Probe Metals triples resource estimate at Monique deposit in Quebec 

An outcrop at Probe Metals’ Navador project in Quebec. Credit: Probe Metals

Analysts welcomed Probe Metals (TSXV: PRB) tripling the indicated gold resource at its Monique deposit in the Novador project near Val d’Or, Quebec.

The deposit now holds 41.8 million indicated tonnes grading 1.52 grams gold per tonne for 2 million oz. contained metal, Probe said in a news release on Tuesday. That’s up from 672,800 indicated oz. in the previous resource estimate from 2021.

“The updated resource was slightly better than we anticipated,” Barry Allan, a mining analyst for Laurentian Bank, wrote in a note on Tuesday. “We are very pleased with the size and quality of the resource at Novador, reflecting a very successful 2022 drill campaign.”

Toronto-based Probe is expected to follow Monique’s new figures with updates from the Courvan and Pascalis deposits showing 5.1 million oz. total at Novador. The project used to be called Val d’Or East and lies 25 km east of the Abitibi region town. An updated prefeasibility study may be released this year.

“We would expect the resource update to improve economics by adding scale to the project via increasing overall ounces as well as potentially facilitating a higher throughput level compared with the preliminary economic assessment (PEA),” Andrew Mikitchook, a mining analyst for BMO Capital Markets wrote in a note on Tuesday.

“The open pit resource has grown into one pit, combining three smaller pits in the previous resource, which we would expect to be a slight benefit to project economics due to higher efficiencies from mining a single pit.”

Monique’s pit-constrained resource grade improved to 1.42 grams gold per tonne from 1.38 grams gold at the same cut-off of 0.42 grams gold. Updates due within months on the historical resources for the Pascalis and Courvan deposits (1.1 million indicated oz. and 1.6 million inferred oz.) should show “significant improvement,” Probe said in the release.

“Our expansion and conversion programs were highly successful and confirmed the consistency and quality of the Monique deposit,” Probe president and chief executive officer David Palmer said in the release. “We also saw an increase in grade of the pit-constrained resources, reflecting the better-than-expected drill results throughout the year.”

Probe has four rigs drilling at Monique, which remains open for expansion in all directions, the company said. The drilling is part of a 50,000-metre expansion program this year across Novador.

Laurentian’s Allan said he is maintaining a buy recommendation and C$5 price target ahead of a prefeasibility study on Novador.

“After which we intend to revise our estimates to incorporate the significant increase in resources and expected higher capital costs,” Allan said. “We expect that the total resource increase at Novador may largely offset the anticipated increase in upfront capital costs and have a neutral impact on valuation.”

A 2021 PEA suggested an open-pit and underground project capable of producing more than 200,000 oz. gold a year for a 13-year mine life.

Since then, Probe completed 165,000 metres of drilling that has outlined a gold system 2.2 km long, 1 km wide and 600 metres deep. The property lies among three past-producing mines: Beliveau, Monique and Bussiere.

Probe also has with Midland Exploration (TSXV: MD) a copper-gold-silver-molybdenum deposit at the La Peltrie project near Detour Lake, Quebec, about 190 km north of Rouyn-Noranda in the Abitibi region.

Probe shares fell 0.6% on Tuesday afternoon to trade at C$1.78 each in Toronto, valuing the company at C$271 million.