Sprott’s Thoughts: “Oh My God, How Good Is That!”

We were saying the next news release from Wallbridge Mining (WM, TSX) could be a real barn burner, and it was!

27 g/t Gold over 38.4 m!

The initial price jump (high 30’s to mid-40’s) last Tuesday was probably less than what many WM shareholders were hoping for, but given the share count (480 million outstanding), an instant market cap appreciation of nearly $30 million based on 1 drill hole wasn’t too shabby!  The stock strengthened as the week progressed, finally overcoming the 47-cent resistance John had noted on the chart to close Friday at 50 cents – a 43% gain for the week.

Wallbridge and its shareholders now anxiously await more assay results of surrounding batches from this hole (FA-19–086) which, based on the mineral assemblages described, should carry some additional Gold mineralization.  In other words, hole 86 might be even better than it appears at the moment because assays from a portion of it haven’t been released yet.  Additionally, assays are still pending for 28 surface drill holes and 53 underground holes, for a total of about 31,000 m worth of core.

With Wallbridge drilling the heck out of Fenelon, it’s becoming easier to see that Fenelon is more than just 30,000 ounces of Gold in a nuggety deposit suited for small scale mining as Balmoral (BAR, TSX) characterized it after selling Fenelon for $3.5 million plus an NSR.

Gaining underground access and drilling deep holes isn’t cheap, but it can pay off handsomely.  I can’t imagine how many exploration companies have “walked away” from rich deposits like Fenelon over the decades because they didn’t drill wisely or deep enough.  You’ve gotta have some guts and take some risks in this business.  Many management teams are probably playing it too safe (partly because they’re bad strategists and partly because they’re protecting their lifestyles), and in doing so they’re robbing themselves and all shareholders of great wealth creation opportunities.

So, getting back to where we started, Wallridge has 480 million shares outstanding.  But a “blown out” structure, which may have kept many would-be speculators out of WM, didn’t stop CEO Marz Kord from generating 5 x returns following the Fenelon acquisition in 2016.  He diluted the stock, but he also delivered results.  That’s a rarity in this business.

Eric Sprott, a 19.9% equity owner of Wallbridge, is very happy with his position right now!

Here’s his latest on WM from his weekly news wrap-up:

• Oh my God, how good is that!  And the suggestion they may have other intersections that are also very wide down at about 500 and 600 m.  Oh my God, what could be happening here?  This could be dramatic.  This could be very, very, very dramatic.
• There’s a 1-km strike length to the Tabasco zone.  If this thing ever went the whole kilometre at depth, with those kind of intersections, it would be one of the great deposits in the world.
• I said before I hoped it could be like Detour Lake.  Detour Lake is 20 million ounces, and you know what, it’s looking better than Detour Lake now!
• Mines in the Abitibi can go down 4 km and we’re only at 500 to 600 m right now.  “I think there’s going to be lots of strategic interest in Wallbridge, so hang in there.”

Some of you guys and gals who’ve been around for a while might remember this thing called an “area play”.  Well, area plays might not exist in today’s tepid market but they will return sooner or later.  Therfore I maintain my belief that what’s good for Wallbridge will ultimately be good for Balmoral.  Given the +20 million ounces to the west at Detour Lake and what’s shaping up to the east at Fenelon, it’s starting to look like the Sunday Lake Deformation Zone could be loaded with Gold (possibly Nickel, too), not unlike with other great belts within the Abitibi.

Balmoral controls approximately 1,000 sq. km of claims along the Sunday Lake Deformation Zone.

A small glimpse of speculative fervor appeared Tuesday morning as BAR opened at 20 cents, up about 25% on the back of the 27 g/t Gold over 38.4 m intersected nearby!  While I think those speculators’ hearts were in the right place, they were quickly reminded that area plays don’t really exist right now – BAR slumped back down and actually closed in the red that day.

However, the patient “smart money” spoke loudly Thursday morning when Balmoral increased its previously announced private placement financing for the 2nd time, up from the original $1.4 million to $3.7 million.  You can be sure that Eric Sprott is part of that.