It’s about to begin: The Canadian gold explorer Formation Metals (WKN A3D492 / CSE FOMO) has officially notified the responsible local authorities that they intend to start exploration work on the N2 project in Québec within 30 days. This is the final necessary step from the company’s side. Now, only the last (work) permit is pending, which the company under CEO Deepak Varshney expects to receive within the next few weeks. This means that Formation can start its gold drilling as planned.
In total, the company plans to conduct about 20,000 meters of drilling on N2 spread across several phases, building on the historical resource of around 870,000 Gold ounces. This is distributed across 18 million tonnes at an average of 1.4 g/t gold (~809,000 ounces of gold) in the A, East, RJ-East and Central zones, as well as 243,000 tonnes at 7.82 g/t gold (~61,000 ounces of gold) in the RJ zone.
The first phase involves 5,000 meters of drilling, which will explore expansion targets of the A-Zone. This is a near-surface, highly continuous historical gold deposit with low variability. It contains about 522,900 historical ounces, with only about 35% of the strike length investigated so far. This means that around 3.1 kilometers of strike length are still open!
The RJ zone, which yielded grades of up to 51 g/t gold over 0.8 meters in historical drilling and was expanded by previous owner Agnico Eagle Mines in 2008 – the last drilling on the project – will also be explored with drilling in this first phase.
Gold Price at $3,400 USD/Oz: Excellent Timing for Formation Metals
Formation Metals’ CEO believes it’s possible to prove up to 3 million ounces of gold on N2 and views the first 5,000 meters of drilling as the start to achieving this goal. The company will, according to Varshney, build on the successes of its predecessors. In his view, the discoveries made by these companies – Agnico Eagle and Cypress – following the creation of the historical resource demonstrate the expansion potential of N2.
The timing could hardly be better, especially when compared to historical circumstances. While an ounce of gold cost around $800 USD then, the gold price now stands at almost $3,400 USD per ounce – more than four times as high! Good, then, that Formation Metals will begin its drilling in this environment…
Potential for Industrial Metals also Being Investigated
However, the company will not focus solely on the gold potential of N2. A recently completed reassessment of the base metal potential showed that in addition to gold grades of more than 1 g/t gold, significant copper and zinc mineralization also occurred in the historical drilling.
This year, Formation Metals will therefore focus on the northern part of the N2 project area to expand the gold occurrences and make new discoveries along identified zones and fault systems associated with the main deformation features (particularly the WNW-ESE trend). In addition to drilling, IP surveys are also planned to model mineralized zones, which will ultimately contribute to the creation of an updated resource compliant with the Canadian NI-43-101 standard.
Formation Metals will also continue to review historical base metal analyses from older drill cores and conduct additional work in 2025 to evaluate the copper and zinc potential of the property. With working capital of around 2.8 million CAD, they are in a strong position to carry out these exploration programs. We eagerly await the starting signal.
