Significant expansion potential
Formation Metals (CSE:FOMO) has optioned the promising 4,400-hectare N2 gold project in the heart of the Abitibi mining district in Quebec out of the portfolio of Wallbridge Mining (TSX: WM). The project hosts a historic resource of 18.2 million tonnes grading 1.48 g/t Au (~810,000 ounces Au; Cyprus, 1994) as well as an additional high-grade core area comprising approximately 65,000 ounces of gold at average grades of 7.8 g/t gold.
And Formation Metals sees significant potential in the project, where the previous owner, Balmoral Resources, identified a number of new geophysical targets between 2010 and 2018 without testing them with diamond drilling. Formation will initially seek to confirm the historic gold resources while advancing the numerous, lesser-understood gold zones on the property. No drilling has been conducted on the property since 2008, and all known zones of gold mineralization are open for expansion at depth and along strike.
Formation CEO Deepak Varshney commented, “The N2 property offers significant exploration potential for our young company. In addition, it is perfectly located in the mining-friendly jurisdiction of Quebec, which mitigates the financial risk of exploration due to its tax advantages.”
Under the option agreement with Wallbridge, Formation Metals can acquire a 100% interest in the property by spending $550,000 in cash, issuing 4,000,000 common shares of the company and incurring $5,000,000 in work expenditures over a six-year period. At signing, C$50,000 in cash and 1,000,000 Formation shares are due. The bulk of the work commitments (C$2.8 million) fall in the sixth year.

Figure 1: Regional claims along the Casa Berardi trend; 1: Maudore Minerals Ltd. MRE, 2012; 2. Hecla Mining Company Technical Report, 2024; 3. Maple Gold Mine NI-43-101, 2022; 4. Non-compliant with NI-43-101 Cyprus MRE, 1994
The claims are located along the Casa Berardi mine trend, which hosts numerous gold deposits. Only 1.5 km away from the N2 is the past-producing Vezza gold mine (Nottoway Resources). In the broader neighborhood, some 30 kilometers away, are the Douay gold project (511,000 ounces Au indicated, 2.53 million ounces inferred; Maple Gold Mines) and, 120 kilometers away, the Casa Berardi gold mine operated by Hecla Mining (P&P 1.3 million ounces Au). The Casa Berardi Trend of the same name extends over the N2 property. just 25 km south of the town of Matagami, Quebec, and the claims are accessible year-round via provincial and forest roads.

Figure 2: Geology and gold zones of the N2 claims; Geology after SIGEOM, 2024
Summary of the property
The property has been explored primarily since the 1980s, with the bulk of exploration work conducted on the northern portion of the property (Northway), where five zones of gold mineralization related to shearing along contacts between volcanic and sedimentary rocks have been identified. The most extensive of these, the A Zone, has been traced in shallow drilling for more than 1.0 kilometer to depths of 25 to 350 vertical meters. All of the zones remain open at depth and several remain open along strike.
In 1994, a historical (non-43-101 compliant) geological resource estimate of 18.2 million tons at a grade of 1.48 g/t Au (in-situ contained resource of 810,000 ounces of gold)1 reported based on near-surface drilling of approximately 230 diamond drill holes. Preliminary metallurgical testing conducted on drill core from the A Zone indicated that 91.7% of the gold was contained in a flotation concentrate after a moderately fine grind.
A separate historical geological resource estimate prepared in 1994 (non-compliant with NI 43-101) of 243,000 t grading 7.82 g/t Au (in-situ contained resource of 67,000 ounces of gold) was reported for the RJ zone. In 2007, expansion and exploration drilling programs led to the discovery of a new zone of gold mineralization in the hanging wall to the RJ zone, which shows similarities to the mineralization at Vezza. Follow-up geophysical surveys describe drill hole geophysical anomalies associated with this zone that remain to be tested.
Balmoral Resources Ltd, which merged with Wallbridge Mining in 2020, acquired the property in 2010. Balmoral then completed a VTEM survey over the entire property, a data acquisition and an IP orientation survey over 14.4 km covering the three known horizons of mineralization. The results of this work indicated a strong correlation between the chargeability response and the known gold mineralization and highlighted chargeability anomalies along the trend of gold mineralization where no drilling had been previously conducted.
Conclusion: There are different philosophies for exploration companies in their early stages. Some swear by large projects where there is promising data but it has never been tested by drilling. This could be called the “all-or-none strategy”. Formation has deliberately chosen a different path. The company is starting with the advantage of a historical resource. In addition, the project has considerable previous ownership and is in a prominent location in Quebec. In Quebec in particular, it should be easier for the company than elsewhere to raise the funds needed for exploration later on through tax-privileged flow-through funds. On top of that, favorable option terms speak for Formation. The burden of the obligations lies at the end of the option period. With existing cash reserves of around C$1.5 million, a very good shareholder structure, access to capital from the entrepreneurial vision of CEO Deepak Varshney coupled with the geological expertise of Jon Deluce (Abitibi Metals; TSXV: AMQ), we consider Formation to be a top pick among early-stage explorers. We will continue to monitor the company in the future.
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