QC Copper and Gold Inc.'s (QCCU:TSX.V; QCCUF:OTCQB) Opemiska Deposit in Quebec consists of 81.7 million tonnes @ 0.88% copper equivalent (CuEq) of pit-constrained Measured and Indicated mineral resources and 21.3 million tonnes @ 0.73% CuEq of Inferred mineral resources. The resource is pit constrained and contains more than 532,000 tonnes (or 1.17 billion pounds of copper and 816,000 ounces of gold) in the Measured & Indicated (M&I) classification and an additional 109,000 tonnes (or 240.3 million pounds of copper and 209,000 ounces of gold) in the Inferred classification.
Over 82% of the total mineral resource reports to the M&I classification. Within the larger resource, the company has identified a high-grade potential starter pit of 10.6 million tonnes of M&I Resources grading 1.26% CuEq. The mineral resources are using pit optimization algorithms and a 0.2% CuEq cut-off, inclusive of US$3.50/lb copper and US$1,650/oz gold prices.
Regarding this accomplishment CEO Stephen Stewart commented to Mining Stock Education that it was a “major milestone and something that we've been working on for years.… to be able to get over that global envelope of 104 million tonnes at 0.85% copper equivalent, which equates to nearly two billion pounds of copper in the ground”…“So, we're over the moon. That's over $8 billion of gross metal value in the ground in the best mining jurisdiction in the world.”
Potential to Double the Resource
Stephen Stewart said QC Copper and Gold will aim to double the size of its approximately 2 billion CuEq pounds deposit. The company has outlined multiple targets for expansion and discovery drilling this coming winter. These targets include extensional drilling to expand the existing mineral resource envelope, proximal former mines including the adjacent Cooke & Robitaille deposits, and other prospective targets along the Gwillim and Beaver Lake fault zones.
Stewart stated, “This is going to get bigger. There is no question about it.…Our shareholders and followers can expect us through the balance of this year and obviously 2022 to get out there and expand in and around this super-pit.”
Opemiska Catching the Eye of Producers
Opemiska is receiving interest from producers and potential strategic partners, Stewart shared. However, he is not willing to give away too much of Opemiska’s value too early:
In terms of getting interest from producers, we've had, over the past year or so, a lot of interest. Smart money, smart investors have taken notice, but also strategics. So we have shown them our database. Prior to this resource, we have had some very interesting phone calls when the resource came out. We certainly entertain interest from strategic partners, but it would have to be on the right terms. To be honest with you, all else equal, there's ample capital available to us today from institutional and retail investors. I think that's the best course for us not to get married immediately. So that's probably the route we'll take. And when the time is right, when we build the value, when we are, multiple nine figure valuation, that's when we could consider getting a dance partner, if you will.
Potential CAD$500M Valuation says Stewart
Before the release of the Opemiska resource last week, QC Copper and Gold was valued at less than a CAD$30 million. Stewart believed the company was deeply undervalued then, especially because QC Copper and Gold also owns about CAD$14 million worth of Baselode Energy (TSXV:FIND) shares. But even after a nice share price rise since the resource announcement, Stewart argues his company is still grossly undervalued and is best compared to Marathon Gold with its Valentine Gold project:
To me, the best comparable is Marathon Gold. So Marathon's got six to seven million ounces. They're bigger than us right now. They're a touch higher grade, but in the seven to eight-hundred-million-dollar market cap range. That's a bold statement from a company that's got about a CAD$30 million market cap. But when you look at the assets, we're not that far off. And so we're day one, we got a ways to go. We're going to grow this resource, but to me, that's the target. I think this thing has a $500 million valuation on it, all else equal. Well, that's the direction I'm going to take this company.
Bill Powers is the host of the Mining Stock Education podcast that interviews many of the top names in the natural resource sector and profiles quality mining investment opportunities. Powers is an avid resource investor with an entrepreneurial background in sales, management and small business development. His latest interviews can be found at MiningStockEducation.com.
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