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Figure 2. Subject Company's Logo
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Fancamp Exploration Ltd. (TSX-V: FNC)
Fancamp Exploration Ltd. is a Canadian mineral exploration mining company listed on the TSX Venture Exchange (ticker symbol FNC). The Company has come to our attention due, in part, to the exceptional opportunity afforded shareholders as FNC.V has interests in multiple properties that are significantly advanced, and poised to yield impressive returns. Fancamp Exploration has a 25 year history of successful exploration and advancing projects, and over the last couple years FNC.V has amassed an array of projects it has vended to partner companies in exchange for cash, shares, and royalties. FNC.V also has a portfolio of projects it is advancing for eventual spin-off.
The cumulative discounted inherent value of these assets is large, and it Mining MarketWatch Journal believes the share price of FNC.V is poised for upward revaluation to reflect so. Below is an overview of several of FNC.V's key interests in more detail:
1) FNC.V owns 18 million shares (representing ~10%) of Champion Iron Mines Ltd. + FNC.V owns 1.5% NSR
(Symbol: CHM.TO -- trading at ~$0.335/share as of Feb 14, 2014)
Champion's iron ore project approaches feasibility
Champion has 5.1 Billion tonnes of NI43-101 compliant iron ore resources at Fermont, with Global Mineral Resource of 3.567 Billion tonnes on the CFLN project and heading to feasibility.
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Figure 3. Location map for CHM.TO's flagship. FNC.V has a 1.5% NSR and also owns shares of Champion.
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Fancamp holds royalties on several properties Champion owns with the Consolidated Fire Lake North property, located within its Fermont Holdings in Quebec, being the most advanced and presenting incredible latent income potential for Fancamp.
Champion is optimistic regarding its prospects, click on corporate fact sheet thumbnail below for details from source:
Click to access fact sheet on Champion Iron Mines Ltd. [PDF]
(Archived copy of fact sheet available here, if above link becomes obsolete)
Champion has delineated 5.1 Billion tonnes of NI43-101 compliant iron ore resources in total at the Fermont Holdings.
Champion has a preliminary feasibility study on its Consolidated Fire Lake North (CFLN) project section of Fermont. FNC.V owns a 1.5% net smelter royalty (NSR) on the Fermont Iron Holdings.
Champion has recently entered into agreement with Mamba Minerals to create a new iron ore company to be named "Champion Iron Limited". It is believed this new entity will be positioned to see projects through to fruition. An upcoming CFLN Feasibility Study will evaluate the potential to produce 20 Mtpa of iron concentrate, and according to Champion that is more than sufficient volume to economically support an independent railway. Champion has also increased and upgraded the project's Global Mineral Resource to 3.567 billion tonnes on the CFLN project compared to the PEA; using a 15% FeT cut-off grade it sits at 746 Mt at 31.1% FeT Measured & Indicated and 2,821 Mt at 28.8% FeT Inferred. In short, it is conceivable we may see CFLN producing within 5 years, assuming the upcoming feasibility and related decisions unfold as many expects it to.
Eventual royalty payments due to FNC.V on Champions' CFLN -- near-term production scenario:
FNC.V's 1.5% NSR on Champion's CFLN project will translate to large royalty payments; Mining MarketWatch Journal guesstimates that at 10 Mtpa it might translate to somewhere in the neighborhood of ~$6.5 million to FNC.V every year. The upcoming Feasibility Study is considering the potential at 20 Mtpa.
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2) FNC.V owns 6 million shares (representing 4.5%) of Argex Titanium Inc. + FNC.V owns NSR
(RGX.TO -- trading at ~$0.69/share as of Feb 14, 2014).
Argex titanium extractive technology
Argex has a patented and proprietary titanium extractive technology it plans to take to industrial production, it is the only TiO2 process that can effectively extract TiO2 from ores containing different contaminates such as MgO, V, Cr, etc. The proprietary metallurgical process is expected to allow Argex to become one of the lowest cost titanium producers in the world. Argex currently scaling up its process to pilot plant from bench-scale, and is doing so inside a massive new facility being built to accommodate industrial size application of the process.
