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, OTCQB (USA): SEKZF, & FSE (Germany): N4UP
“Esgold is a fully permitted, preproduction resource company at the forefront of clean mining and exploration innovation. With proven expertise in Quebec, the company is advancing its projects toward production and feasibility while delivering long-term value through sustainable resource recovery and exploration. Esgold’s flagship Montauban property, located 80 kilometres west of Quebec City, serves as a model for responsible mining practices, combining near-term production with exploration potential.” – 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.
The property also has historical resources (non-NI 43-101 compliant) that contain ~1.1 million tonnes.
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.
Historical Tailings
Surface & Underground
In addition to the six historical tailings at surface, there are more historical tailings below the surface. The 2023 Preliminary Economic Report (PEA) examined the five largest piles and found them to be highly profitable despite using much lower metal prices (US$1,750 per ounce gold, US$21 per ounce silver & US$200 per tonne mica).
Government documents estimate that the Montauban property contains more than 2 million tonnes of historical tailings (see image below). A 2009 report prepared for Quebec’s Ministry of Environment estimates it to be approximately 3 million metric tonnes.
During the course of historical underground mining at the Montauban, a substantial quantity of tailings was deposited in the excavated drifts (mine tunnels). Since the 2023 PEA deemed the historical surface tailings to be highly profitable, it is assumed that the subsurface tailings could also be similarly profitable.
Historical Stockpile
In 1990, Muscocho Exploration ceased operations at the mine and decommissioned it in early 1991 due to financial difficulties while it was in the process of putting two other projects into production, which became problematic and were eventually shut down. The Quebec government reportedly ordered the company to properly dispose of the processing mill’s stockpile.
To adhere to the Government of Quebec’s orders, Muscocho Exploration relocated the ready-to-process stockpile inside the mining ramp prior to cementing it shut as part of the mine’s closure. This information originates from an individual who directly conversed with the person responsible for relocating the material, as well as the mining operations manager at the time.
Given Muscocho Exploration’s financial challenges, why did it not process the remaining stockpile before production was halted? The low price of gold in the late 1980s, coupled with its constantly fluctuating value and the fluctuating head grade processed at the mill, resulted in profitability on certain days and losses on others.
Although the quantity of the historical stockpile that was relocated is unknown, a stockpile for such a mining operation generally consists of a 30-day supply.
Based on Muscocho’s last stated processing capability of 355 tonnes per day, a 30-day supply would amount to 10,650 tonnes.
If the information and the 30-day stockpile are correct, there could be an additional 1,113 ounces of gold and 25,735 ounces of silver available for future processing using the last reported grades it was processing in 1988.
“DV89-01 (1988): “The plant operated at a rate of 355 T/d on an annual basis of 339 days, processing a total of 120,051 tonnes of ore (1988: 119,173 T). The average grades at the mill entrance were 3.25 g/T Au and 75.16 g/T. The combined production of all the exploited areas reached 356,176 g of gold and 7,546,695 g of silver.” (Derosier, 2000) Source: GM 58886 hyperlink
"Near-Surface" Historical Resources
The property also has historical resources (non-NI 43-101 compliant) that contain ~1.1 million tonnes.
To learn more about how lucrative the “near-surface” historical resource is, please see the following report: ESGold: A Deep Dive into its Lucrative Historical Gold & Silver Resources
Potential Gross Revenue
Additional Potential for Resources
Identified Anomalies
In addition to the historical resources, there is a potential to increase the resources with the exploration of some of the gold-silver-zinc-lead anomalies that are located a few kilometres north and south of the near-surface historical resources (some range in depth between surface and 10 metres).
Historical grab samples in the north anomalies include 17.14% Zinc, 14.96% Zinc, 483 g/t silver and 1.92% lead. In the southern anomalies, historical drilling intercepted 2.8g/t gold and 19.1g/t silver.
"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.
To understand why the ANT survey might provide the golden map to unlock the “blue-sky” exploration potential of the Montauban, please refer to the following article:
ESGold: The ANT Survey & the “Golden” Treasure Map to Unlock the “Blue-Sky” Exploration Potential!
To better understand what the “blue-sky” exploration potential consists of at the Montauban, please refer to the following article:
ESGold: An Undiscovered $3.5M Mining Gem With District Scale Exploration & “Blue Sky” Mining Potential
"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.
Previously One of the Lowest-Cost
Gold Mines in Quebec
As a result of the Montauban’s mineralogy, Muscocho’s mining operation at the Montauban was among the lowest-cost gold mines in Quebec.
