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Genesis Metals Continues to Prove Up Chevrier Mineralization; Further Drilling About to Start

Source: Critical Investor for Streetwise Reports

February 27, 2018 (Investorideas.com Newswire) The Critical Investor provides an update on this company's new geologic model of its Quebec gold project.

After having completed a 10,150m 58-hole drill program on the Main Zone, plus 25 new trenches and re-sampling of 11 historic cores, it seems that Genesis Metals Corp. (GIS:TSX.V; GGISF:OTC) is well on its way to get more insight in the complex geology of Chevrier, therefore an update is warranted. Follow-up drilling on a new Main Zone extension is about to commence in this spring, and a maiden resource estimate is scheduled for Q3, 2018. On top of that, the company is contemplating drilling other geological targets as well, as the property has abundant exploration potential.

All presented tables are my own material, unless stated otherwise.All pictures are company material, unless stated otherwise.All currencies are in U.S. Dollars, unless stated otherwise.

2. Background summary

Genesis Metals is a Canadian exploration and development company that developed a new geologic model for its fully owned flagship Chevrier Gold deposit in Chibougamau, Quebec, and is hopefully further proving it up by a 2018 phase drill program, and also owns the October Gold property in Ontario, located in the vicinity of and on trend with Goldcorp's Borden Lake deposit and Iamgold's Cote Lake deposit, which isn't a priority at the moment. The management team is built around a lot of players of the Underworld Resources story, that got bought out for $138M.

Genesis Metals currently has 74.8M shares outstanding (fully diluted 104.85M), 22.5M warrants (the majority is due @C$0.20 or more) and several option series to the tune of 7.225M options in total, which gives it a market capitalization of just C$7.48M based on a share price of C$0.10. Management and advisors hold about 12%; other large shareholders are Delbrook (10%), Eric Sprott (7%), Osisko (6%) and U.S. Global (5%), in total about 50% is in strong hands. The company has about C$750k cash in the treasury at the moment.

Share price; 1 year time frame

After initial disappointment on misses on the IP/exploration targets outside the Main Zone, and tax-loss selling in November and December 2017, the stock had a rough time, but recovered somewhat at the beginning of 2018, only to give back most gains on recent market/metals volatility. An updated resource estimate is planned for Q3, 2018. This should be able to move things, as the current market cap is tiny and would implicate undervaluation according to peers.

Chevrier Gold project

A quick recap: The Chevrier Gold project is located in the very prolific Abitibi Greenstone Belt, which has seen over 170Moz of gold production until now, and is host to some of the largest gold mines of Canada, like Canadian Malartic and Detour Lake. The Chevrier land package consists of 120square kilometer approximately 35 kilometers South West of Chibougamau, which has an airport and highway.

The property has ideal infrastructure with direct road access, and a powerline runs within the claim boundaries, so the cheapest power of Canada (a huge advantage of Quebec, besides a 25% tax refund on exploration costs) comes at no additional costs, and road construction isn't necessary either.

Chevrier Gold project; location/infrastructure

The former owner of Chevrier had the 2010 NI-43-101 compliant resource estimate completed by Met-Chem, which resulted in an Inferred resource of 4.6Mt @1.99g.t Au >295koz gold for the Chevrier Main Zone deposit. Met-Chem also came up with a 3D model for Chevrier South, which allowed an estimate of a tonnage and grade of mineralized material potentially present at Chevrier South: 8.5-9.0Mt @1.8 - 2.2g/t Au. Management estimates it will take about 20 drill holes to upgrade South to a 43-101 compliant resource estimate. By using the average numbers, this might generate a hypothetical 559koz gold for the Chevrier South deposit.

Taking this a bit further, both deposits together would add up to a hypothetical 854koz Au, and most of it is within reach of an open pit depth (