Property
Argex has a couple of properties that originated from FNC.V, including the La Blache Fe-Ti-V property in Quebec where the current combined initial NI 43-101 compliant mineral resource estimate totals 30.88 Mt grading 18.78% TiO2, 63.29% Fe2O3 and 0.45% V2O5 in the measured and indicated categories with an additional 2.87 Mt grading 18.67% TiO2, 63.06% Fe2O3 and 0.43% V2O5 in the inferred category:
Figure 3. (above) Resource at Argex's La Blache Property, Hervieux deposit - La Blache hosts a very-high grade titanium and vanadium deposit, few such deposits in the world, FNC.V owns a 2% NSR on La Blache, rising to 4% two years after production. FNC.V also owns shares of Argex.
Royalty on Argex's La Blache:
FNC.V owns a 2% NSR on Argex's La Blache, rising to 4% two years after production. This 2014 FNC.V is entitled to, and expected to receive, $100,000 in advanced royalty payments from RGX in 2014.
Note: FNC.V had 9 million shares of RGX, and sold 3 million of its position last year for $2.1 million.
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3) FNC.V owns 43 million shares (representing 59.4%) of Lamelee Iron Ore Ltd. + FNC.V owns royalty
(LIR.V -- trading at ~$0.14/share as of Feb 14, 2014)
Lamelee Iron Ore Ltd. is formerly Gimus Resources, which was the subject of recent a reverse takeover performed by FNC.V to advance its Lamelee South iron Property, Quebec.
Lamelee South Iron Property in Quebec
In Q2-2013 FNC.V released an initial resource estimate on Lamelee South revealing Inferred Resources of 520Mt @ 39.5% Fe2O3 (27.6% FeT).
Royalty on Lamelee:
FNC.V has retained a royalty of 1.5% of the net sales price of minerals extracted from the Lamelee Iron Property.
Figure 4. (above) Location map (inset) and Lac Lamelee Ridge, containing the deposit at Lamalee -- The Project sits 10 km west/southwest of Champion’s Consolidated Fire Lake North project (SEE FLAGSHIP 1 ABOVE), and sits about 11 kilometres NW of ArcelorMittal's producing Fire Lake Mine. The property is situated in northeastern Quebec near the border with Newfoundland and Labrador, approximately 50 km south of the city of Fermont (Quebec). The property hosts a 2.4 kilometre long magnetic and gravity anomaly ("Lac Lamêlée Ridge") that reflects a tightly folded recrystallized remnant of the Sokoman Iron Formation, typical of this portion of the Fermont Iron District, and characterized by quartz specularite, hematite/magnetite, and silicate iron formation.
The Lamelee South deposit is interesting from an economic point of view as it has a lot of iron formation squeezed into a relatively small area, a study indicates 100% of the Inferred Resources are in the pit shell (the area where the mining is expected to take place).
Figure 5. (above) - Sample drill core (inset) at Lamelee South, and select drill hole locations.
Resource estimate details for Lamelee South Iron Project:
Excerpts from May 2, 2013 news release
Fancamp’s Lac Lamêlée South Iron Project yields Inferred Mineral Resources of 520 million tonnes @ 39.5% Fe2O3 (or 27.6% FeT)
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At a 22% Fe2O3 cut-off grade, there are 520 million tonnes grading 39.5% Fe2O3 (or 27.6% FeT) in the Inferred Mineral Resources* category. The 22% Fe2O3 cut-off grade used is a natural cut-off grade since the drilling and the combined geological-resource modeling covered the target iron formation in its entirety.
The following table outlines incremental tonnages and Iron grades at various cut-off grades:
...The Whittle Open-Pit Shells Study resulted in outlining two shells: the first a smaller open-pit shell of 315 million tonnes at a grade of 41.2% Fe2O3 (28.8% FeT); the second a larger open-pit shell of 520 million tonnes at a grade of 39.5% Fe2O3 (27.6% FeT). A comparison of results demonstrates the amenability of the Inferred MRE to potential open pit mining with 100% of Inferred MRE reporting within a conceptual open-pit shell.
Mr. Jean Lafleur, M. Sc., P. Geo., President and CEO of Fancamp stated, “Fancamp has now reached the first milestone with these Iron resources. We have clearly confirmed the potential of the Lac Lamêlée South Iron Project, the proximity of Iron resources to surface infrastructure and the effectiveness in drilling mineral resources at an all-inclusive cost of $200 per meter drilled. The iron formation has been successfully drilled tested to a maximum depth of 600 meters and remains open to the northwest, revealing an additional potential to add Iron mineralization...
...click here for full copy from source
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Drill result - tables:
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Click to view summary of 2011
Lamêlée South drilling results.
