Sometimes a company’s story almost writes itself.
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Such is the case for Benchmark Metals (BNCH.V; BNCHF.OTC) and the compelling tale of resource growth and share price catalysts it has in its Lawyers project in northern British Columbia.
It starts with a great location near key roads, power and mining infrastructure.
Then there’s the resource Benchmark is building on at Lawyers and the prospect that aggressive drilling last year could soon result in a multi-million-ounce gold-equivalent resource.
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Follow that up with a preliminary economic assessment due over the next few months, and it’s easy to see that analysts and the market will soon have ample reason to revalue Benchmark much higher than today’s levels.
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Finally, thanks to the C$35 million it has in the bank, Benchmark has the resources to continue drilling Lawyers aggressively in 2021 with a 100,000-meter program that could see its resource double by 2022.
Simply put, Benchmark’s story of resource growth and rapid project development is one that should do very well in any market and should really shine when gold prices resume their upward climb.
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A Prime Location Along The “Golden Horseshoe”
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Setting the table for that story is Lawyers’ location within the “Golden Horseshoe” that comprises a series of large and high-grade deposits in northern British Columbia.
Encompassing a combination of world-class copper-gold deposits and uber-high-grade precious metals deposits, this area traces its horseshoe shape north from BC’s “Golden Triangle” to the Yukon border and then over and down into the Toodoggone district that hosts Lawyers.
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As you can see from the map above, Benchmark’s project sits just 45 kilometers from Centerra’s Kemess copper mine and its power access.
Combine that with good road access and the fact that this part of the province is one where new mines get built, and Lawyers has all the needed infrastructure to attract the attention of an eventual takeout suitor.
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Just Weeks Away:
A Major Resource Update
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But it’s the near-surface, bulk-tonnage resource itself that Benchmark is outlining on the project that’s providing the near-term kicker for the company.
After completing more than 87,000 meters of definition and expansion drilling on the project’s three core resource areas in 2020, BNCH is just weeks away from releasing a maiden, bulk-tonnage resource estimate for the project.
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The new estimate will include resources from the Cliff Creek, Duke’s Ridge, Phoenix and AGB areas.
Last year’s drilling on these targets has established wide haloes of lower-grade bulk-mineable gold-silver mineralization interspersed with narrower intervals of higher-grade mineralization.
The majority of the gold-equivalent ounces are within 300 meters from surface. Higher grades encountered at depth open up the possibility of an underground operation later in the mine life of Lawyers.
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With management signaling to the market that it anticipates the maiden resource to come in at roughly two million ounces gold-equivalent resource, a key catalyst for Benchmark’s share price is right around the corner.
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And that will be quickly followed by a second catalyst — a PEA on the bulk-tonnage resource that’s due out in Q2 2021.
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Aggressive Drilling This Year
Aims To Grow The Resource Even Larger
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Initial metallurgical tests have shown excellent recoveries for the ore at Lawyers, with 98% gold recoveries and 97% silver recoveries.
That bodes well for Lawyers as Benchmark advances the project toward a feasibility study in early 2022.
In the interim, there’ll be plenty of room for further growth via a massive, 100,000 meters of planned resource expansion and exploration drilling in 2021.
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As the map above indicates, Lawyers has two discovery zones (Silver Pond and Marmot) to test, plus numerous exploration targets.
Given the understanding of the mineralization that BNCH has acquired from drilling the project’s initial resource zones, management is confident that this work can unearth satellite deposits and extend those existing resources at Lawyers.
What’s the potential?
Well, the drill bit will tell the tale, but Benchmark sees a legitimate shot at doubling the resource yet again at Lawyers when it generates a follow-on resource estimate in late 2021 or early 2022.
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Compelling Catalysts
+ Rising Gold Market
= Outsized Gains
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As the company moves the Lawyers project systematically and aggressively along the development curve, here’s what investors in BNCH have to look forward to:
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• A maiden bulk-tonnage resource estimate, due in weeks, that could show Lawyers to host a two-million-ounce-plus, gold-equivalent resource
• A preliminary economic assessment due in Q2 2021 that should establish that resource as an attractive, profitable development-stage deposit
• A 100,000-meter drill program throughout 2021 that will feed the market a steady diet of assays and potentially allow the Lawyers resource to double yet again in the next 12 months
• A 2022 feasibility study that should make the project one of the more alluring takeout targets on the market
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The graphic below shows management’s vision for how those catalysts will impact Benchmark’s valuation.
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As the company begins hitting the milestones its has set for itself, a re-rating that results in a very significant increase in Benchmark’s market cap — one that promises to richly reward shareholders — seems likely.
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And that’s just assuming a relatively flat gold market. If the yellow metal begins to take off again, a story like Benchmark’s could be one of the sector’s top performers.
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