretical 3 km pit that could become resources with further drilling;
• The possibility of finding replica zones of mineralization to the north potentially duplicating the resource, and
• Geophysics that seem to indicate the mineralization could extend for several more kilometers along strike in both east and west directions.

The gold camp of Chibougamau may have just got itself a big shot in the arm, but this camp is more than Nelligan, Monster Lake and Philibert. With decades of exploration, several other deposits were discovered, and Northern Superior made it core to its strategy to consolidate them. This now includes the Lac Surprise, which is literally adjacent to Nelligan and could reveal itself to be an extension to the deposit. It also includes Chevrier to the Northeast and Croteau to the North.

By combining it all, this camp would already encompass approximately 10 million oz, which already ranks it as a world-class camp, with the potential for each project able to grow further.

Looking at the value of the company compared to the number of oz the company now has as classified resources, Northern Superior may be attractive to some investors. Additionally, the company recently announced a spin-off of its Ontario assets, which includes its iconic TPK Project near the Ring of Fire and the October Gold Project located near Cote Lake of IAMGOLD.

TPK has been the focus of many specialist investors and geologists for several years, and Northern Superior finally received its exploration permit earlier this year. Since then, the company reports that Barrick Gold has circled it up and acquired land all around TPK.

If TPK is successful, it could greatly benefit Northern Superior which will remain the largest shareholder of the new company.

Featured photo by Wilhelm Gunkel on Unsplash.

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