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Abitibi Royalties Inc
Symbol RZZ
Shares Issued 12,530,210
Close 2019-09-09 C$ 15.00
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Abitibi RPs outline East Malartic resource estimate

2019-09-10 08:30 ET - News Release

Ms. Shanda Kilborn reports


Abitibi Royalties Inc. has provided an update on the company's net smelter royalties (NSR) at the Canadian Malartic mine, Canada's largest gold mine, near Val d'Or, Que.

Royalties at Canadian Malartic mine

The Canadian Malartic mine, where Abitibi Royalties owns various NSRs and a net profit interest (NPI), is jointly operated by Agnico Eagle Mines Ltd. and Yamana Gold Inc. Abitibi Royalties' NSRs and NPI cover portions of East Malartic (3-per-cent net smelter royalty), Odyssey (3-per-cent NSR), Sladen (3-per-cent NSR), Sheehan (3-per-cent NSR), Jeffrey (3-per-cent NSR), Barnat Extension (3-per-cent NSR) and portions of the Gouldie zone (2-per-cent NSR) and all of the Charlie zone (2-per-cent NSR). In addition, the company acquired a 1.5-per-cent NSR on the Midway project and a 15-per-cent NPI on the Radium property last year, which are all operated and located at the Canadian Malartic mine.

Updated resource estimate for East Malartic

On Sept. 9, 2019, Yamana issued an initial resource estimate (as of year-end 2018) for East Malartic below a depth of 1,000 metres. Previously released resource estimates for 2017 and 2018 at East Malartic were estimated from surface to a depth of 1,000 metres. Inferred mineral resources at year-end 2018 below 1,000 metres totalled 2,962,000 ounces of gold (47.4 million tonnes grading 1.94 g/t gold).

Recent exploration activities at East Malartic have focused on deep drilling on the Sladen and South Sladen structures, where drilling continues to expand the deeper mineral envelope with widely spaced drilling. Significant drill results, including drill hole information, can be found in Yamana's news release dated Sept. 9, 2019.

For the portion of the resources covered by Abitibi Royalties' NSRs as of Dec. 31, 2018 (excluding any potential additions from the updated resource below 1,000 metres), please see the company's news release dated March 14, 2019. The company anticipates receiving an updated resource estimate for areas covered by its NSRs at the Canadian Malartic mine in late Q1 or early Q2 2020. Please see the company's technical information and mineral resource reporting notes sections for more information.

Exploration areas of interest

Yamana also announced a new discovery at the Canadian Malartic mine named East Gouldie. Exploration drilling suggests that East Gouldie may potentially trend north onto the company's 3-per-cent NSR at depth. However, the company believes additional drilling is required to make this determination. Yamana states that East Gouldie, East Malartic and Sladen zones are converging at depth, increasing the level of confidence in the economic potential of the overall resources below 1,000 metres and the prospect for a large underground bulk tonnage opportunity.

Exploration work is also continuing on the Midway and 117 zones. The company holds a 1.5-per-cent NSR on the Midway property (1 per cent can be repurchased for $1-million (U.S.)). The company believes the 117 zone is located near the Trans-Canada Highway (Hwy. 117), which runs through the company's royalty areas. However, it is not known what impact, if any, the 117 zone will have on the company's royalties.

Technical information

Please see the company's news release dated March 14, 2019, to view the resources covered by Abitibi Royalties' NSRs at the Canadian Malartic mine as of Dec. 31, 2018, which excludes any potential additions from the East Malartic zone below 1,000 metres as outlined in this news release. The company expects to receive an updated resource estimate for areas covered at by its NSRs at the Canadian Malartic mine in late Q1 or early Q2 2020. The company can make no assurances that the deep drilling on the Sladen or South Sladen structures is contained within the company's NSR as parts of the deep Sladen zones are known to straddle the royalty boundary to the west and south. In addition, there is no assurance that the East Gouldie zone may trend onto the company's NSR at depth. Additionally, although the company's 3-per-cent and 1.5-per-cent NSRs cover large portions of the Trans-Canada Highway (Hwy. 117), the company is not yet aware of the location for the 117 zone referenced in Yamana's Sept. 9, 2019, news release.

Mineral resource reporting notes

  • Price assumption: $1,200 (U.S.)/oz gold.
  • Underground cut-off grade at East Malartic underground ranges from 1.25 grams per tonne gold to 1.40 g/t (stope optimized).
  • Metallurgical recoveries for gold is 95.5 per cent.
  • Mineral resources have been calculated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101.
  • Mineral resources are reported exclusive of any mineral reserves.
  • Mineral resources which are not mineral reserves and do not have demonstrated economic viability.
  • Mineral reserves and mineral resources are reported as of Dec. 31, 2018. The inferred mineral resource figures at East Malartic below 1,000 metres have not been previously reported.
  • Results are reported inclusive of internal dilution.

Pascal Lehouiller, PGeo, of Canadian Malartic Corp., is the qualified person responsible for the mineral resource estimates.

Qualified person

Glenn J. Mullan, chairman, is the qualified person (as that term is defined in National Instrument 43-101 Standards of Disclosure for Minerals Projects) who has reviewed and approved the technical sections of this news release which are solely based on and derived from information contained in Yamana's Sept. 9, 2019, news release and without independent verification.

About Abitibi Royalties Inc.

Abitibi Royalties owns various royalty interests at the Canadian Malartic mine near Val d'Or, Que. In addition, the company is building a portfolio of royalties on early-stage properties near producing mines. The company is unique among its peers due to its strong treasury, no debt, quarterly dividend, share buyback program and limited number of shares (approximately 12.5 million).

We seek Safe Harbor.

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