Kenorland Minerals TSXV:KLD is a North America focused project generator with some significant institutional backing and partnerships.
The company’s management says they look to identify gaps in exploration maturity using a range of data to identify new districts to explore. This requires considerable depth and expertise in the management team, which this miner has in spades (if you’ll forgive the pun), led by CEO Zack Flood.
Kenorland Minerals is well-funded, with CAD 20m in working capital as of 12 December 2022 and we also note the presence of Sumitomo Metal Mining on the shareholder list, which is in for 10.1% of the company.
The company currently has a hefty 1.3m hectares of mineral rights which it is systematically exploring. This includes no less than six projects in Quebec, as well as several more in Alaska, British Columbia, Manitoba and Ontario. There is a combination of 100% owned, join venture, under option and royalty projects, and while gold projects are dominant, there are some intriguing looking lithium and nickel projects in there too.
Kenorland recently began diamond drilling at its Chebistuan gold project, which is located in the northern Abitibi greenstone belt in Quebec. It has an exploration budget of CAD 1.5m which has been approved by Newmont. This will include 3,500m of diamond drilling including three drill fences to test bedrock across a structural corridor at the Deux Origination target area.
The project consists of 3,078 claims which are 100% owned by Kenorland. It covers around 100km of a major east-west trending defomation zone which the company says may represent the continuation of the Sunday Lake Deformation Zone. This is important because it is host to major gold deposits like Detour Lake and Fenelon. It is also located west of some very lucrative gold mining camps at Chibougamau and Chapais (which have yielded over 6.5m ounces of gold and 1.6bn lbs of copper historically).
We think the four main planks for an investment in Kenorland Minerals are the quality of its backers, including the health of its balance sheet, the highly talented mining team itself, and the wide portfolio of prospects it already controls. We have mentioned Sumitomo Metal Mining above, which is significant, and there is also the company’s relationship with Newmont to consider.
Kenorland Minerals uses a project generator model which helps to reduce overall exploration risk. Followers of Cloudbreak Discovery LON:CDL in the UK will be familiar with this model. Kenorland works with major mining companies like Centerra [LON:TSX:CG] and Antofagasta LON:ANTO to partner on project exploration, drawing on a big treasury of funding from these firms. This helps to strip away a lot of the risk that might exist for investors at the early exploration stages of the project. The downside to this approach is obviously that eventual profits from projects are going to be reduced.
Investors should pay attention to the considerable and highly experienced team within this explorer. Scott Smits is notable as VP for exploration, and was a leading geologist on the Madrid deposit at Newmont Mining’s Hope Bay. The chief geoscientist is Dave Stevenson, who has over 10 years of exploration and geoscientific research under his belt, including activity in Australia and South America.
Companies like Kenorland can be a lower risk, more diversified approach to getting into mining, especially if you are after more earlier stage exposure than a traditional mining fund, but don’t want the higher risk of a single project explorer.
