It’s been far too long since I’ve written about Scottie Resources, not because the company has not made substantial progress, it clearly has. Please see bios of a strong management team & board below…
Scottie Resources (TSX-V: SCOT) / (OTCQB: SCTSF) is advancing the 100%-owned, past-producing (16-18 g/t Au), Scottie Gold Mine project in the southern (less remote) part of B.C.’s Golden Triangle, ~40 km from the Stewart deep-water port.
The Scottie Gold Mine footprint has been expanded within a larger contiguous claims bloc to include vein targets like; {the M-Zone, O-Zone, Bend Vein, Domino, Wolf, and C&D Zone}, and the Blueberry Contact Zone (“BCZ”). There are > 30 Au and/or silver-bearing targets, yet fewer than 10 have been drilled.
The district-scale, 58,500 hectare land package encompasses the past-producing Scottie Gold Mine, the BCZ, numerous regional targets, and the Cambria & Georgia areas. There are seven past-producing mines in the overall land package.
A maiden resource outlined 703,000 oz at a very strong 6.1 g/t gold (“Au”)-only, of which 528,000 oz grade 8.7 g/t. Importantly, that was based on 50,000 meters of drilling to a depth of ~350 m. The resource that accompanies the upcoming Feasibility Study will include 80,000+ new meters, to a depth of at least 600 m.
Exec. Chairman Brad Rourke said in a recent interview that one of Scottie’s most knowledgeable shareholders thinks there could eventually be up to 3M ounces. The Oct.-2025 PEA delivered a robust, low cap-ex, Direct-Ship Ore (“DSO“) strategy utilizing ore sorting.
The mine plan eliminates the need for an on-site mill & tailings facility, avoiding C$100s of millions in cap-ex, and multiple years of permitting hurdles, thereby slashing the development costs and timeline. Readers should note, there’s another option to the DSO plan.
Scottie remains open to the idea of sending sorted ore to the nearby, (~ 20 km on an existing road), underutilized, 2,500 tpd Premier Mill, owned by Cambria Gold Mines, (the restructured, refinanced Ascot Resources).
However, for now, one should assume Scotties’s ore is headed to Asia. Make no mistake, the Asia route works. A 2025 bulk sample of ~4,600 tonnes (from a 10,000 tonne bulk sample permit) @ ~16 g/t Au validated the DSO mine plan, while generating ~C$9M in net revenue.
More important than the cash flow, the mine plan was tested (except ore sorting). DSO requires a smooth, end-to-end supply chain—from surface extraction & X-Ray Transmittance (XRT) ore sorting, to trucking & loading at Stewart’s deep-water port, and ocean transport.
With the help of mining logistics expert Ocean Partners (“OP“), (a 13% shareholder) Scottie passed the critical bulk sampling mine plan test with flying colors. OP has committed US$25M in project debt, (unfunded).
Therefore, although at PEA-stage, Scottie’s plans are meaningfully advance and the Company is well funded.
Initial cap-ex of C$129M compares to a post-tax NPV of C$668M at US$4,200/oz Au. That’s a strong NPV/cap-ex ratio of ~5.2x. Base case IRR is +60% ($2,600 Au), and +153% at $4,200/oz Au. Production is ~65,400 oz/yr over a 7-year mine life.
It is estimated that each additional 100,000 ounces could add C$180M to NPV. Management, led by Brad Rourke and President & CEO Thomas Mumford, Ph.D, P.Geo, drilled 61,500 meters this season alone. Very few juniors in B.C. executed on such a large Au program this year (or any year).
A recent high-grade intercept at Blueberry returned 27.9 g/t Au over 4.15 m and 51.6 g/t over 2.25. Nothing to see there, just another 100+ {gram-meter} hole… Over years there have been 45+ intervals over 100 gram-meters, including five over 400 g/t Au. One of every 7 has been 100+ gram-meters.
I estimate < 5% of juniors have booked dozens of 100+ gram-meter results. Why? High-grade is NOT the norm, it’s rare. I estimate < 5% of projects globally grade north of 6 g/t (Au-only). Importantly, an updated resource estimate & full Feasibility Study (FS) are planned for 1H/27.
