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KENORLAND MINERALS LTD. (KLD.V)

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Company description

Kenorland Minerals Ltd. (TSXV:KLD) is a mineral exploration company based in Vancouver, British Columbia, Canada. Kenorland’s focus is early to advanced stage exploration in North America. The company currently holds three projects where work is being completed under an earn-in agreement from third parties. The Frotet and Chicobi Projects, which are both located in Quebec, Canada, are optioned to Sumitomo Metal Mining Canada Ltd., and the Chebistuan Project, also located in Quebec, is optioned to Newmont Mining. All three projects are part of prolific Greenstone belts in Quebec. The company also owns 100% of the advanced stage Tanacross porphyry Cu-Au project as well as an option to earn up to 70% from Newmont Corporation on the Healy Project, both located in Alaska, USA.

The company is co-founded and led by President and CEO Zach Flood, who is considered by many a next generation mining prodigy. He was trained for many years at the Ivanhoe Group, and finetuned his geologist crafts under the guidance of legends like David Broughton, and entrepreneurial thinking in mining by the likes of Robert Friedland. Together with President Francis MacDonald, who has a similar background, he developed an ingenious method to explore large, grass roots land packages in Greenstone belts, covered by glacial till, for gold.

The flagship Frotet project is located adjacent the Troilus deposit (7Moz Au Ind and Inf), owned by Troilus Gold. The two staged earn-in agreement allows Sumitomo to earn 65% by funding C$4.3 million in expenditures over an initial three years. Sumitomo has currently exercised this initial option, and has the option to earn an additional 15% (80% total) by funding another C$4 million over the following year. Once a joint venture is formed, pro rata funding begins and any party diluted below a 10% interest will convert their interest to a 2% uncapped net smelter royalty.

Frotet drilling  by Kenorland returned lots of solid results for their Regnault target, highlighted by for example 29m @ 8.47g/t Au, 4.9m @9.6g/t Au, , 15.4m @ 17.96g/t Au, 3.85m @ 44.95 g/t Au and 6.65m @ 19.5 g/t Au. Regnault was a greenfields target, and was a completely blind discovery. The company has Sumitomo as a partner, and they decided to keep funding the project. My estimates peg the mineralized potential at about 1Moz Au at the moment (summer 2022).

The formerly fully owned Tanacross project in Alaska is a project formerly explored in 2018-2019 by Freeport McMoRan and others. These parties drilled results like 239m @ 0.30%Cu and 0.23g/t Au, and 276m @0.23%Cu and 0.16g/t Au. It is a district scale collection of alteration footprints, covering porphyry centers, analogues to very large low grade deposits like Pebble and Casino. After completing reconnaissance exploration (mapping, geochemistry, geophysics), the company decided to option it out to Antofagasta in 2022.

Kenorland’s other Alaska project is the Healy project, which it is earning into from Newmont Corporation. This project is also of considerable scale, has seen extensive soil sampling and 10 holes of near surface RC drilling, with a highlight of 49.4m @ 0.42g/t Au. The intersected mineralization is characterized by broadly disseminated gold in bedrock. Management has planned a 4,000m diamond drill program for 2021.

Their cash position (August 2022) stands at C$6M, and expects to receive about C$1M in management fees from the JVs in 2022. Preliminary partner funded exploration is budgeted at C$20M for 2022, exploration funded by Kenorland for its own projects is budgeted at C$3M. Management and insiders hold 49% of outstanding shares, so there is considerable skin in the game. 79% of shares is tightly held between management, insiders, institutionals and a few HNWs.

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