EDITOR'S NOTE: Kitco News is turning five; to celebrate, all this week, we are featuring articles that look back at the gold market, showcasing the changes we've seen during the last five years. Click here to see our full coverage.

Abitibi Royalties Eyeing First Income Beginning In 2015 - Ian Ball

By Alex Létourneau Kitco News
Thursday October 23, 2014 8:48 AM

(Kitco News) - Quebec-based Abitibi Royalties Inc. (TSXV:RZZ) expects to begin receiving its first royalty income from the Canadian Malartic mine, located in northern Quebec, at the beginning of 2015.

Ian Ball, president of Abitibi Royalties, spoke with Kitco News at the Quebec Mining Exploration Xplor 2014 Convention in Montreal, Quebec, saying generating its first income is a positive milestone.

“The first thing we have is a 2% net smelter royalty on the Canadian Malartic mine called the Gouldie deposit, which is south of the main ore body,” Ball said. “Our last update from Agnico Eagle and Yamana was that pre-stripping had started there in the second quarter, so we’re looking for our first royalty income to begin at the beginning of 2015.”

The company also reported positive drill results Wednesday from its Malartic CHL deposit, located next to Canadian Malartic, specifically from the Odyssey North area.

 “There are five outstanding holes from Odyssey that we’re waiting on from Agnico and Yamana,” Ball said. “Most importantly is we put up none of the capital, so we’re in a good position from that standpoint.”

Ian Ball, President Abitibi Royalties Inc.

Ball, hired as president in early August after stepping down from McEwen Mining as president, walked into a bit of a hot pot with Abitibi Royalties, Agnico and Yamana.

In late May, Abitibi Royalties filed an injunction in court regarding ownership rights of the Malartic CHL property – before Ball came on as president.

“We have the legal dispute with Agnico and Yamana where we’re trying to exercise our right to acquire all the property,” Ball said. “So we’re in a position where we’re trying to purchase their 70%, and, as a fall back, as a worst case position, Abitibi’s left with its 30% free-carried interest to commercial production.

“I think the most value for Abitibi is to see the property developed and having an involvement in that.”

He also noted the strategic location of the Malartic CHL deposit, nestled between the Canadian Malartic mine and Agnico’s Goldex mine with Agnico’s Lapa mine not too far off.

 While Ball traded the Mexican heat with the McEwen mines for the cooler northern Quebec climate, he has spent time exploring in Quebec and believes the change in government is a positive for the province.

“I did some exploration work in Quebec in 2007 and 2008, so it was under a different government, and at that time you had your exploration credits, and you had a jurisdiction you could permit,” he said. “So if Quebec can get back to there, without this talk of excessive royalties, I think Quebec could easily regain its status as one of the best mining jurisdictions in the world for mining.”

Asked what he would implement at Abitibi Royalties from his days at McEwen Mining, Ball cited the need to work with communities, which happens to be a big part of trying to bring a mine online in Quebec.

“It’s not about the money, it’s about knowing the community, sitting down with them and understanding what they’re needs are and not just throwing money at it, or a glossy report cover – which most mining companies do,” he said.

By Alex Létourneau of Kitco News aletourneau@kitco.com
Follow Alex Letourneau @alex_letourneau

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

kitco news

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y
 

Interactive Chart