Canadian gold exploration company Formation Metals (CSE: FOMO / Germany VF1) is in a strong position. CEO Deepak Varshney’s company is on the verge of starting its first drilling program on the promising N2 property — and has now secured fresh capital for it!
According to the company, Formation completed a financing of CAD 2.33 million, with the price per unit at CAD 0.50. Accordingly, the company has now increased its exploration budget to approximately CAD 5.1 million. This not only allows them to extend the first phase of planned drilling to 10,000 meters, but also provides the funds to make the necessary exploration investments to acquire 100% of the N2 project!
In total, Formation plans to drill 20,000 meters with the first program at the N2 gold project, located in the Canadian province of Quebec. To date, N2 has a historical resource of approximately 870,000 ounces of gold, consisting of 18 million tonnes at 1.4 g/t gold (~809,000 ounces of gold) in four zones (A, East, RJ-East, and Central), and 243,000 tonnes at 7.82 g/t gold (~61,000 ounces of gold) in the RJ Zone.
Formation Metals Extends First Drilling Phase to 10,000 Meters
With the first 10,000 meters – previously 7,500 meters were planned – Formation Metals will primarily focus on targets in Zone A. This zone has a near-surface, almost continuous historical gold resource with low variability, amounting to approximately 522,900 ounces of the yellow metal. However, these are contained within a strike length of more than 3.1 kilometers, of which only approximately 35% has been explored by drilling to date.
Additionally, the company also plans to investigate the RJ Zone, which contains high-grade mineralization, as known from historical drilling. This includes a drill hole with 51 g/t gold over 0.8 meters, which was last extended in 2008 by gold major Agnico Eagle Mines. At that time, the last drilling was conducted at N2. Formation Metals expects that its next drill holes will follow in August.
Formation Metals also Sees Potential for Industrial Metals at N2
In addition to exploring the project for gold, Formation will also investigate N2 for its base metal potential. This is because during the recently conducted review of historical drillings, sections with more than 1 g/t gold were discovered, as well as significant copper and zinc intervals.
Formation Metals has now raised approximately CAD 4 million in two tranches, giving it working capital of approximately CAD 5 million. Including tax credits from the Government of Quebec, the exploration budget for the 2025 and 2026 season is the aforementioned CAD 5.1 million, placing the company in a very strong financial position. And if these funds are fully invested in the N2 project as planned, Formation Metals will have acquired 100% rights to the property within two years – instead of the originally assumed six years!
Deepak Varshney, CEO of Formation Metals, stated: “We are very grateful for the support Formation has received from new and existing shareholders. With working capital of over five million dollars, Formation is now in a position to launch the most ambitious drilling program our company has undertaken to date, with 10,000 meters fully funded for 2025. This financing secures Formation’s future with the N2 gold deposit, as we now have the financial means to complete the work under our six-year option within the first two years, four years ahead of schedule.”
Mr. Varshney continued: “We are very excited about the start of our first drilling program at N2. Based on our ongoing review and planning for Phase 1, we feel confident in expanding our initial drilling program to 10,000 meters, which is fully funded.”
Given the size of the property, the compelling geological data, and the established history of the Abitibi Greenstone Belt as a hotspot for gold mining, we are confident that the program will achieve our goal of delineating a near-surface, multi-million-ounce deposit at N2.
We see the potential for a significant gold deposit at N2, and our initial 10,000-meter drilling program marks the beginning of Formation’s efforts to achieve this goal. Our initial program will focus on building upon the successes of our predecessors. The drill findings from Agnico Eagle and Cypress demonstrate N2’s potential. With a gold price of over $3,400, more than four times the price in 2008 when Agnico last conducted drilling on the project, we believe the timing for N2 is perfect, and we look forward to a very busy field season.”
