Mayfair Gold Caps Off Outstanding Year

2023 was an outstanding year for Mayfair Gold (TSX-V: MFG; OTCQB: MFGCF). The company was amongst the TSX Venture Exchange’s top three performing stocks, up close to 80% over 2022. It also garnered recognition as one of the top 50 stocks on the OTCQB venture market across all commodities in the United States.

That’s quite an accomplishment for a company that was founded less than five years ago. It also speaks to the quality of its flagship Fenn-Gib project located in the Timmins Gold Belt, a “tier-one” jurisdiction that is home to some major gold producers such as the Newmont Gold corp (TSX: NGT; NYSE: NEM). All told, the region has produced more than 80 million ounces of gold over the past 50 years.

“The first thing that attracted us to the Fenn-Gib project is the geology,” stated Patrick Evans, Mayfair’s President, CEO and Director. “It’s a broadly disseminated gold deposit, more like a copper porphyry deposit rather than typical Timmins gold deposits, which are  mostly stacked quartz vein systems which can present risks because the continuity of mineralization over the full length of these veins can be questionable. We've had a few cases in Ontario where  multi hundred-million-dollar mines have been built on top of quartz vein deposits, and then when it comes to mining, they can't find the gold. With Fenn-Gib, every tonne of ore that comes out of the mine will have gold in it.”

The progress that Mayfair has made at Fenn-Gib in a little more than three short years is impressive. The property, which initially had a two-million-ounce deposit, is now up to 3.5 million ounces, an increase of over 70%. With four drill rigs continuing to turn, there is a high level of confidence that the resource can grow to about four million ounces by the end of this year.

Along with the growth of Fenn-Gib’s estimated resource, the company’s market cap has also grown to over C$200 million. Much of that value growth has been driven by evidence of resource upside potential beyond what has been defined so far. “We plan to continue drilling on what we call the Footwall Zone, which is really where we've seen the additional tonnes and ounces come from,” Evans said. “We’ll see if we can define a resource there. It’s expected that Footwall’s higher-grade resource will translate to higher cash flows in the early years of production, and that should help service any debt that Mayfair takes on to build the mine.”

A second promising deposit, called the Contract Zone, was also discovered below the main deposit at Fenn-Gib. It will get more attention once the open pit has been mined out, likely in 15 years. And there is always the potential for additional discoveries given the richness of the Timmins/Abitibi region. Any new discoveries would quite likely take the Fenn-Gib total resource well beyond the five-million-ounce mark and extend mine life past the 20-year mark.

A rigorous drilling program is on tap for the coming year with a pre-feasibility study planned during the next few months. Depending on the size of the proposed mine, operations are likely to start any time between 2027 and 2029. “The engineering and the economics will drive that decision process,” Evans said. “The object here, of course, is to turn the asset to cash as expeditiously as possible, but also in the most responsible and sustainable way. As a smaller company with a limited balance sheet, we would likely be inclined to go with a smaller operation initially and then expand it in phases.”

As if their recent accomplishments were not enough, Mayfair has set its sights on becoming Canada’s first zero carbon gold mine powered entirely off renewable grid power which is abundant in Eastern Canada. From the start of exploration in 2021, Mayfair established Fenn-Gib as Canada’s first carbon neutral gold project with the help of carbon offsets that  fund residential solar panel installations across Canada. But Mayfair’s carbon neutral goal really gets interesting when it’s applied to its planned mobile fleet of haul trucks. “These trucks are typically powered by diesel fuel,” Evans said. “We're looking to see if we can deploy a fleet of battery electric trucks. Battery electric 110 tonne haul trucks are widely used, and if we can deploy them at Fenn-Gib, then there's the potential that our entire operation can be powered from the grid.”

While Evans and the company leadership have genuine concerns about the environment, they are also smart enough to realize that the days of escalating global carbon taxes are on the horizon. “Nobody knows what the level of those carbon taxes might be,” Evans said.  “But when you’re spending hundreds of millions of dollars building a mine, you need to think about what costs are going to look like in five, ten, fifteen years down the road.”

More than anything, this is a move to protect shareholder equity, by relying on foresight to help insulate Mayfair from potentially new carbon taxes in the future. It could also position Mayfair to sell carbon credits when the time comes.

Fortunately, the good work that Mayfair is doing in this area has not gone unnoticed. Digby ESG, a company widely known in the mining industry as a leading independent auditor, has been keeping close tabs on Mayfair. According to Evans, “these audits help our leadership team monitor our progress. Externally, it's a little like having your financials audited by an independent auditing firm. It brings a level of credibility to what we're doing.”

In 2022 Mayfair rated a double B. Now, they’re up to an A, and are hoping to achieve a top AA status in the near future.

“Our intention is to build on what we’ve done at Fenn-Gib in a sustainable way,” Evans declared. “That will increase the probability that investors get exceptional returns.”

So far, all indicators are pointing up, and there is the hope of some extraordinary times ahead.

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