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October 19, 2016

Report #3 Zinc-Copper-Gold-Silver and Uranium in Canada

Company Details Pistol Bay Mining Inc. Suite 760 - 777 Hornby Street Vancouver, B.C. V6Z 1S4 Canada Phone: +1 604 369 8973 Email: Shares Issued & Outstanding: 24‘770‘757

Pistol Bay acquires high-grade zinc-copper deposits and becomes dominant land holder in the prolific Confederation Lake VMS Belt Today, Pistol Bay Mining Inc. announced the acquisition of all properties and deposits from AurCrest Gold Inc. and Glencore in the Confederation Lake Greenstone Belt southeast of Red Lake in Ontario, Canada. The property package (5’136 hectares) covers a 31 km length of the Confederation Lake Greenstone Belt and includes 2 substantial zinc-copper deposits and a number of zones which are in need of follow-up drilling. In combination with the already optioned, near-by Dixie and Dixie 3 Properties, Pistol Bay now controls 7’050 hectares containing most of the significant mineral occurrences over 43 km of the total 60 km length of the Confederation Lake Greenstone Belt. Charles Desjardins, President of Pistol Bay, stated:


Canada (TSX.V)

“Together with the Dixie and Dixie 3 properties that Pistol Bay already holds under option, this acquisition positions the Company as the dominant land holder in a very prolifically mineralized VMS-rich belt. Our holdings include the largest zinc-coppersilver deposit in the area, the second-largest VMS deposit remaining (Fredart Lake Property), and a portfolio of exploration targets ready for follow up drilling. Pistol Bay proposes an ambitious exploration program that will not only pursue existing targets and known VMS deposits, but will use the latest airborne geophysical survey technologies to explore the whole area to a greater depth than was possible in the past.”

Canadian Symbol (TSX.V): PST

Pistol Bay is engaged in compiling data and re-appraising the AurCrest property with a view to planning an aggressive exploration program that will generate new drill targets, as well as follow up existing target areas and known deposits.


Current Price: $0.11 CAD (October 18, 2016) Market Capitalization: $3 million CAD

Germany (Frankfurt)

German Symbol / WKN: 0QS2 / A12DZH Current Price: €0.069 EUR (October 19, 2016)

Market Capitalization: €2 million EUR



oday’s acquired property package includes 2 major zones with significant zinc, copper and gold grades. Pistol Bay has recognized the opportunity to follow-up on these discoveries with renewed exploration to include a drilling and modern geophysics.

Arrow Zone NI43-101 compliant resources: 3% zinc equivalent cutoff: Indicated: 2.1 million t @ 5.92% zinc, 0.75% copper, 21.1 g/t silver and 0.58 g/t gold Inferred: 120’550 t @ 2.6% zinc, 0.56% copper, 18.6 g/t silver and 0.4 g/t gold 5% zinc equivalent cutoff: Indicated: 1.8 million t @ 6.75% zinc, 0.79% copper, 22.3 g/t silver and 0.61 g/t gold Inferred: 51’630 t @ 3.86% zinc, 0.79% copper, 23.9 g/t silver and 0.58 g/t gold

Research #3 | Pistol Bay Mining Inc.

10% zinc equivalent cutoff: Indicated: 633’000 t @ 14.3% zinc, 1.11% copper, 31.7 g/t silver and 0.85 g/t gold

Copperlode “A” / Fredart Zone The other substantial deposit is the Copperlode “A” or Fredart Zone. It has a historical mineral resource of 425’000 t grading 1.56% copper. The zone was drill-tested to a depth of approximately 200 m over a length of 350 m, and was reported as being open at depth. The area was also explored for molybdenum in the 1970s, and samples containing up to 1.46% Mo were reported. A diamond drilling program was carried out by AurCrest in 2010, in an attempt to expand the resource base by drilling down a possible easterly plunge in the area of an IP anomaly. A fence of 5 holes was drilled, without intersecting any significant mineralization. A borehole EM survey carried out on those drill holes in 2010

identified a strong off-hole conductor in 2 adjacent holes, with an interpreted conductive zone lying between the 2 holes. It is anticipated that this anomaly may represent the down-plunge extension of the Copperlode “A” zone, or possibly a new zone. The following is a partial list of diamond drill intercepts in the Joy-Caravelle area, which occupies a separate claim group west of the main AurCrest holdings: Joy Zone: 3.35 m @ 0.17% zinc, 4.01% copper Diamond Willow: 4.2 m @ 1.8% zinc, 2.3% copper Caravelle Zone: 1.1 m @ 4.4% zinc, 0.2% copper Joy South: 0.6 m @ 17.7% zinc, 0.28% copper Creek Zone: 0.95 m @ 0.16% zinc, 1.37% copper


Research #3 | Pistol Bay Mining Inc.

Bottom-line: The Copperlode “A” Deposit (425’000 t @ 1.56% copper) is a copper-rich zone that may well have a significant gold content. Gold was not assayed in most of the old holes but, where it was assayed for, it showed 0.3-0.6 g/t gold.

