Resource World Magazine

F E B R U A R Y / M A R C H 2 0 1 5 www.resourceworld.com 43 T he shifting sands of outside factors can play a big part in the relative value of a mineral deposit and perhaps delay a devel- opment decision for decades. Economic conditions may change quickly from one year to the next. Political risks associated with any jurisdiction are also subject to abrupt change. However, almost all of the mines that have been developed in recent years were the product of exploration work from prior boom cycles. As each new resource sector bull market gets underway some of the orphaned projects abandoned in the past become attractive again. Mega Precious Metals Inc. [MGP-TSXV] is a beneficiary of this process as the company has been able to acquire advanced exploration properties with a work history completed by prior operators. Its flagship asset, the Monument Bay gold/tungsten project in Manitoba, has progressed to where it now stands as a legitimate, late stage, development prospect. The large property area is well served, with extensive camp facilities and even a small assay lab on site. Access is afforded using a winter airstrip set up on the ice of a shallow lake. This has made it easier for the company to continue with cost-effective work programs to advance the project despite its relatively remote location. Consistent, high-grade, drill results have been presented as each phase of exploration has been completed. This success has allowed the company to recently report an updated NI 43-101 compliant resource estimate for Monument Bay. Both the total resources and average grade for the deposit were significantly increased. Just considering measured and indi- cated resources, the project now stands at 2.13 million ounces of gold (1.51 g/t gold average grade) plus 253,000 tonnes bear- ing 9% tungsten minerals. There is also a significant block of resources within the inferred category that may also eventually become part of a mine plan. Mega has more than tripled the total resources since acquiring the project. Testing of sample material has enabled a recovery process to be identified that would enable economic processing for the recov- ery of gold and tungsten from the mineralization. Even using conservative pricing assumptions for each metal, the deposit is still large enough to warrant serious consideration for develop- ment, and there remains further regional exploration potential that could add to the magnitude of the overall project. A higher grade, near-surface, starter pit resource has been outlined that would allow for mining to start with a much lower capital expenditure. This represents a key consideration for any project in this current market regime of scarce development fund- ing. A lower projected capex combined with the potential for low operating costs in the range of $25/tonne, contribute to the appeal of this scenario. Another positive factor is the favorable reputation of Manitoba as a mining friendly jurisdiction, plus the positive relationship that Mega has with the local First Nations that may be affected by any development or exploration in the area. The provincial government is contributing to improve infrastructure in the area, providing funding for hydroelectric development and upgrad- ing roads. Monument Bay is located less than 50 km from a main power transmission corridor. The company plans to continue advancing Monument Bay along the value curve. A focus will be put on moving ahead with environ- mental permitting and engineering studies. The board of directors has been strengthened, in addition to key appointments on the technical team with an emphasis on further regional exploration to investigate the district potential for the large property area. Investors in junior exploration stocks are well advised to con- sider the ability of any company to carry a project and fund work programs. Mega has about $4 million in the treasury to ensure work will continue even if the market sentiment remains bear- ish. The company also controls three other attractive projects and there is the potential to vend a non-core property to raise further cash in the future. There are no guarantees in the junior mining sector, and the risks are even more formidable when the market conditions are difficult. However, the strongest projects will still move ahead and Mega Precious Metals is working to present the Monument Bay deposit as an attractive option for future mine development. The resource tonnage and grade would allow for many years of significant production, with a reasonable projected cost regime, located within a favorable mining jurisdiction. Management has done well to create shareholder value, and given the potential for further exploration success ahead, this company will be one to watch. n mega precious metals moves ahead with monument bay project Aerial view of exploration camp at Monument Bay. Photo courtesy of Mega Precious Metals. MINING

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