Cartier's flagship project is the old Chimo Mine in Quebec. This was a past-producing mine with a deep shaft and working at many levels. It was closed when the price of gold made it uneconomic. There was plenty of mineralized rock left in the old mine. Quebec is an excellent mining jurisdiction and permitting "brownfield" sites is a straightforward process.
Cartier drill tested the old mine and actually drilled beneath the mine to prove up additional mineralization. But Cartier also drilled step-outs from the old shaft.
The strategy was to discover sufficient new mineralization that the old mine would become attractive to a senior mining company with the capital to de-water the old shaft and the ability to extend the old workings into the new mineralization Cartier was discovering.
Cloutier wanted to increase shareholder value by expanding the areas of mineralization, but he was in no rush to declare a 43-101 compliant resource. Instead, the company drilled and created a significant data set that experienced geos under non-disclosure agreements could evaluate for the companies they represented.
Cartier did not want to develop the mine itself - although that always remains an option - rather it wanted a senior miner to buy the mine outright or create a joint venture.
Up until the beginning of the current gold and silver rally the market was unsympathetic to Cloutier's vision. (Fortunately, he had backing from several major backers including Agnico Eagle with a 17% stake in the company and JP Morgan UK with 8.3% - see corporate presentation.)
Recently, since June, V.ECR has gone from $0.11 to today's price of $0.20.
Knowing Cloutier he is, no doubt, delighted by the move but he is aiming much higher.
In my book Gold $3000 | Silver $60 I look at what happened to companies like Cartier in the 2008-2011 rally. As that rally peaked it was not uncommon for advanced juniors to see 500 to 2000% price jumps.
Cloutier has an exit strategy and plenty of interest from senior and mid-tier miners who would like to get a working gold mine for a CAPEX of 30 to 50 million dollars rather than 300 to 500 million.
We are in the very early stages of the rally and smart junior investors are going to be looking for companies which are undervalued, have near 43-101 reported resources and have a solid exit strategy to provide a return to shareholders. There are not that many of those sorts of juniors out there.
In Gold $3000, part of my investment thesis is that many juniors have been so undervalued by the market that they have virtually no downside. Even after nearly doubling in three months, Cartier Resources is firmly in that category. And, in my view will stay in that category right up to $0.75.
Worth a look (Yahoo Finance ECR) Company Website
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