• VMS deposits tend to occur clustered in districts. It is not unheard of to identify up to 2 dozen deposits in an area of a several tens of square kilometers. This makes known VMS districts excellent hunting grounds for new discoveries.

In the Confederation Lake Belt there is 1 VMS deposit with a NI43-101 resource (Arrow Zone) and Pistol Bay has it.

• Though it has not always been easy to pinpoint all the deposits in a given location, improvements in exploration techniques have made the process significantly easier.

There are also 4 deposits with non-43-101 resources of more than 100,000 t, and Pistol Bay has 3 of them.

About VMS Deposits • Gold tends to be associated with copper-rich VMS (“Volcanogenic Massive Sulphide”) deposits, while silver is more important in zinc-rich VMS systems.

• Deposits within a specific district tend to have similar metal ratios and a fairly narrow range in composition. • In any given district, deposits will tend to range in size from less than one million tonnes to several tens of millions of tonnes, with most deposits at the small end of the range and only a few large deposits. As such, exploration companies have

been able to identify new VMS deposits in previously discovered districts. • A prime example of this is the Flin-Flon mine in Manitoba, Canada, which has been in operation for over 80 years. The mine was closed then re-opened following the discovery of additional VMS deposits in the area. • VMS deposits are particularly prevalent in Canada. Out of the approximately 800 known VMS deposits in the world, there are close to 350 in Canada. Canadian VMS deposits account for 27% of the country’s copper production, 49% of its zinc, and 40% of its silver. Worldwide, VMS deposits account for much less copper production, at an estimated 6%. However, 22% of the world’s zinc, 9.7% of lead, 8.7% of silver, and 2.2% of gold are extracted from VMS deposits.


Research #3 | Pistol Bay Mining Inc.

Examples of a world-class VMS deposits:

Noranda The Noranda District in QuÊbec contains the most thoroughly studied and documented VMS deposits of any Archean volcanic complex. Over an 85-year period, 20 economic VMS deposits have been discovered by prospecting, geological, geophysical and lithogeochemcial techniques. The Noranda District is also host to 19 small, orogenic gold deposits. These deposits only account for a small amount of gold production. Noranda’s Horne VMS Deposit is the top producer, with almost 10 million ounces of gold production to date.

The Flin Flon Belt For over 75 years, the Flin Flon Greenstone Belt in Manitoba was a significant contributor of base metals and gold. It hosts 27 significant VMS deposits that originally contained over 154 million t of ore. The Flin Flon Belt VMS deposits display a wide range of metal contents and associations including copper, copperzinc, zinc-copper, and zinc-copper-lead deposits. Most of the Flin Flon VMS deposits contain between 1 and 2 g/t of gold. The Flin Flon Zinc-Copper Deposit produced almost 4 million ounces of gold, making it the third largest VMS producer of gold in Canada. The Flin Flon Belt comprises 3 VMS clusters within a large (250 km long) greenstone belt. The Flin Flon cluster contains at least 12 deposits that aggregate 80 million t of which 62 million tonnes was in the Flin Flon Mine that produced from 1930-1992. The 777 Deposit is still being mined from the Flin Flon shaft. The Snow Lake cluster contains 12 VMS deposits aggregating 40 million t. The third cluster is in Saskatchewan and contains 2 VMS deposits. The Confederation Lake Belt is analogous to one of those clusters. It is part of a greenstone belt that extends from Lake Winnipeg in the west to Pickle Lake. It includes the Bisset, Red Lake, Birch Lake and Pickle Lake gold camps as well as iron ore deposits and lithium pegmatites. Birch Lake gold camp is where AurCrest is focussed now.

Underground at the Ansil Mine in the Noranda area, which is the deepest VMS deposit mined in the Noranda camp (average depth below surface of about 1’300 m). The photo shows contact between a magnetite-rich lens and the overlying chalcopyrite-pyrrhotite ore. This ore carries little zinc, but substantial gold grades. Stockworks in the Northwest Rhyolite below the deposit include both copper-rich and magnetite-rich types (source).


Research #3 | Pistol Bay Mining Inc.

The Confederation Lake Belt in the Red Lake Mining District is home to numerous VMS (“Volcanogenic Massive Sulphide�) deposits and showings. The largest VMS deposit to date in this region is the South Bay Mine, which produced between 19711981 approximately 354 million pounds of zinc, 58 million pounds of copper and 3.7 million ounces of silver (with average grades of approximately 11% zinc, 1.8% copper and 73 g/t silver).

The geophysical anomalies identified on the Dixie properties should be followed up with a new drilling campaign


Research #3 | Pistol Bay Mining Inc.

