Falco Resources (TSX: FPC) Advances Horne Gold Mining Complex Located in Mining-Friendly Quebec
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By
on 3/4/2016
Falco Resources (TSX: FPC) is currently focused on advancing their Horne Mine, gold mining project, located in mining-friendly and supportive Quebec. It is a substantial gold resource, in a well-known mining region, with a very good infra structure. Falco is Planning on building a highly mechanized mine with a team that has a proven record of success.
Vincent Metcalfe, CFO of Falco Resources (TSX: FPC), believes that their company is in a good position to move the Horne gold project, located in Quebec, forward toward production.
Mr. Metcalfe said, “To start off, the most important thing to realize, right now, is that our projects are all located in Canada, in the province of Quebec. They are very well situated in a historical mining area in the Abitibi belt, basically, where several mines have been found over the last one hundred years.”
The company is focused on their holdings at the Horne mine. Mr. Metcalfe said, “Essentially, our main project within Falco Resources is the Horne Mine, which was one of the original discoveries made in 1923 by Ed Horne. That historical mine ended up being the major cash flow project for what became Noranda. That mine stopped producing in 1976 and following that, went into a quasi-dormant position until 2012 when Falco acquired those properties from Xstrata Copper at the time.”
The company’s focus on the property has led to the discovery of a significant amount of gold. Mr. Metcalfe said, “Following that, after four years of digitization and further exploration, we are now basically the owner of a 6.6 million ounce global resource, 81% of which is now in indicated resources. That is basically our first and primary project, but on top of that we have 740 square kilometers of land package around the Horne Mine, which basically covers most of the Noranda area. Within that, you have several historical gold and base metal mines, which were mined in the past.”
Metcalfe stresses that mining in Canada is a benefit. He said, “It is a very desirable land position in the Abitibi belt. From that view, it is very low risk from a geo-political standpoint given that we have a very strong mining culture here in Quebec. We also have a very clear permitting process, which seems to be a problem in certain countries outside of Canada. From that perspective, it is a very safe jurisdiction and a very safe place to work with clear laws and a clear permitting process and on top of that, it is a very prospective land position that we own.”
Financially, the company is in a stable position. Metcalfe said, “At the moment, we have about 110 million shares outstanding. Our current share price is around $0.40 per share. That is in Canadian dollars. In terms of our cash position, we have around $3.5 million dollars in the bank, so we are able to continue the programs in terms of the PEA and additional drilling. We will be coming out with our preliminary economic assessment in the second quarter of 2016. Following that, we will be going straight into a feasibility study. We believe we will be able to release that feasibility study in the first half of 2017. We are advancing at a very, very fast pace.”
The team that is working on the project has a lot of experience in the area and in gold. Said Metcalfe, “We have the right team in place. The management team running the program on the operational side is led by President & CEO, Luc Lessard, who built the Canadian Malartic for Osisko Mining, back in 2007 to 2014. Essentially, Falco is applying the same strategy by going straight from PEA to feasibility. Development will be really quick and following that we will go into construction. It is an area that we know very well, so we can be very fluid.”
Interestingly, the team that is working with them also has a link to Osisko. Metcalfe said, “The largest shareholder of Falco is Osisko and if you include insiders that is about 19%. As mentioned previously, Luc Lessard is in charge of development. Luc was in charge of half the Cambior mine builds, a company that had projects in the Abitibi and South America. Following that, Luc joined Osisko in 2007 and built the Canadian Malartic mine. Luc’s team is also in charge of mining and metallurgy. We have a very good relationship with our third-party consultants and have conversations with them on a daily basis to help us get the results that we want to get for the PEA.”
The Falco team has very specific goals for the project and believes that it is a benefit to investors. “We think first off, what we are trying to build here is a highly mechanized mine. We are not looking at the historical ways of mining. We want to have as much mechanization as possible. We are using very large equipment and are trying to use new technologies like remote guided trucks. The management is a major plus from an investor point of view, given that we have done this before and know where we are going. The jurisdiction is a benefit because we have seen a lot of projects being put on the back burner because of geo-political issues with taxes or control. Quebec offers a good opportunity to develop these projects. At the moment, our land package is somewhat underexplored given the situation with the markets. There is a lot of upside with a lot of that land package. Our focus is to develop Horne 5, but there is more to be discovered in our land package.”
Metcalfe points out that the company is trading below value. He said, “Essentially, what is important is to realize that, at our current valuation, we are trading at four dollars to six dollars an ounce. We are probably half that valuation compared to our peers. We have 6.6 million ounces and we have access to hydropower, rail, highway, major suppliers and a strong and experienced labor pool. And furthermore, given our location we will not require a camp. It is a function of having the right project in the right place. The valuation is probably quite low and is a good option for investors right now.”
http://www.falcores.com/
Falco Resources Ltd.
1100, avenue des Canadiens-de-Montreal,
Suite 300, Montreal, QC H3B 2S2
Tel: +1.514.905.3162
info@falcores.com
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