Since cap-ex in the FS should remain relatively low, a larger resource could extend mine life and enhance NPV & IRR. With no mill or tailings facility, initial commercial production is scheduled for 2H/28.
In my view, there’s a very low probability of a blowout in op-ex or cap-ex, just routine inflation, partially mitigated by a favorable move in the US$/C$ exchange rate.
A few years ago, Franco-Nevada bought a 2% Gross Production Royalty for C$8.1M, a strong vote of confidence in Scottie’s 58,500 hectares. For Franco to invest at pre-maiden resource stage, it must have seen potential for a multiple-million ounce endowment.
Beyond Newmont’s significant B.C. footprint (Brucejack, 70% of Red Chris, and 50% of Galore Creek with Teck following its Newcrest acquisition), Majors and mid-tiers are increasingly taking strategic stakes in Au & copper juniors/projects.
Barrick recently invested ~C$21M for a 9.9% stake in Kingfisher Metals, Freeport-McMoRan is advancing earn-ins on Amarc Resources, and has agreements with Finlay Minerals.
Teck maintains its Galore Creek (50%) and Schaft Creek (75%) JVs, while holding ~13% of American Eagle (alongside South32’s 19.9%) and a 9.9% interest in Metal Energy, in which Centerra Gold also holds a stake.
Centerra owns 9.9% of Thesis Gold. BHP ~19.9% of Brixton Metals, African Rainbow Minerals (US$2B) has a ~19.9% position in Surge Copper. Minsur (US$5B) holds ~14% of Pacific Ridge Exploration. Sumitomo Metal Mining is backing B.C. juniors Inomin Mines, FPX Nickel & Kenorland Minerals.
Boliden (US$15B market cap) is funding Amarc as well, and is invested in tiny Golden Sky Minerals. Coeur Mining acquired New Gold. Hudbay’s acquisition of Copper Mountain likewise demonstrates producers’ willingness to acquire well established B.C. assets.
Agnico Eagle is HUGE in eastern Canada, and is now invested in B.C.’s Cascadia Minerals & Vizsla Copper. B2Gold is backing Garibaldi… Key takeaway? Six of the above mentioned producers, most notably Agnico, are new entrants to B.C., and Barrick is re-entering the province.
I just wrote six paragraphs, mentioning 14 producers, demonstrating the robust and growing interest in B.C. Does that mean Scottie is a prime takeover target? In my view, yes, but not necessarily soon, not near today’s cheap valuation.
The Company has over $30M in cash, more than enough to complete a FS by April of next year. In addition to Ocean Partners at 13%, key shareholders include Kevin Jennings (~9%), Franklin Templeton, Ross Beaty, Eric Sprott & Franco-Nevada.
Kevin Jennings is a long-term supportive shareholder and strategic advisor to Scottie Resources. He combines strategic finance expertise (restructuring, turnarounds, M&A), with an enviable track record of hands-on execution.
He served as CFO of African Barrick Gold, leading its IPO. Prior, he held senior roles, incl. VP Corp. Development at Barrick Gold, Dir. at Xstrata Nickel, and Dir. at Falconbridge. Kevin maintains an extensive network of financial & operational industry leaders.
The 500 tonne/day DSO plan involves simple crushing, ore sorting, and trucking material to the nearby Stewart port, then on to Asia. Open pit mining is expected to self-fund underground development.
Average LOM production is ~65k oz/yr. for seven years, but I’m confident that will improve. There’s no way this is just a seven year mine… Primary near-term catalysts are drill results, resource growth, project financing updates, and permitting milestones.
When juniors enter or near production, their share prices can soar. Some of the best-performing names include; Artemis Gold, G Mining Ventures, Montage Gold, Heliostar Metals, Rio2 Ltd., Orezone Resources, Skeena Gold & Silver, Meridian Mining, and Perpetua Resources.
Those nine are up an average of +1,015% (range +335% to +2,745%) from their respective 3-yr. lows. By contrast, Scottie is +207%. Readers are encouraged to dig deeper into this mini-Skeena Resources in the making. The new October corporate presentation is a great place to start.
Disclosures/disclaimers:
The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER] ) about Scottie Resources, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of Scottie Resources are highly speculative, and not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making investment decisions.
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