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October 19, 2023
October 30, 2024

Investment Thesis

Original Investment thesis in a nutshell – I believe ESGold will be put into production and will become a significantly low-cost cash cow mining company which will likely attain a market cap of a billion dollars (Canadian) in a metals bull market if it successful executes it business strategy!

My Opinion

The company has motivated, dedicated and focused management that are diligently executing the business strategy and have a great vision that I believe is realistically possible.

With a market cap of only about C$3.5million (as of 03 July, 2024), this near-term gold/silver producer is ridiculously undervalued and is an undiscovered hidden gem that has the potential to render life changing returns to patient shareholders if management successfully executes its business plan.

About ESGold

Ticker symbols – CSE (Canada): ESAU, OTC (USA): SEKZF, & FSE (Germany): N4UP

“Esgold is a Canadian environmentally aware resource exploration and processing company. Management has demonstrated expertise in advancing gold exploration projects into acquisition targets, most notably in the province of Quebec. Esgold’s principal restoration and recovery project is the Montauban property situated in Quebec, just 80 kilometres west of Quebec City.” – Take from a recent company news release

ESGold Overview

The Montaubaun property is an abandoned historical mining project in Quebec, Canada. During the historical production, the zinc-lead-gold-silver mine produced ~3.2 million tonnes.

ESGold owns 100% of the project and it’s land package claim is the largest in the region consisting of 13,116 hectares.

The project has 6 historic talilings which will be processed once the mill is operational. Using the amount of recoverable metal from the processing of the 5 tailings sites in the Preliminary Economic Report (2023), the potential revenue from the processing of these tailings is estimated to be ~C$83.7 million (~US$61.1 million) using recent metal prices in June, 2024.

The property also has historical resources (non-NI 43-101 compliant) that contain ~1.1 million tonnes. Using an estimated amount of recoverable metal, the potential revenue from the processing of the historical resources could be ~C$427.1 million (~US$311.8 million).

The property also has “blue-sky” potential for discoveries of new deposits and expanding the size of the historical deposit.

Below is a quick video I created to give an overview of the Montauban project.

Blue-Sky" Potential
New Potential Deposits

VMS deposits often occur in clusters so when one is found there could potentially be more of them in the region.

The largest VMS mining camp in Canada is the Bathhurst Mining Camp. It contains over 46 deposits (25 over 1 million tonnes) as well as Canada’s largest VMS deposit (~230 million tonnes).

According to the government of Quebec’s SIGEOM database which contains the geoscientific data from the last 150 years, most of ESGold’s massive land claim package has never been explored.

Since VMS deposits often occur in clusters and most of ESGold’s claims have not been explored, there’s “blue-sky” potential for the discovery of other VMS deposits.

Blue-Sky" Potential
New Potential Zones & Extensions

VMS deposits can be extremely large (largest one in the world is ~1.54 billion tonnes). The historical Montauban deposit totaled ~4.4 million tonnes (historical production & remaining historical resources).

Since the total size of the historical deposit is only a fraction of the world average size of a VMS deposit (~17 million tonnes) as well as a fraction of the average size of a felsic-siliciclastic VMS deposit in Canada, there’s a potential that only a small portion of the deposit was discovered (according to my extensive research as well as the opinion of one of the company’s geologists, the Montauban’s lithological VMS classification most resembles a felsic-siliciclastic VMS deposit).

The world’s largest VMS deposit in the world and the Bathurst Mining Camp are also said to be felsic-siliciclastic VMS deposits.

In 2015, a VTEM identified 22 geophysical anomaly drill targets. One of the recommendations from the recent Technical Report (2023) is to drill the known geophysical targets as many of the conductive zone anomalies have not been tested.

In addition, VMS deposits can extend to great depths. The LaRonde mine (~482 km or ~298 miles from the historic Montauban deposit) is operating below a depth of 3,000m!

According to findings discussed in recent technical reports on the Montauban deposit, there are indications that vertical extensions of the deposit may exist in specific areas that were not drilled.

Since the Montauban was not drilled deep and there are indications that vertical extensions may exist, there’s “blue-sky” potential due to the possibility that new zones and extensions are discovered.

Below is a video I created to show some of the “blue-sky” potential.

Montauban Mill (Processing Plant)

The building has been built and most of the equipment has be acquired.

Once production financing is secured, the Montauban mill could be in production as quickly as 6 months.

The mill will have a capacity of 1,000/tonnes per day (it can potentially be expanded to 2,000/tonnes per day.

The largest tailings site is conveniently located immediately next to the location of the processing plant.

Fully Permitted for Production

The Montauban Gold Project is fully permitted for the processing of tailings so once the mill is operational, the revenue stream will begin.

In order to process the historical resources or any new hard rock mineralization, the only thing required is the approval of an addendum to the current Certification of Authorization. In the province of Quebec, addendums are typically said to be “almost’ guaranteed unless a company has really messed up.

The Strategic Asset - Domino Effect

It took 8 years to get the Montauban fully permitted for production after its acquisition. It required a lot of negotiation and most importantly, it required the right contacts with the province of Quebec.

Although there are hundreds of abandoned historical mining projects in the province of Quebec which the government doesn’t know what to do with, the government is extremely selective in who they give abandoned projects to.

Once ESGold successfully puts the Montauban into production, the door is wide open to negotiate with the government of Quebec for more low-capex lucrative projects. It is said that there are many abandoned projects similar to and even better than the Montauban project waiting to be put into production.