“The ore is indeed of a low hardness, containing very little quartz. In addition, the gold is in a free state and of a rather coarse grain. Finally, the presence of mica facilitates the filtration of the enriched solution. These properties of the ore, consisting mainly of anthophyllite, cordierite, sillimanite and quartz-biotite gneiss, are an important asset to consider in the gold evaluation of the Grenville. It should be noted that total production costs at Montauban remained at about $40 per tonne (or US$211 per ounce of gold), which is among the lowest gold mines in Quebec.” (Rapport des Représentants Régionaux, 1985) Source: DV 85-02 hyperlink
In a Northern Miner article titled “Investment Comment Lots of upside to Muscocho (27 April, 1987) – Michael Villeneau of the investment firm Morgan Grenfell said the following about Muscocho’s Montauban project: “access to the mine is via ramp and mining has been by the shrinkage stope method. Costs per tonne are exceptionally low, notes Mr Villeneau, and enables the deposit to be cash positive even with relatively low grade. Mill output is 385 tonnes per day with recoveries around 90% using cyanidation and zinc precipitation/” (Staff, N. M., 1987) Source: Northern Miner hyperlink
Given that the Montauban was once among the most economical gold mines in the province of Quebec, which contains the second highest number of gold mines in Canada, it is anticipated that it would regain its status as one of the lowest-cost gold mines when processing the high-grade surface and near-surface hard-rock historical resources.
Financial Road to Production
Montauban Mill (Processing Plant)
The building has been built and ~60% of the equipment has be acquired.
Once production financing is secured, the Montauban mill could be in production as quickly as 6 months.
At full capacity, 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
Certificates of Authorizations
ESGold is fully permitted to process the historical surface tailings at the Montauban.
No new permits are necessary as long as ESGold maintains the mill’s current processing method and configuration. ESGold’s current Certificate of Authorization allows the mill to process gold, silver, and the by-product mica from the mining residues using a gravity separation circuit and a cyanidation circuit.
- Mine the surface & near-surface historical hard-rock resource of ~1.1 million tonnes.
- Mine any newly discovered gold and silver mineralization on its claims, totaling 13,116 hectares.
- Expand the building up to double its current size of 16,000 square feet.
- Increase production output from 1,000 tonnes/day to 2,000 tonnes/day (requires approval to extend the size of the building).
With a straightforward process for an addendum to one of its Certificates of Authorization, ESGold could do the following upon approval:
The Strategic Asset - Domino Effect
It takes ~8 years to get a project like the Montauban fully permitted for production after acquisition. The acquisition of the Montauban required a lot of negotiation and most importantly, it required the right contacts with the province of Quebec in order to acquire it.
There are ~300 government owned abandoned historical mining projects in the province of Quebec. Although these projects pose a liability and an environmental issue, the government is very selective about who can acquire them.
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 mining projects similar to and even better than the Montauban project waiting to be put into production.
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
Reports of Interest
A Deep Dive into its Lucrative Historical Gold & Silver Resources
This specific report was released on 16 March, 2025. The report was compensated by ESGold and was produced “independently” (refer to the disclosure for further details).
To read the full report:
ESGold: A Deep Dive into its Lucrative Historical Gold & Silver Resources
The ANT Survey & the "Golden" Treasure Map to Unlock the "Blue-Sky" Exploration Potential!
This specific report was released on 08 March, 2025. The report was compensated by ESGold and was produced “independently” (refer to the disclosure for further details).
To read the full report:
ESGold: The ANT Survey & the “Golden” Treasure Map to Unlock the “Blue-Sky” Exploration Potential!
Article - An Undiscovered $3.5M Mining Gem With District Scale Exploration & "Blue Sky" Mining Potential
On 02 July, 2024, I released an article that extensively analyzed and calculated the “blue-sky” potential of ESGold’s massive land claim package in the Historical Montauban mining region. Also, in the article are calculations of the potential stock price using what I believe is the worst case scenario. If the assumptions used in the worst case scenario are correct, there’s potentially a lot of upside potential from current prices in early July, 2024.
Despite the independent production of this particular report, T$R received compensation for it in August 2024, making it compensated content (refer to the disclosure for further details).
ESGold – An Undiscovered $3.5M Mining Gem With District Scale Exploration &”Blue Sky” Mining Potential
Potential Target Price Using A Senior Analyst's Target Price On The Montauban (2014)
On 06 March, 2014, Goldman Small Cap Research did an excellent detailed research report on DNA Precious Metals (a previous owner of the Montauban project). DNA Precious Metals’ only asset was the Montauban project.
DNA Precious Metals anticipated being in production in 6 – 9 months (similar to ESGold). It expected to obtain non-dilutive financing from the government of Quebec but it eventually didn’t materialize.
The Senior Analyst gave DNA Precious Metals a target price of US$1.20.
On 06 March, 2014, DNA Precious Metals had a market cap of ~US$34 million (~C$47.6 million).