“We’re zinc bulls,” Morgan Stanley said. “But its 2016 price performance has surprised even us. Any upside from here depends on China’s steel production rate and Glencore’s willingness to re-fire some of its mine supply.” Zinc has led gains in metals this year after the shutdown of depleted mines coupled with Glencore’s cutbacks. Chief Executive Officer Ivan Glasenberg has repeatedly argued the case for miners not producing materials into oversupplied markets, saying in May that volume growth can’t be an end in itself. Morgan Stanley said zinc is its top commodity pick, while Goldman Sachs Group has dubbed it the “bullish exception” among metals. (Source: Bloomberg)

Speculation has now turned to whether producers would bring mines back into production. In the half year report Glencore kept full year guidance on zinc production steady at lower levels. A table tucked away in the report gave an indication why. Despite zinc’s huge run-up this year the average price in the first half is still 16% below the same period last year. Glencore may be looking for further evidence zinc has entered a new boom phase before switching on its considerable capacity. (Source)


Disclaimer and Information on Forward Looking Statements:

All statements in this report, other than statements of historical fact should be considered forward-looking statements. Much of this report is comprised of statements of projection. Statements in this report that are forward looking include that Pistol Bay Mining Inc. or any other company or market will perform as expected; that Pistol Bay Mining Inc. will complete the recently announced financing; that Pistol Bay Mining Inc. or its partner(s) can and will start exploring or working on its projects; that the company can raise sufficient funds for a transaction, exploration and corporate matters; that any of the mentioned plans, comparisons with other companies, regions or numbers are valid or economic. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in these forward-looking statements. Risks and uncertainties respecting lithium and resource companies are generally disclosed in the annual financial or other filing documents of Pistol Bay Mining Inc. and similar companies as filed with the relevant securities commissions, and should be reviewed by any reader of this report. In addition, with respect to Pistol Bay Mining Inc., a number of risks relate to any statement of projection or forward statements, including among other risks: the receipt of all necessary approvals and permits; the ability to conclude a transaction to start or continue exploration; uncertainty of future market regulations, capital expenditures and other costs; financings and additional capital requirements for exploration, development, construction, and operating of a facility; the receipt in a timely fashion of further permitting for its legislative, political, social or economic developments in the jurisdictions in which Pistol Bay Mining Inc.. carries on business; operating or technical difficulties in connection with production or development activities; the ability to keep key employees, joint-venture partner(s), and operations financed. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Rockstone and the author of this report do not undertake any obligation to update any statements made in this report.

Research #3 | Pistol Bay Mining Inc.

Disclosure of Interest and Advisory Cautions:

Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Rockstone, its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including Rockstone’s report, especially if the investment involves a small, thinlytraded company that isn’t well known. The author of this report is paid by Zimtu Capital Corp., a TSX Venture Exchange listed investment company. Part of the author’s responsibilities at Zimtu is to research and report on companies in which Zimtu has an investment. So while the author of this report is not paid directly by Pistol Bay Mining Inc. , the author’s employer Zimtu will benefit from appreciation of Pistol Bay Mining Inc.’s stock price. The author does NOT own equity or any other interests in Pistol Bay Mining Inc. However, the authour owns shares of Zimtu Capital Corp., and thus would also benefit from volume and price appreciation of its stocks. Hence, multiple conflicts of interests exist. Therefore, the information provided herewithin should not be construed as a financial analysis or recommendation but as advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Rockstone and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Pistol Bay Mining Inc. has not reviewed the content of this report prior to publication. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect. Please read the entire Disclaimer carefully. If you do not agree to all of the Disclaimer, do not access this website or any of its pages including this report in form of a PDF. By using this website and/or report, and whether or not you actually read the Disclaimer, you are deemed to have accepted it. Information provided is educational and general in nature.

Analyst Profile & Contact Stephan Bogner (Dipl. Kfm. FH) Mining Analyst Rockstone Research 8050 Zurich, Switzerland +41-44-5862323 Stephan Bogner studied at the International School of Management (Dortmund, Germany), the European Business School (London) and the University of Queensland (Brisbane, Australia). Under supervision of Prof. Dr. Hans J. Bocker, Stephan completed his diploma thesis (“Gold In A Macroeconomic Context With Special Consideration Of The Price Formation Process”) in 2002. A year later, he marketed and translated into German Ferdinand Lips‘ bestseller („Gold Wars“). After working in Dubai for 5 years, he now lives in Switzerland and is the CEO of Elementum International AG specialized in duty-free storage of gold and silver bullion in a high-security vaulting facility within the St. Gotthard Mountain Massif in central Switzerland. Rockstone is a research house specialized in the analysis and valuation of capital markets and publicly listed companies. The focus is set on exploration, development, and production of resource deposits. Through the publication of general geological basic knowledge, the individual research reports receive a background in order for the reader to be inspired to conduct further due diligence. All research from our house is being made accessible to private and institutional investors free of charge, whereas it is always to be construed as non-binding educational research and is addressed solely to a readership that is knowledgeable about the risks, experienced with stock markets, and acting on one’s own responsibility. For more information and sign-up for free newsletter, please visit:

Pistol Bay acquires high-grade zinc-copper deposits and becomes dominant land holder in the prolific