I recently visited FireFox Gold Corp (FFOX.V) in northern Finland and will share my impressions from the trip and my current view on FireFox Gold as an investment case. Please note that I own shares of the company and the company is a banner sponsor. Thus assume I am biased and always do your own due diligence!

Note: FireFox Gold is having a webinar tomorrow, September 13 at 1pm PT / 4 pm ET and you can SIGN UP HERE.

 

Recent News:

Recent Interviews:

Take-a-ways From Site Visit:

  1. CEO Carl Löfberg is extremely passionate about FFOX and wants to see more than one discovery within the next several years
  2. Chairman Patrick Highsmith still has the best accent in the mining space and has seen it all in mining
  3. Dr. Richard Goldfarb aka “the father of Orogenic gold” is one cool (and very smart) dude.
  4. Mikko is a young superstar
  5. Sven is a great structural geologist and has some great stories
  6. Mustajärvi has a lot of room to grow
  7. Mustajärvi is “just” one of many highly prospective targets
  8. The CLGB gold rush is just beginning and there is still a tonne to learn about this gold belt
  9. FireFox will be much more aggressive with the drill bit than your typical junior
  10. Multiple targets are planned to be drill tested over the coming months and years
  11. The infrastructure in the region is great

Impressions from the Site Visit

The Central Lapland Gold Belt (CLGB) gold rush is very much in its infancy. Balance of probabilities would dictate that there are more deposits such as Kittilä (Agnico Eagle) and Ikkari (Rupert Resources) around. There simply has not been much exploration done in this belt and there is a lot more to learn about the geology. My impression is that this is really a “virgin” gold belt where I would expect a lot more discoveries will unfold over the coming years and decades.

One of this biggest take aways was that FireFox Gold has really put in a lot of thought into picking its very large land package. These claims are not some un-prospective “breadcrumbs”, that were left over by larger companies, which usually gets staked by companies that want to ride the “nearology” hype (which often happens in a new gold rush). FireFox has prime, virgin ground with geologies that are similar to both Kittilä and Ikkari. On that point the team was very excited about a whole swath of prospects including “Sarvi” (north of “Ikkari”, Area 1) and “Jessiö” (which is near Aurion’s “Risti and “Launi” targets) and that is in addition to the high-grade Mustajärvi discovery. What is even better is that I got the feeling that the company wants to be very aggressive with the drill bit. CEO Carl Löfberg is what I would consider the definition of a high achiever and there was no mistaking his hunger to see FireFox hit it out of the park. In fact he hopes to see multiple discoveries over the coming years. Since the management team is the steward of my invested money I want to see a group of people who want to succeed and not just work for a salary. In other words I do think FireFox will “dare to fail” in terms of putting the drill bit aka “the truth machine to work”. This is further evidenced by the recent Crescat Capital interview with Chairman Patrick Highsmith where Patrick explains that there will be a series of targets that will be drill tested over the coming months and years:

 

 

In contrast a lot of not so serious juniors just keep sampling for years on end since they don’t want to risk killing a target. There are others that amass huge land packages but never get around to actually doing much work so the size of the potential becomes a moot point for shareholders. FireFox has enough land and targets that the company can drill test a lot of them without running out of potential prospects. This is very encouraging in my book since I remember Pierre Lassonde’s statement that “95% of the value is created via the drill bit”…

And drill they will. Which further highlights the confidence in the team’s ability to spot prospective targets and the prospectivity of this new gold belt because drilling costs money and carries risk.

On that note the company just released another great hole from the Mustajärvi discovery which graded an impressive 7.69 g/t Au over 16.45 m and closer to the bottom of the hole there were two more high-grade hits in the form of 9.19 g/t Au over 1.0 m and 3.92 g/t au over 2.0 (Not true widths but drilling is believed to be perpendicular to the dip of the mineralization):

 

A picture of multiple veins is emerging and the system has been traced for quite a long way already:

 

 

This high-grade discovery, which is believed to be Epizonal in nature and shares similarities in geology with Rupert’s Ikkari discovery, has de-risked FireFox and put some implied margin of safety to the story (Which is very welcome!). Drilling is expected to commence again shortly.

Back to the site visit: It was quite encouraging to learn just how motivated the exploration team (headed by Mikko) is and how well they are at managing the relationships with land owners, suppliers and the government etc (which can be a bit tricky apparently). This is a competitive advantage that no “foreign” junior can easily replicate in Finland.

To have an “all star” like Richard Goldfarb on board is of course a big positive. I asked a lot of questions and learned a lot about orogenic gold over several days. The young(er) geologists Mikko and Sven confirmed that they are continuously learning a lot from Goldfarb which was great to hear. Again, these are very hungry guys who are working very hard to unlock Finland’s next big gold discovery.

The constant work that has been done on the corporate and geological front by the FireFox team has led to the carefully selected prime ground you see below:

 

 

One important thing to point out is that even though this greenstone belt has been extremely underexplored it has already managed to produce Kittilä, Ikkari and the high-grade discoveries made by Aurion and FireFox Gold. Is it just luck or is it a testament to the prospectivity of the gold belt? Balance of probabilities would suggest that it is a sign that this is a very gold rich piece of Proterozic terraine and the gold rush has barely started.

As it stands now there is a total of four drill-ready targets in FireFox’s immense portfolio:

  1. Mustajärvi which is already a discovery
  2. Sarvi which is just north of Rupert’s Area 1 (Ikkari)
  3. Utsamo which sits between Aurion’s Risti and Launi targets
  4. And Saittavaara which is south-west of Launi

 

 

It should also be noted that the infrastructure in this whole area is great which makes exploration easier and less costly. Furthermore Finland’s best drill company is a shareholder of FireFox Gold!

Closing Thoughts

I was very positively surprised to see how ambitious and aggressive Carl and Patrick’s plans are for FireFox. Thankfully the FireFox team has Mikko and Sven who are both very energetic and more importantly curious. There was a lot of brain storming going on during the site visit and a long-standing joke is that Mikko is so obsessed with discovery that when he is not working he is dreaming of work. This young and productive team also has the help of even more experienced people such as Patrick Highsmith, Richard Goldfarb and Quinton Hennigh etc. All in all I see it as a good mix of brains and energy that is probably very much needed to evaluate so much land and unlock a new gold belt.

I am very happy to say that after the visit I consider my position in FireFox to be a long term investment and that I expect Mustajärvi to grow and I would not be totally surprised to see an additional discovery or two over the coming years. In light of the currently abysmal Enterprise Value I see the Risk/Reward as being very favorable. Rupert Resources has a Market Cap of C$986 M vs FireFox of C$28 M. To say that there is room to run for FireFox if the company keeps up the good work and gets a bit lucky would be an understatement. Rupert’s valuation shows that success in Finland can be greatly rewarded by the market and it is in fact considered to be a tier #1 jurisdiction. The added benefit of great infrastructure in the areas is another boon.

Given the size and and quality of FireFox’s project portfolio I think it is safe to say that the company is cheap in light of the Mustajärvi discovery and all the implied potential across ~800 km2 of prime ground in one of the hottest and seemingly most prospective areas around the globe.

Keep in mind that good Risk/Reward is not the same as a high chance of success. This is exploration and it is inherently risky. FireFox Gold is not an exception and I wouldn’t go too deep into any single early stage exploration company.

I will update this article later with some pictures from the site visit.

 

Note: This is not investment advice. Consider me biased and make your own due diligence. Junior mining stocks can be very volatile and risky. You are responsible for your own decisions and money. I can buy and sell shares at any time.

Best regards,

The Hedgeless Horseman

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