At the price target of US$1.20, DNA Precious Metals’ market cap would have been ~US$115.3 million (~C$161.4 million).
Applying DNA Precious Metals’ valuation at its target price translates a target price of ~C$3.48 for ESGold (using the current outstanding shares of 46.4 million & assumes non-dilutive production financing is obtained – according to ESGold’s news releases the odds of this occurring are extremely high).
DNA Precious Metals Target Price
US$1.20
(~C$1.43)
-Outstanding shares = ~96.1M
-Mkt Cap at report’s release = ~US$34M (~C$47.6M)
-Mkt Cap at target price = ~US$115.3M (~C$161.4M)
ESGold’s Potential Target Price*
~C$3.48*
*Equivalent price using DNA Precious Metals’ valuation at its target price & applying it to ESGold using 46.4M shares (current as of 01 Dec 2024)
ESGold’s Current Price
(01 Dec 24)
~C$0.275
Although DNA Precious Metals’ target price was based on mining stocks about a decade ago, the price of gold and silver are currently significantly higher!
06 Mar 2014
Gold = US$1,258.50
Silver = US$21.11
01 Dec 2024
Gold = US$2,650.60
Silver = US$30.60
Main differences between DNA Precious Metals & ESGold – ESGold is better set up for success (owns significantly more land in the Montauban region, better economics due to significantly higher metal prices resulting in higher profits, potential revenue from the polymer construction material as well as potential revenue from the sale of carbon off-set credits, ESG movement, etc.).
The 2014 research report and target price for DNA Precious Metals provide valuable insights into how potentially undervalued ESGold currently is, as well as its potential upside once the market takes notice, especially after it secures production financing and will become a gold and silver producer!
2014 Research Report vs DEC 2024
2014 research report – “Given the total resource potential, including measured resources, inferred tailings and near surface resources, the economic potential is great, with an estimated $234M in gold, silver and mica.” (C$257.2M using the exchange rate at the time of the report’s release)
Dec 2024 – Using recent values of metals (gold US$2,700, silver US$31 & mica US$500/t), the tailings and the near surface historical resources now have an estimated US$452.6M (~C$633.7M as of 01 Dec 2024) in gold, silver and mica representing an increase of US$218.6M (~C$306M) since the 2014 research report!
Since both the processing cost in 2013 and the 2023 PEA estimate the processing cost per tonne to be $29, the confidence level of the potential profit per ounce calculation, based on the 2013 production cost per ounce and the increase in the price of gold, is considered to be high.
In addition, the recent news release on November 26, 2024, will likely reduce the processing cost, thereby increasing the potential profit per ounce.
Due to a very low cost of production, the increase in the price of metals since the 2014 research report, which amounts to an additional C$306 million, is likely gross profit. After applying a 30% tax rate, the increase in the price of metals represents an additional C$4.62 per share in cash (using current O/S of 46.4M).
Once added to ESGold’s potential target price based on the senior analyst’s target price of the Montauban in 2014, the potential target price would be C$8.20!
According to the 2023 PEA, the processing of the 923,000 tonnes of tailings would take 3.5 years (270,000 tonnes each year for the first 3 years & 113,000 tonnes on the forth year with the mill operating 9 months per year to avoid the freezing months). Operating 12 months/year, the processing of the historical tailings wold take ~3.1 years (NOTE: no pump box is required for the processing of the historical resources so processing isn’t limited to 9 months/year to avoid the freezing months).
In total, processing of the tailings and the historical resources is estimated to take about 6.7 years at 100% production capacity.
ESGold’s Potential Target Price
Using Metal Prices in Dec 2024
~C$8.20*
*Equivalent price using DNA PM’s valuation at its target price plus the additional potential profit from the increase in metal prices since 2014 as cash per share & applying it to ESGold using 46.4M shares (current as of 01 Dec 2024)
*Processing the tailings & the historical resources is estimated to take ~6.7 years at 100% production capacity
*C$8.20 would give the company a mkt cap of ~C$380.5M (a significant portion of it would consist of cash)
Link to the full research report: Research Report
Initial In-Depth Research Reports
Although these reports were released when T$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
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)
- 2009 Drilling by Excel Gold Mining
- 1999 Exploration Report (GM58886)
- Resource Evaluation Report (2010 English – Marchand)
- Global VMS Deposits Make Attractive Investment Targets
Articles:
Podcasts:
- CA$HMIRE PODCAST 01 Feb 2023 Part 1 of 3 (French)
- CA$HMIRE PODCAST 01 Feb 2023 Part 2 of 3 (French)
- CA$HMIRE PODCAST 01 Feb 2023 Part 3 of 3 (French)
The following links are indirectly related to the company:
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.
