Turmalina Metals (TSX-V:TBX) has landed on the Toronto Stock Exchange, in what could be one of the year’s most exciting IPOs in the gold sector.
With a market cap of just C$25 million at 50¢ a share, has Christmas arrived early for investors?
Turmalina’s mantra is “Grade is King!”
The company’s experienced management and geological team has an established pedigree of finding world-class metal deposits.
As such, Turmalina has already attracted significant investment from a number of North America’s biggest institutional resource investors.
There is serious money backing Turmalina and its outstanding team.
CEO Rohan Wolfe has assembled an elite band of intrepid metals explorers, all world-leading experts in their fields and with a chain of world-class discoveries behind them.
As an exploration manager in the multi-billion dollar Ivanhoe Group Wolfe has contributed to his fair share of gold, copper, molybdenum and rhenium discoveries over 20 years from the Gobi desert of Mongolia to the outback of Australia and beyond.
Alongside Wolfe is Bryan Slusarchuk, his fellow Turmalina co-founder and the co-founder and former president of K92 Mining (CVE:K92), which for the past two years has been one of the best performing gold stocks in the world.
Slusarchuk took that gold exploration company public in May of 2016 and early shareholders are now up as much as 15x on their original investment. K92 is worth more than $500million today and won multiple awards in 2019 based on delivering outsized shareholder returns.
K92 made a massive discovery to drive this growth and the experience made Slusarchuk eager for another high-grade gold adventure.
When was the last time that you had the opportunity to invest in such an experienced team that clearly has the Midas touch?
Between them, the Turmalina team has been behind major discoveries that only people at the top of their fields tend to make.
And let’s be absolutely clear here these people are at the very top of their games.
Now they’ve turned their attention to South America and a very specific type of rock formation…
Hunting for high-grade metal reserves in the most extraordinary places
Applying the experience and talent of its management team, which includes other extremely well-respected names in the mining industry as well as Slusarchuk and Wolfe, Turmalina has rigorously sought out metal exploration projects with exceptionally high grades.
The company spent two years as a private firm meticulously pouring over research notes and technical reports in its quest to identify the hottest exploration targets it could find.
But what was the team searching for?
The answer is thrilling.
We’re not kidding.
Turmalina’s team has been hunting for places where magma has pooled deep under a range of volcanos, where water, gases and metals build up in the magma until they have so much pressure they ‘erupt’ into the surrounding rocks. These tourmaline breccias as they’re officially known can make for some mouth-watering targets.
According to Wolfe, who along with his team are some of the world’s leading authorities on tourmaline breccias, these geological formations can play host to large metal deposits with exceptionally high grades.
Wolfe’s hypothesis is compelling.
These ‘misfired volcanoes’ could contain huge gold or copper or other precious metal mines, full of exceptionally high-grades, just waiting to be discovered.
When an active, forming volcano failed to break through to the surface, it still dragged up massive volumes of molten magma from the center of the earth. This magma contains significant quantities of super-heated liquids and metals.
Formation of tourmaline breccia pipes (Source: ValueTheMarkets.com)
Now, because the rising magma did vent to the surface in the form of an eruption, it remained trapped underground together with all its mineral contents. Over time, the magma cools and the metal-bearing liquids concentrate until the pressure builds up so much they explode out of the surrounding solidified magma, forming a pipe of shattered rock (what geologists call a breccia) full of metals that can rise 2-3 kilometres above the magma body.
This is all pretty standard stuff for high school geology students. However, what is really exciting for Turmalina is that these breccia pipes are largely overlooked as the fantastic exploration targets they are.
They are unloved by many in the mining sector, but Wolfe and his team of experts in the field are convinced his industry is missing a trick.
Why would you trip over dollar bills to pick up pennies?
Most mining exploration companies aren’t remotely interested in tourmaline breccias. They are too busy falling over themselves chasing “porphyry mineralisation”.