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Click to view summary of 2012
Lamêlée South drilling results.
(Note: DDH LS-12-23 yielded 333 m @ 41.7% Fe2O3 (29.1% FeT)).
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Management & technical leadership at Lamelee Iron Ore Ltd., and plans:
The team tasked with advancing Lamelee are the same individuals that started up the Consolidated Thompson's iron ore operation at Bloom Lake, they advance that project to buy-out, and in the process they brought the stock of Consolidated Thompson up to where they sold it for $17 per share in 2011. The plan is to replicate that success at Lamelee Iron Ore Ltd. The immediate plan for Lamelee is to delineate the deposit further, conduct metallurgy, and conduct a PEA, which should lead toward Feasibility in 2014, with a target of production in 36-48 months.
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4) Koper Lake Project, Ring of Fire - Ontario -- FNC.V is vendor on earn-in deal + FNC.V owns royalty
Located adjacent Noront Resources Eagle's Nest Discovery (~400 metres to the southeast)
About adjacent Noront's Eagle's Nest Discovery
In August 2007, this remote area yielded one of the highest-grade discovery holes in Canadian history, heralding the discovery of the Eagle's Nest nickel, copper platinum and palladium deposit. Since that initial discovery, Noront has invested over $150 million in the area, defining a viable reserve at Eagle’s Nest, a significant chromite resource at Blackbird, additional nickel sulphide mineralization at Eagle Two and AT-12 and vanadium mineralization at Thunderbird. Theagship Eagle's Nest discovery is a magmatic massive sulphide deposit measuring 150 metres by 50 metres that Noront has traced from surface to a depth of 1,600 metres. The Proven and Probable mineral resource at Eagle's Nest is 11.131 billion Tonnes of 1.68% Nickel, 0.87% Copper, 0.89 g/T Platinum, 3.09 g/T Palladium, and 0.18 g/T Gold.
Ownership of the Koper Lake Project
FNC.V is the original claimholder of the Koper Lake Property and is vendor to Bold Ventures Inc. which has an earn-in option agreement for up to 100% working interest on the Koper Lake Project. If Bold fulfills all its requirements the deal will generate $16.5 million cash to FNC.V.
Synopsis of Bold's earn-in option details:
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+50% - paying $C 1.5M to FNC.V, $8M in exploration over 3 years
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+10% - delivering bankable feasibility, paying $700,000 to FNC.V
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+20% - paying $15M to FNC.V over 3 years (½ in cash, ½ in shares) +20% - issuing 2% to (up to) 4% Gross Metal Royalty
In January of 2013 Bold signed an amendment agreement in order to allow it to earn up to a 100% working interest in the Koper Lake Project. The Amendment Agreement amends the terms of the original Earn-In Option Agreement (announced in May 2012) to provide that once Bold has earned its 60% interest in the Koper Lake Project, it will then have two options for a period of 90 days following the date it earns its 60% interest. First, it can earn a further 20% interest in the Property by paying Fancamp $15,000,000 payable in equal installments over three years with half of the amount payable in cash and the balance payable, at Bold’s option, through the issuance of common shares of Bold at the market price at the time the shares are issued with Fancamp retaining a carried interest in the Koper Lake Project. If the first option is exercised, Bold would then have the additional option to acquire from Fancamp the Carried Interest in exchange for a Gross Metal Royalty (GMR) payable to Fancamp resulting in Bold holding a 100% interest in the Koper Lake Project. Fancamp would then be entitled to be paid 2% of the total revenue from the sale of all metals and mineral products from the Property from the commencement of Commercial Production. Once all of the capital costs to bring the Koper Lake Project to the production stage have been repaid entirely, the GMR may be scaled up to a maximum of 4% of the total revenue from the sale of all metals and mineral products from the Property depending upon the price of product sold from the Property.
Royalty on Koper Lake Property:
As mentioned in 'Ownership' section above -- in short, FNC.V is entitled to a 2% a Gross Metal Royalty (GMR) (scalable up to 4% under certain conditions) of total revenue from the sale of all metals and mineral products.
Money due to FNV.V: FNC.V is owed $500K this year from Bold and will have a remaining ~$15 million due as the deal progresses.
The Koper Lake Property contains a known occurrence of massive chromite called the Black Horse occurrence
Figure 6. (above) - Koper Lake Drill Plan; sourced from KWG Resources' website
Current resource on Koper Lake Property
The Inferred Mineral Resources sits at 46.5 million tonnes grading 38.8% dichromium trioxide at 20% cut-off.
