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Major miners are increasingly looking at British Columbia to help grow their copper and gold reserves.
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BC porphyry deposits of the two metals have come into vogue as they offer copper and gold at a scale that can make a meaningful impact on a major’s reserve portfolio.
The gold makes for a nice sweetener for base metals miners and a way for gold-focused majors to secure multi-million-ounce deposits.
Bottom line: The Canadian province is also enjoying a renaissance as a porphyry copper-gold destination because it’s a safe jurisdiction at a time major copper producing jurisdictions like Chile and Peru are having political problems.
All this lines up perfectly for Amarc Resources Ltd. (“Amarc”) (AHR.V; AXREF.OTC), which owns three porphyry copper-gold districts, located along the main corridor for copper-gold porphyries in British Columbia. As you’re about to see, all three of these districts contain copper-gold deposits and a pipeline of deposit targets, adding to Amarc’s tremendous exploration upside.
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Two of these districts have attracted major partners, Freeport-McMoRan and Boliden, to invest up to a combined C$200 million in non-dilutive funding to earn a share in the projects.
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In addition, Amarc has also recently acquired a fourth compelling porphyry copper-gold project. While very little has been disclosed about this asset, they will be revealing more about the project which could add even more upside for shareholders.
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The JOY District:
A C$110 Million
Earn-In Partner
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The first of the districts is Amarc’s 100%-owned JOY District, located in northern British Columbia in an area known as the Golden Horseshoe, which also includes the prolific Golden Triangle and world class porphyry copper-gold deposits and mines such as Galore and Red Chris.
The 492 square-kilometer JOY land package is host to the open-ended Pine copper-gold deposit and home to a significant pipeline of copper-gold deposit targets clustered nearby.
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This collection of deposits and targets convinced Freeport-McMoRan, a world class producer, to sign a huge, C$110 million staged earn-in partnership on the project.
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Under that deal, Freeport-McMoRan must spend C$35 million on JOY over a five-year term that started in 2021. That level of investment will earn it a 60% interest in JOY. It can then earn an additional 10% by funding a further C$75 million within the following five years. To date, Freeport-McMoRan has spent in excess of C$16 million. Amarc is the operator in the initial stage which is testament to the team’s credibility.
The deal reflects the first-class potential that the JOY District offers, lying within the Golden Horseshoe and adjacent to the north of the prolific Kemess mine district, which includes the past-producing Kemess South project, the development-stage Kemess North underground deposit and the advanced-stage Kemess East deposit.
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Because of these nearby mine developments, JOY enjoys superior infrastructure access in terms of roads and rail. It also enjoys cheap power from nearby hydro sources.
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This infrastructure advantage is a huge selling point for majors like Freeport-McMoRan, which look for deposits they can cost effectively put into production.
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The DUKE District:
Another C$90 Million Funding Partner
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Infrastructure is also an advantage at Amarc’s DUKE District, located in central British Columbia.
This 678-square-kilometer district lies within an area of active forestry and past mining. As such, it too has the road, rail and power access a large deposit would need for development.
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In November 2022, Amarc signed a C$90 million funding agreement with Boliden, under which Boliden can earn up to a 70% interest in the project.
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To earn a 60% interest in DUKE, Boliden must spend C$30 million on exploration within four years. It can then earn a further 10% by funding another C$60 million over six years. Again, during the initial stage Amarc is the operator.
The project features the DUKE deposit, which has seen only 21 mainly shallow and widely-spaced drill holes so far. That drilling has to date focused on a small portion of a large mineral system outlined by geophysical surveys that extends over some 3-square-kilometers.
In addition, Amarc has already identified 12 new porphyry copper targets at DUKE. Boliden and Amarc’s drill program to delineate the DUKE deposit and other targets, commenced immediately on signing and is well underway.
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IKE:
Still Another District-Scale Project
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Finally, Amarc also has the 673-square-kilometer IKE District in south-central BC in its portfolio.
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This project, too, is situated near all key infrastructure and has two important deposits to its credit, the IKE and Empress deposits.
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The IKE deposit is a large discovery by Amarc of porphyry copper-molybdenum-silver mineralization that remains open in all directions.
The Empress deposit has yielded higher grade intersections, for example, 76.1 m @ 1.74% copper equivalent1 at 0.92% copper and 1.42 g/t gold and 52 m @ 1.10% copper equivalent at 1.10% copper and 1.21 g/t gold. Many of these intersections are well above the average grade of mined porphyry copper-gold deposits in British Columbia.
Given its potential, we will see if Amarc chooses to progress the Empress itself or attracts another lucrative funding partner.
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Led By A Team With A Track Record
Of World-Class Copper-Gold Discoveries
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All three districts stand a better chance of becoming significant copper-gold discoveries because of the track record of the Hunter Dickinson Inc. group of companies to which Amarc belongs.
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Over the past three decades, Hunter Dickinson group companies have identified, advanced and sold off a number of porphyry copper-gold projects, including Mt. Milligan, Kemess South and Xietongmen.
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In addition to Canadian Mining Hall of Famers Robert Dickinson and Mark Rebagliati – recognized for their global discoveries – Amarc has Charles Greig as a technical advisor. Greig led the team that discovered GT Gold’s Tatogga copper-gold porphyry in northwest BC. GT Gold advanced Tatogga to the point where Newmont bought GT Gold for C$393 million in 2021.
Greig joins other copper-gold porphyry bugs on Amarc’s leadership team in believing that Amarc’s projects offer similar potential.
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News Is About To Start Flowing
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The best news of all for investors is that the large funding deals Amarc has signed with Freeport-McMoRan and Boliden are about to start paying dividends in terms of news flow.
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Freeport-McMoran and Amarc were able to conduct a robust exploration program at JOY in 2022 and results from that program, including 37 drill holes as well as soil sampling, mapping and geophysics data; will start coming back from the lab at any time.
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Meanwhile, as mentioned, Boliden and Amarc have commenced a robust exploration program, including drilling, at the DUKE deposit and District.
In short, the drills are turning right now. And unlike many other BC exploration companies, Amarc can drill…all...year…long. So exploration results should be plentiful enough to keep investors interested.
With a market cap that in no way reflects the outsized potential of these districts, the huge JV deals it has struck for them, and more to come, Amarc looks primed for a profitable re-rating in the days just ahead.
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