Tombill Hits but Gets no Respect
I’m seeing a lot of sentiment indicators that are giving signals of a near bottom. The Gold Miners Bullish Percent Index has hit a new yearly low of 20, the lowest value since the plunge in March of 2020. The DSI for gold and silver hit 10 and 10 on September 16th and currently is at 13 for gold and 12 for silver. I’m ok with that suggesting we are near the low for the metals for now.
I wrote about Tombill (TBLL-V) first about three months ago. The company got caught up in the massive correction and has shed 50% of its value since then. Back then you could buy gold for $4-$8 an ounce so naturally today you can buy gold at $2-$4 an ounce.
The Tombill Main Group is adjacent to the eleven and a half million ounces of gold at the Hardrock deposit owned by a joint venture between Centerra and Premier. That JV is spending $1.25 billion to construct an open pit mine with a 14.5 year mine life to produce 4.2 million ounces of gold or about 290,000 ounces a year. The most western hole of the Hardrock deposit is right on the border with the Tombill Main Group and showed a value of 18.49 g/t gold over 20.5 meters. What both companies call the F-Zone runs from Hardrock right through the Tombill Main Group.
Tombill intends to drill the Tombill Main Group down the entire 2.5 km length of the strike. Naturally they began at the eastern border of the Bankfield-Tombill fault where it joins the Hardrock deposit. The early results from the drill program demonstrate that the mineralized F-Zone structure does continue onto the Main Group ground and it gently dips at an 11-12% angle. While the drill holes on the eastern side of the property are near surface, deeper drilling will be required to the west.
Currently the company is in the midst of a 16,000 meter fifteen hole drill program. While early drilling has been technically difficult results released so far indicate the F-Zone does continue to the west. In June the company announced a hole with 6.23 g/t gold over 13.1 meters. Lately they announced an F-Zone intercept of 5.29 g/t gold over 8 meters and 8.15 g/t gold over 4.1 meters and a new discovery of what they are calling the F2-Zone with 13.88 g/t Au over 2 meters and 9.17 g/t Au over 3 meters.
The Phase 2 drill program is planned for 69,000 meters in sixty three holes. The company’s near surface studies cover a total of fourteen different zones. There will be a surface drill program for eight holes of 300 meters each.
For now the company is fine for cash reporting about $7 million in the till at the end of March. There are about 39 million warrants at $.24 which would bring in another almost $10 million in cash if the stock can recover.
The stock has gone from $.29 in June to a new yearly low of $.09 on Friday last before recovering to $.125. With an obvious potential for several million ounces of gold with even modest success in drilling, a market cap today of $20 million seems pretty absurd. The project is in an important mining camp with a cluster of prior and planned mines.
I liked the company enough to buy shares in the open market when it was around $.20 and I have averaged down lately. Tombill is an advertiser, I own shares and I think they have a bright future. Do your own due diligence.
Tombill Mines Ltd