Metallurgy
On-going metallurgical work shows chromite amenable to reduction into metalized chrome and iron using natural gas.
Figure 7. (above) - A drill crew prepares to unload unto drill parts from a Basler BT-67 airplane at Koper Lake
Plans
Bold and its partner KWG Resources are advancing the project having announced (January 6, 2014) plans to spend $2M to drill down-dip extension of the resources.
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5) FNC.V has a 47% ownership interest in its subsidiary Magpie Mines Inc.
FNC.V is advancing Magpie toward spin-off/IPO or sale
Ownership of Magpie Mines Inc.
Magpie Mines Inc. is a private company right now, another 47% is owned by the The Sheridan Platinum Group Ltd which participated in its staking, and 6% is owned by Marquest. FNC.V's objective is to spinout the entity in the next 12 months, obtaining cash, shares, and royalties as per its business model.
Details of the Magpie project, Quebec
Location & infrastructure
The Magpie Deposit is located on Quebec's North Shore, east of Sept Iles, about 130 kilometres north of tidewater. There is a network of roads leading right up to the Magpie Property, the main road is ~10 km of the deposit area, and less than 5 km from secondary roads. There are power lines in the region and Hydro Quebec is the main driver of infrastructure in the region, building a new facility that will improve economics of the area substantially.
The Magpie Iron-Titanium-Chromium-Vanadium deposit
Magpie Mines Inc. is advancing a the Magpie Iron-Titanium-Chromium-Vanadium deposit in Quebec, considered to be among the world's largest undeveloped titaniferous magnetite deposits. The titaniferous magnetite of the deposit has been described as massive and homogeneous and carries small, but significant chromium and vanadium values.
Figure 8. (above) Image of Magpie deposit area in background - Note the excellent relief of the deposit (a mountain rising from the ground, it has ~250 meters of vertical relief), and appears ideal for an open-pit scenario.
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Click to access Technical Report and Resource Estimate on the Magpie #2 Iron-Titanium Deposit
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Resource at Magpie: 928.4 Mt @ 42.3% Fe(T), 11.2% TiO2, 2.6% Cr2O3, 0.3% V2O5
The NI 43-101 Mineral Resource released in 2012 sits at 928.4 Mt @ 42.3% Fe(T), 11.2% TiO2, 2.6% Cr2O3, 0.3% V2O5. Resource growth potential appears readily achievable as the current compliant resource is only on one section of a larger historically-known deposit.
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Geological interpretation of the project
The currrent geological interpretation of the Magpie deposit is primarily based on detailed mapping and sampling done in the 1960s by Stratmat Ltd. The deposit consists of four individual segments of masssive to semi-massive titaniferous magnetite numbered Deposit 1 through 4 going from North to South. The general trend of the titaniferous magnetite body is North-South with a sub-vertical west dipping contact to the west and a shallower west dipping (45°-50°) contact to the east. The body is hosted within granitic gneisses with the hanging wall and the footwall contacts being relatively sharp. The massive body is strongly homogeneous with only a small presence of locally interlayered anorthosite and cross cutting diabase dykes. We are probably looking at the root zone of a major layered anorthosite/gabbro complex now disappeared through erosion. Possible depth extensions remain to be tested.
The drilling performed to date by FNC.V has shown that the structural geology interpretations underpinning the historical tonnage estimates (non NI 43-101: 1.1 B Tons @43% Fe and 11%TiO2) are largely correct.
Figure 9. (above) Location map, claim map, and the deposits of Magpie - To date FNC.V only has a NI 43-101 compliant resource on deposit #2, the other deposits show are historic (non NI 43-101). The historical non NI 43-101 compliant resource estimate totals 1.1 B Tons @43% Fe and 11%TiO2 and still open at depth. The Magpie Deposit is located on Quebec's North Shore, east of Sept Iles, about 130 kilometres north of tidewater. The titaniferous magnetite of the deposit has been described as massive and homogeneous and carries small, but significant chromium and vanadium values.
Figure 10. (above) Drill section location map - In 2011 a major drill programme was conducted; 31 holes totalling 8,124 metres over the 11,500 foot strike length of Deposit No. 2.
Potential partnership development regarding Magpie Mines Inc.
