Analysis Heritage Mining

Why I like this project

An early exploration company with 3 projects that are partially drilled (historically and by Heritage itself in 2023) and that all lie within promising areas, surrounded by prominent investors. Goal in the flagship project Drayton Black Lake, henceforth DBL) is to connect dots along a line of mineral occurences. This ‘dot-connection’ is based on the analysis of historic data, last-years drilling, plus a number of surface- and geophysical test that were also conducted last year. With a very low market caps of under CAD 5,0 mio (July 2024), a strong management team, and opportunities for early results in all three projects I see this as somewhat speculative but nevertheless attractive near-term opportunity for upside development.  

I also like the broader mineral exposure, covering gold in Drayton Black Lake, copper-gold in  Contact Bay and gold, copper, nickel and PGE (platinum group elements) in their recently acquired Scattergood project. Specifically the copper and gold exposure may be useful in these days, as both metals see relatively strong market interest.

Company & Project Overview:

Lets look first at Heritage’s flagship DBL project. This is located in a greenstone belt gold with the potential for so-called orogenic gold deposits. This type of deposits are among the top producing deposits in the world.

Located in the in the Dryden-Sioux Lookout area of northwestern Ontario, the setup is somewhat reminiscent of Emperor Metal’s situation, in that we deal here with a worldclass district (the Abrams-Minnitaki Greenstone goldbelt in Ontario), with a number of Majors as well as exploration active in the immediate neighbourhood. Frank Giustra, a highly-respected Canadian top-investor invested next door with Treasury. But Rob McEwen and Eric Sprott, equally iconic investor figures in the Canadian mining scene, are there as well,  with engagements in nearby Dryden and Dynasty Gold Corp. To be clear, these investments honour the location, and not Heritage directly, but as always, specifically with early exploration projects like this one, it is good to know that the gold belt it is operating in is indeed attractive.   

All projects are located in a greenstone belts, and indeed an Archean greenstone belt, which host 75% of the Canadas gold resources, so we are in fertile grounds. But it is also a historic ground, and Heritage is making full use. In the area covering the various claims the company holds, there is exploration data almost covering the last 90 years, including over 176 holes drilled, even though they stem from the 1930s. However, the amount of historical data (roughly 1930s to 1980s, depending on the specific target) is quite huge.  And having a lot of data can be an asset, or a burden. But in the case of Heritage, I see the team competent at delivering action here, as they analyzed a heap of data. The company way quite active with organizing, funding and delivering airborne geophysical surveys and broader field programmes for the project over the last 1,5 years. This provides me with some confidence that the upcoming, and more complex drilling programme will equally be well managed. Last year, Heritage undertook its own drill campaign. The company now has enough data to embark on a drill campaign this summer.

• Management: Peter Schloo, the CEO is as well as certified propspector as a certified accountant. Understanding the geology plus the financial aspects is a very good asset in the Junior Mining space. In practical terms, he also led a very successful marketing campaign by way of road shows in Europe and Canada. That tour alone resulted in a 50% raise of the stock price between mid-June and mid-July. Marketing by itself is nothing, but marketing plus a good project plus a good team is a lot. Heritage does have that team:
• Besides the management board, Heritage has also acquired the services of two key advisors, Dr. Brett Davis and Paul Warren, who are known for their expertise in structural geology and mining exploration. Structure is an important aspect for orogenic gold deposits, as one needs to scope those structures that hide the gold-bearing veins.

As a nice side-aspect the Company received CAD 200,000 in full from the Ontario Junior Exploration Program (OJEP) grant from the Ontario Ministry of Mines to support early exploration projects

So, what is happening at the project precisely?

DBL is just over 15,000 Ha in size, and features gold, gold-silver as well as copper-gold mineralization. The big plus is the fact that drilling is ahead immediately, and 10 targets will be drilled in the summer-2024 programme. All targets tend to be near-surface (100m max), keeping costs down. There is sufficient budget in the coffers to undertake the drill programme this year.

Lets look at the project a bit more detailed, so that it comes out why there is potential – and where:

As written above, drilling is ahead, targeted at new and existing targets plus in between grass roots exploration to connect the dots. The focus will be on Zone 3. To avoid confusion, lets take a step back:

So Heritage has three properties or projects, called Dryden-Black Lake, Contact Bay and Scattergood (see picture above). But all these projects are fairly large in size, specifically DBL. Due to the long history of the project, it is also not very homogenous but features different structures – which are all different opportunities. This becomes visible below: The names on the map are ‘target areas’ (Moretti, Rosnell, New Millenium etc). Some of these target areas are further divided into target zones.

Hence we have

Drayton Black Lake (1 of three projects of Heritage) -> Alkenore Buffallo (one of eight target areas) -> and then we have Zone 3 as part of the target area.