Inventus Mining (OTC:GNGXF) is an undervalued junior gold explorer

Inventus Mining (OTC:GNGXF) is a junior that is based out of Sudbury ON, a well established mining and services district with the largest Ni-Cu deposit in the world (have you seen how Vale has been doing recently? They own most of Sudbury, alongside Glencore and a few other top-tier miners). Inventus has two main project areas, the Pardo gold project and the new Sudbury 2.0 project.

The company is notoriously stingy with it’s money, contracting out COO, and forgoing many VP appointments that drain junior of exploration capital through management expenses. Regardless, the CEO, Stefan Spears, is also a VP at McEwan Mining, meaning that money looks to be easily accessible when needed, as is evident by significant purchases by Rob McEwan in past placements. The company also follows a least cost exploration model, completing basic fieldwork before commissioning more expensive geophysical and drilling methods.

Inventus’ stock has been stagnant all summer, dropping from a high of 20c in the winter, down to a low of 8c at the market crash, and averaging 14c all summer. However, in the last few weeks, it has steadily risen on above average (2x) daily volume, nearly doubling up to 22c. CEO Stefan Spears has consistently been buying into the company, most recently this month.

The big players don’t seem to be selling either. Inventus just released a press statement saying they have started their winter drill program at Wolf Lake drilling newly acquired high grade gold targets and some big purchase volumes have been going through with limited selling. I expected a private placement early in the new year prior to drilling, however as of September 30th (towards the end of the field exploration expenditure window) they were still sitting on a quarter of a million that it looks like they have used to commence drilling.

I wouldn’t be surprised if we see the stock price double again in the next month or so, especially if they put out drill results before a private placement announcement, if they even put out a placement announcement (lots of warrants outstanding). Long term, I could see them using the momentum created by the Sudbury 2.0 project to fund further bulk sampling at Pardo as well – if this is the case, alongside the price of gold and the hype around copper, nickel and cobalt in batteries (hello Elon) I think a $0.5-1.0 price target is achievable in the next year or so.

The Pardo project

Inventus has worked at the Pardo project for nearly a century now, first in a JV and now as sole owners. Inventus has held this property since the early 2010’s, when gold tanked from 1600 to 1000-1200 up until last year. In short, the Pardo property is a shallow dipping 1-4m thick reef of high grade gold conglomerate that has been extended over 10km N-S by 3km E-W. What’s interesting about this conglomerate is not only it’s extent, but it’s grade: 36.5 g/t gold over 31 metres, 4.2 g/t gold over 92.5 metres, 5.2 g/t gold over 140 metres at multiple showings over a 1km by 1km area – these are channel samples at surface.

In 2017-2018 they completed a 1000t bulk sample at the property in an area with a drilled grade of 1.34g/t (5m spacings); bulk sampling returned an average grade of 4.2 g/t Au, over 2x the drilled grade, suggesting that this deposit has a nuggety effect and that the limited drilling so-far completed throughout the property used to calculate an inferred resource of 1.4Moz Au (average 3.4g/t from drilling) is significantly underestimating the gold potential at the property.

Furthermore, this estimate only accounts for surface targets – mineralization continuing in all directions (at shallow depths) has yet to be defined, although drilling suggests anomalous to multi-gram gold grades throughout.

For comparison, Great Bear Resources (in Red Lake, another well established mining camp) has put out similar grades at depth (4.7g/t Au over 100m, 5.2g/t Au over 40m at 130-200m depth) and their stock has gone from $.4 in 2018 to current $17.7 (~45x return over 2 years). However, the same grades at Pardo occur in a well defined layer at surface, significantly reducing the cost to plan, mine and process material at the site.

Inventus says it has plans to complete additional bulk samples at new zones to refine their resource model, and seems to have definitive plans to resume work at the property with the upward gold potential we have seen recently.

Just like Great Bear, the Pardo property is in an established polymetallic metal district (Alamos Gold, the Emerald Gold Mine, Temagami Copper mine) and is easily accessible year round on public roads. Even at a low estimated drill grade of 2g/t Au, mining the deposit would likely be profitable given it’s location, size, surficial nature and the increasing gold price.

The Sudbury 2.0 project

Inventus staked much of the Sudbury 2.0 Property in 2018, covering much of the area above the poorly understood Temagami anomaly that extends all the way from Sudbury to Cobalt. They have been mapping it recently, and have discovered new Sudbury-related rocks known to host much of the Sudbury Ni-Cu-PGE mineralization in the Sudbury Camp. However, they had yet to find mineralization related to Sudbury, other than high grade PGE-Cu-Au at the Rathbun showing (>30g/t Pd+Pd+Au combined, >12%Cu).

However, the area also hosts multiple poorly explored polymetallic Au-Cu-Co-Ni occurrences that Inventus has recently acquired from the defunct Flag Resources. Of these two, I find the Wolf Lake and Cobalt Hill Properties to be the most interesting. Flag Resources explored both properties over 30+ years, but appears to have been poorly managed and limited in their knowledge of mineral exploration. Regardless, drilling at Wolf Lake returned numerous high grade Au intercepts up to 16.5g/t Au over 22m, >2% Cu over 22m and 16m, and VG up to 687g/t Au with the deposit open at depth and along strike. Similarly, Cobalt Hill, about 1.2km south of Wolf Lake, returned multiple 40+m intervals of >2g/t Au at shallow depths, with high grade zones up to ~30g/t Au over 1.8m. Furthermore, sampling intervals seem to have been quite large, likely underestimating gold grade in many holes.

Finally, Flag failed to assay for Cu Co, Ni and PGE’s at both properties, but they did find significant (0.3-0.5%) Ni and Co suggesting that Cobalt Hill may also contain significant amounts of polymetallic mineralization in addition to the Cu at Wolf Lake. Recent mapping by the company suggests that Wolf Lake and Cobalt Hill are connected along a larger alteration structure, which doesn’t seem to have been tested by past drilling. I believe this area has huge potential for the next gold deposit and Inventus must as well, as they just started drilling. Co and Ni are important in the rapidly expanding battery market, as is Cu alongside disinfectants uses- this hype, along with the current price of gold, could bode really well for the company if they hit a few decent grades this winter, and I could see a much larger drill program in the works in the near future.

Tim Rolle
Tim Rolle

Investor of 6 years and Managing Editor of Money Midnight, a news outlet focused on highly profitable investment ideas and bold underground research.

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