Balmoral Resources (BAR, TSX)

Good week for Balmoral Resources (BAR, TSX) so far – up 3.5 cents or 20%, matching the pace of hot neighbor Wallbridge (WM, TSX) which added a few pennies today to close at 61.5 cents (the highest closing price for that stock in more than 12 years).

Immediate BAR Catalysts:

• Tranche 2 of Balmoral’s financing is scheduled to close next Friday, November 8.  Upon closing and receiving their $1 million Quebec government rebate, Balmoral’s working capital will be approximately $6.5 million.
• Assay results from 9 drill holes will be released shortly after the closing of the PP.  Balmoral fully expects to both confirm and expand upon its Area 52 discovery (14 g/t Au over 3.3 m).

You’ll want to pay close attention to the language used in Balmoral’s November 8 news release because a certain “deep pocketed” investor who owns 20% of Wallbridge (WM, TSX) wrote a $1 million check to Balmoral.  Of course, if the name Eric Sprott is mentioned it should be a boost for BAR.  Sprott is a smart and strategic investor, so given Balmoral’s 1,000 sq. km land package along the Sunday Lake Deformation Zone, completely surrounding Fenelon, it certainly makes sense that he participated.

Phase I of drilling Area 52 proved the monzonite is there!  That’s an important clue because monzonite is the same preferential rock type hosting high-grade Gold next door at Fenelon (27 g/t Au over 38 m juiced Wallbridge’s market cap by nearly $150 million).  Also important, and another clue concerning Balmoral’s upcoming results, is all 9 drill holes tested this shear zone and nothing else (that’s telling because they were seeing the right rocks and didn’t need to move the rig).

While they were pleasantly surprised to hit Gold mineralization in the sediments, 14 g/t Au over 3.3 m, higher grades tend to be hosted in rocks that are more brittle – nearer to the contact of the east-west monzonite body.

With the next round of results Balmoral fully expects to both confirm and expand upon their Area 52 discovery.  Mineralization appears to extend from bedrock down to at least 200 m (Wallbridge is hitting high-grade between depths of 600 and 700 m). Phase III has already been planned.

“Impressive” is the word I’m using to describe recent price action in BAR.  Even with a $3.5 million financing looming over its head, BAR has been able to move from 15 to 21 cents (special thanks to Wallbridge for generating some excitement with 27 g/t Au over 38 m!).

This short-term chart and the long-term chart agree on 1 key point – a breakout above 24 cents would be highly significant.  Mark our words, it’s going to happen – only a question of exactly when.  

Ahead Of The Pack:  Directly from the company, I’m told 10+ analysts and newsletter writers are now covering BAR.  That’s a 10-fold increase compared to when BMR initiated coverage on BAR – great news!  The Balmoral story is finally getting told in a more widespread manner.  With Balmoral’s financing scheduled to close November 8, assay results that are expected to confirm and expand the Area 52 discovery, plus 30,000 m worth of core samples yet to be released by Wallbridge, I don’t think the timing could be any better. The stage is set.

The Asset Underpinnings:  

1. Grasset: Indicated resource of 3.5 Mt grading 1.56% Ni, 0.84 g/t Pd, 0.34 g/t Pt, and 0.17% Cu. Grasset is one of the largest Nickel sulphide deposits in Canada’s Abitibi region, and the only North American Nickel sulphide deposit with >50,000 contained tonnes of Nickel and an average Nickel grade of over 1.5% not controlled by a major mining company.
2. Martiniere: Pit-constrained (open-pit) resource of 6.8 Mt grading 1.9 g/t Au, or 431,000 ounces. The vast majority of the 9.5 x 7.0 km Martiniere Property remains untested beneath extensive overburden cover.

Balmoral’s foundation has been built. They’ve got a Nickel deposit (Grasset uses $6.50 Ni) and a Gold deposit (Martiniere uses $1,300 Au).  Both provide exposure to underlying metal prices and both offer exploration upside.

That’s all well and good, and those assets underpin Balmoral’s $30 million market cap, but right now the market is demanding “discovery holes”!  So you and the market should be pleased to know Balmoral will be actively exploring and drilling for new discoveries this winter.

As of now, Balmoral’s winter exploration program is scheduled to include Phase III drilling at Area 52, resource expansion drilling at Grasset to extend the high-grade core, drilling geophysical signatures at Grasset Central to build upon massive sulphide intercepts from last year (4.1% Ni and 3.6% Ni), and grassroots drilling directly through the Bluenose anomaly (100%-owned RUM Project).

Located in the Lac Rocher Nickel district (Quebec), Bluenose is a Lac Rocher look-alike.

The Bluenose prospecting discovery features Platinum, Palladium, and Gold values which are several times higher than those at Lac Rocher. The EM anomalies located along the margins of the Bluenose intrusion are also significantly stronger than those observed over the Lac Rocher deposit. Testing of the EM anomalies at Lac Rocher intersected massive sulphide mineralization locally yielding 7% to 11% Nickel grades.

Between you and me, the geologist who helped discover Lac Rocher is rumored to have bought 1 million shares of BAR in advance of what he believes will be a drilling discovery. When you drill through the Bluenose anomaly you will hit massive sulphide Nickel, said the Lac Rocher discoverer.