Once the Montauban Mill is in production it will be able to process the following:

Tailings at the Montauban as per the PEA
Known near-surface historical resource
Any remaining new ore identified with drilling (Montauban)
Other tailings from other near-by projects (tailings can be transported by truck or rail)
Once there is nothing left to process & due to the low operating cost of the mill, it can be used to process other company’s ore which would still generate substantial revenue
New fully permitted project – mill equipment could be moved to a new fully permitted project

Preliminary Economic Assessment

A Preliminary Economic Report (PEA) on the Monauban was recently released in March 2023.

To view the PEA: PEA (March 2023)

Polymer Construction Material

From the company’s website –

“ESGold’s intention is to transform the tailings at Montauban into building materials such as bricks, cinder blocks, paving stones, patio tiles with the use of a proprietary organic Polymer that will bond the neutralized processed tailings.

ESGold’s joint venture agreement with DMCMS Inc. to produce and sell construction building materials from the neutralized tailings could generate substantial and important revenues for the company over the course of many years. Additionally, this final step process will enable the Company to complete the full cycle of environmental responsibility (ESG) at its Montauban Project and position ESGold eligible for offset carbon credits.”

To view pictures of the Polymer Project: Polymer Project

Multiple Potential Revenue Streams

ESGold has the potential to generate revenue from multiple sources such as:

Sale of gold & silver dore bars from the Montauban
Polymer construction materials using the processed tailings
Carbon credits due to the ESG potential of the polymer construction materials (this is an emerging market)
Mica- the mica can be sold and has a market for it. Mica is also used for EV car batteries. The CEO said he was looking into this market to see if the company can generate more revenue from the mica instead of selling it as an unfinished product
Additional mining projects in production

Pending & Potential Catalysts Tracker

To view the current list of catalysts: ESGold Catalysts Tracker

Article - An Undiscovered $3.5M Mining Gem With District Scale Exploration & "Blue Sky" Mining Potential

On 02 July, 2024, I released an article that extensively analysed and calculated the “blue-sky” potential of ESGold’s massive land claim package in the Historical Montauban mining region. Also, in the article are calculations of the potential stock price using what I believe is the worst case scenario. If the assumptions used in the worst case scenario are correct, there’s potentially a lot of upside potential from current prices in early July, 2024.

ESGold – An Undiscovered $3.5M Mining Gem With District Scale Exploration &”Blue Sky” Mining Potential

Initial In-Depth Research Reports

Although these reports were released when T$R initiated coverage of ESGold, they remain relevant and are crucial to fully understand my investment thesis on it.

In order to fully understand the follow-on articles (found in the articles section), I highly recommend one reads these reports first.

Link to all the follow-on articles: Articles

ESGold 25 Jan 2022

ESGold 21 Aug 2022

Research Material

The following links are directly related to the company:

Company Website
Company News
Company Corporate Presentation (April 2023)
Company Telegram Chat (not affiliated & not moderated by The Shareholder Report)
CSE Listing
OTC INFO
Company Twitter
Old DNA PM Profile
Previous Agreement (Gespeg Copper & Osisko Mining)
Montauban Purchase Agreement Contract
NI 43-101 2022
NI 43-101 2019
NI 43-101 2019 NR
NI 43-101 2014
Historical Data NR
2018 Tailings Drill Results
Muscocho Explrations 1982 Report
PEA Report (March 2023)

Articles

Résidus miniers et construction de routes: d’une pierre deux coups (French)

Podcasts

The following links are indirectly related to the company:

GOLD AISC Q2’21

Warrants & Options

My biggest criticism of the company is the fact that it was a dilution machine under the previous CEO. I have been reassured by new management that they are going to minimize dilution going forward. Once the Montauban is put into production, it will be able to self-finance itself without having to rely of share financings.

See the following link to view the current list of warrants & options: ESGold Tracker

Videos of Interest

Ensure to view the important DNA Precious Metals (previous owner of the project) videos lower in the list.

DNA Precious Metals Videos

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Company Disclosures

Doubleview Gold

My spouse & I are both shareholders so I’m biased. T$R independently initiated coverage of Doubleview Gold on 14 June, 2020.

Compensation/Sponsorship – Nothing to declare

Promotional Items Received – July 2020 – My spouse (not associated with T$R) and I each received 1 baseball hat from Doubleview Gold. The company publicly announced any shareholder could receive a company hat for free and it was available to any shareholder upon request.

ESGold

My spouse & I are both shareholders so I’m biased. T$R independently initiated coverage of ESGold on 01 February, 2022.

Compensation/Sponsorship:
August, 2024 – After the release of the report on ESGold on 02 July, 2024, the company (ESGold) offered to compensate T$R for the article & consequently, T$R featured it as a sponsor from 01 – 31 August, 2024. On 23 August, 2024, T$R received the compensation of 250,000 shares of ESGold from Computershare (DRS). The shares are subject to a 4 month holding period. T$R intends to hold the shares for investment purposes. Due to T$R’s extensive coverage of ESGold, there’s a possibility that ESGold pays T$R for the creation of certain content in the future.

October, 2024 – On 29 October, 2024, T$R’s founder (D4), received C$19,000 & 190,000 warrants (exercisable at C$0.15 & expire in 1 year) as finder’s fees on the financing that closed on 30 September, 2024.

Financings – July 2022 – I participated in a financing but the warrants expired without being exercised.

Promotional Items Received – July 2022- I received a free hat from ESGold. ESGold was giving away free hats and T-shirts to people that wanted them (I didn’t receive a T-shirt as they had already given them all out).

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