We’ll explain more about this later, but for now, in Wolfe’s words, he believes these firms have “been tripping over dollar bills to pick up pennies”.
This is a bold statement, but if Wolfe is proven correct then Turmalina could be on the cusp of making some truly significant discoveries.
When formed underground, these tourmaline breccia “pipes” resemble “inverted carrots”, with the breccia pipe becoming wider at depth towards its now solidified magma source.
The diagram below shows a tourmaline breccia pipe. Its shape could well explain why the mining industry has overlooked these formations as such a desirable target.
A cross-section of a tourmaline breccia (Source: Turmalina Metals)
Because they are narrower at the top, any initial discovery of metals in a tourmaline breccia might not look that appealing to average explorers. Unless the exploration company continues to drill deeper down and further out, which may seem unconventional, they could well miss a huge opportunity to discover a bonanza deposit.
After all, the pipes of mineralization can extend to depths of several kilometres, increasing in width – often to hundreds of metres in diameter.
And this is exactly what Turmalina is hunting for now.
Critically, tourmaline breccias can carry a wide variety of minerals like gold, copper, molybdenum, silver, lead, and zinc in huge quantities.
What’s more, they almost always form in clusters.
Fluids, metals and pressure build up in these vast magmatic bodies as they cool and solidify. Pressure builds up and explodes out through the solidified magma, forming a breccia pipe, which then solidifies and seals the magma chamber. Pressure then builds up again and a cycle of pressure build up, explosive breccia formation and sealing occurs again and again. As these magma bodies can be 10s of kilometres long and take tens, if not hundreds, of thousands years to fully cool and crystallise you end up with clusters of breccias bodies above and around the cooled magma.
Inevitably, this would create a number of pipes stemming from the same source. It stands to reason, therefore, that it if the exploration of one failed volcano leads to the discovery of a substantial metal deposit, then further exploration in the surrounding area could lead to the discovery of even more deposits, with similar exceptional grades.
After all, if the magma were rich in metal mineralization in one pipe it seems logical that it that would have been distributed among others.
With this in mind, Wolfe cannot understand why so many other exploration firms ignore these formations, to their obvious detriment, pushing past them to move on to lower-grade and less exciting porphyry mineralization.
Inexplicably, they often treat tourmaline breccias as mere pathfinders to their beloved, boring porphyries.
But what makes Wolfe and his team SO confident they can find immense riches that so many others have simply missed?
The top grade is what gets you paid!
Yes, it’s ALL about the grades.
Of all the tourmaline breccias it analyzed around the world, Turmalina zoned in on two potentially incredible assets – the San Francisco gold project in Argentina and the eponymous Turmalina Copper Mine in Peru.
San Francisco sits at the top of what has been described by some as one of the highest-grade gold-copper tourmaline breccias ever discovered.
This project offers truly stunning, shallow grades, with existing intersections ranging from 2g/t-10g/t gold, 50g/t-150g/t silver and 0.3%-3% copper.
Most excitingly, San Francisco represents just one opportunity in a cluster of 67 pipes mapped across Turmalina’s project area.
Meanwhile, the Turmalina Copper Mine in Peru, which the company is assessing, hosts a large copper, gold, and molybdenum tourmaline breccia mine – and, of course, a cluster of additional pipes.
Rock chip sampling at the mine has already revealed grades of up to 5.2% copper and 1.6% molybdenum.
These figures place both projects firmly into exceptionally high-grade territory by any measure.
Now that Turmalina has come to market armed with the C$7 million it raised before listing, it has an ambitious work program ready to go that can propel both projects forward.
Dozens of drill targets have been identified and Turmalina will be relentless in its pursuit of proving up resources in both Argentina and Peru.
If Turmalina can get further confirmation of the exceptional metal grades it has already encountered, its stock price could well be primed to rocket.
With so much news flow to come, 2020 promises to be an extremely exciting year for this company.
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