Magpie Mines Inc. signs Memorandum of Understanding with Panzhihua Iron & Steel Group, a large-scale, state-owned enterprise specializing in vanadium-titanium-magnetite mining and smeltingagpie Mines Inc. signs MOU with China’s Pangang Group:
In Q4 2013 the Company signed a Memorandum of Understanding ("MOU") with the Pangang Group of China (A.K.A. Panzhihua Iron & Steel Group) which included the possibilities of technology exchanges with respect to Pangang’s smelting and beneficiation processes and their possible applications for the Magpie deposit. See related news December 5, 2014 release entitled 'Fancamp subsidiary Magpie Mines Inc. signs MOU with China’s Pangang Group'.
Metallurgy
Metallurgical work performed in 2013 by a scientific group from China, interested in perusing the Magpie deposit, has dramatically upgraded the economics of the project; Metallurgical test work from SGS Lakefield and Sichuan Non-Ferrous Metallurgical Institute of China has yielded a TiO2-grade to ~98%, and meets the specifications for marketable synthetic rutile products. In addition, a three-stage grinding/magnetic separation produced acceptable results for Fe-concentrate with a grade of 55% Fe and recovery rate of 89.5%. Further metallurgical test work will be performed by the group in China (and by the company) on Vanadium and Chrome in the pig iron, as well as improvement on the aforementioned TiO2 beneficiation test results.
Plans
The plan at Magpie would be to wait to see what metallurgical test work being performed by the group in China materializes, and then assuming positive results, spin-out the Company and do work on the other three deposits (#1, #3, and #4) adding those to the 928.4 Mt @ 42.3% Fe(T), 11.2% TiO2, 2.6% Cr2O3, 0.3% V2O5 resource numbers already established on #2. Alternately, FNC.V could perform the work necessary to bring deposits #1, #2, and #4 into the resource on its own prior to spin-off as the capex would likely be nominal in the scheme of things (possibly ~$2 million).
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6) FNC.V owns NSR on Uracan Resources Ltd.'s Turgeon Lake Uranium Deposit
The deposit also goes by the name 'North Shore Project' in Quebec.
Royalty on Uracan's Turgeon Lake Uranium Deposit:
FNC.V's owns a1.5% NSR for the first two years of commercial production, increasing to 2.5% thereafter.
Uranium project
LAKE TURGEON INTRUSIVE COMPLEX -- Double S Zone, Quebec
The North Shore Property consists of 15 non-contiguous claim blocks covering over 1,000 km2 located in the Havre St. Pierre, Aguanish and Natashquan corridor along the North Shore of the Gulf of St. Lawrence. Reconnaissance drilling outside of the known main zone at Double S in the 2008 winter program confirmed a number of new separate zones of mineralization, ranging from 1300 - 2900 meters NW of the main Double S Zone. These areas within the trend are known as the Middle Zone and TJ Zone.
Resource at Turgeon Lake
NI 43-101 resource calculation: The Double S Zone contains an indicated resource of 21.5 million tonnes at an average grade of 0.014% U3O8 containing 3.11 million kilograms (6.86 million pounds) of U3O8 and an inferred resource of 59.96 million tonnes at an average grade of 0.012% U3O8 containing 7.41 million kilograms (16.33 million pounds) of U3O8 using a 0.010% cutoff.
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7) Desolation Lake Polymetallic Project, Ontario
FNC.V is advancing Desolation Lake toward spin-off/IPO or sale
(Current ownership: 80% Fancamp, 20% The Sheridan Platinum Group)
Located NW of Attawapiskat in the James Bay Lowlands some 215 km NE of the Noront discovery in the Ring of Fire.
The property was staked to cover a large kilometre scale magnetic anomaly covered by an estimated of 300-400 metres of Paleozoic limestone and is situated at the intersection of regional structural lineaments. Recent geophysical modelling of the Airborne VTEM suggests the presence of massive sulphides immediately beneath the limestone cover, and a prime target for nickel bearing sulphides.
The project hosts a 15 km magnetic trend located in James Bay Lowlands and has potential of substantial mineralization. Recent drilling has yielded impressive numbers, including 422 m @ 28.6% Fe(T) or 40.9% Fe2O3. FNC.V has plans to perform further exploration to delineate the size of the mineralized system and produce a NI mineral resources on Iron, Limestone. FNC.V's objective is to spinout the entity, obtaining cash, shares, and royalties as per its business model.
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