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Robert Sansfacon is a very respected and successful veteran geologist who has a “nose” for Gold.  He played an instrumental role in the discovery of Osisko’s (OSK, TSX) massive Canadian Malartic deposit and now he’s part of the Visible Gold Mines’ team that BMR believes will catapult this TSX Venture Exchange (VGD, TSX-V) and Frankfurt listed company into a major player in the exciting business of exploration and mining in northwest Quebec, one of the most prolific Gold producing regions of the world.  With Gold at $1,500 an ounce, identifying a company like VGD in the early stages of its development can lead to potential huge returns.  There are risks like with any speculative junior mining stock but VGD has some very special characteristics that in our view greatly enhance its chances for success.

Robert Sansfacon – Visible Gold Mines‘ Senior Geologist

Visible Gold Mines, which has a current market cap of just $17 million with almost half that amount in cash, is focused like a laser beam on four projects (Joutel, Cadillac Break, Silidor and Stadacona-East) covering thousands of hectares of some of the most highly prospective real estate for a potential major Gold discovery that you’ll find anywhere on the planet.  Sansfacon is leading the geological pursuit and we’re confident he’s going to succeed.  He just made an intriguing early-stage drilling discovery at Silidor, as reported by VGD after the close today.  He’s already smelling Gold and Silidor is just the start of it.

I had my boots on the ground for many days in northwestern Quebec recently, searching diligently for the next big “home run” opportunity that BullMarketRun could confidently introduce to its readers.  Last year, of course, we discovered Gold Bullion Development (GBB, TSX-V) when it was trading at just 7 cents.  A major discovery at its Granada Gold Property near Rouyn-Noranda propelled GBB as high as 93 cents in 2010.  At the other end of the country we identified very early on the incredible opportunity in Richfield Ventures (RVC, TSX-V) with its Blackwater Gold Project in central British Columbia.  We introduced that company to our readers just over a year ago when it was trading at $1.20.  Just over two weeks ago New Gold Inc. (NGD, TSX) announced a takeover plan for Richfield valued (April 4) at $10.38 per RVC share or $550 million in NGD stock.

Visible Gold Mines has not yet been discovered by the masses and yes, as I outline in detail below, this aggressive explorer anchored by a powerful management team has the potential to become the next Gold Bullion Development or Richfield Ventures’ success story.

• Well-financed ($8 million in cash)
• Vision, strong leadership and business management skills that few CDNX companies possess
• Talented geological team – lots of ground support to move projects forward quickly
• Large land package with properties of major discovery potential
• Tight share structure
• Aggressive IR strategy
• Attractive chart – record volume for this stock over the last eight months

Visible Gold Mines came out with interesting news today following the market close as the company reported it has drilled into significant mineralization nearly 700 metres southwest of the past producing Silidor Gold Mine on the outskirts of Rouyn-Noranda.  More results are pending and drilling continues in a northeasterly direction toward the former mine. Sansfacon, who honed his skills for many years at Lac Minerals, definitely smells Gold at Silidor.  Only time will tell, of course, if he finds the volume he’s looking for there.  But this project is in the best hands possible and Sansfacon has other irons in the fire as well, namely Joutel, Cadillac Break and Stadacona-East.  We like the odds.  Give a geologist of this caliber four exciting projects and the Law of Averages states he’ll turn one of them into a major success.

VGD TECHNICALS – CHART SHOWS STRATEGIC ENTRY POINT IS RIGHT NOW

We’ll go into more detail on Silidor and VGD’s other major projects shortly.  First, however, let’s examine the “big picture” technical story of Visible Gold Mines.  John, BMR’s chart guru, likes what he sees.  Below is a technical snapshot of the four-year trading history of VGD.  Note the volume surge since September of last year, the support provided by the rising 300 and 500-day moving averages (SMA’s), the unwinding of the RSI and the oversold Stochastics.  The 200-day SMA, not shown here, is rising and at 42 cents.  Simply put, at today’s 36-cent close this is a stock at the low end of a trading range in what appears to be a powerful long-term uptrend. This chart clearly demonstrates the “Golden” potential of Visible Gold Mines.

VGD FUNDAMENTALS – ALL THE RIGHT INGREDIENTS

Now let me explain why Visible Gold Mines has a truly special combination of fundamentals that give this company such a tremendous opportunity to position itself as a major player in one of the greatest Gold producing areas of the world.

• Outstanding Management
  

Visible Gold Mines is one of the few Venture Exchange companies we’ve come across that not only possesses top-notch geological expertise, as outlined above, but two other ingredients that are so critical in terms of being able to maximize shareholder value and create wealth – business savvy and marketing prowess.

I had the pleasure of meeting Martin Dallaire, the President and CEO, on my recent trip to Rouyn-Noranda.  He’s a very successful and well-respected local businessman and entrepreneur.  He earned a degree in engineering from the University of Quebec at Chicoutimi in 1992 and knows the mining industry inside-out.  He’s sharp, determined, organized, focused and fluently bilingual.  He presents extremely well (I attended the VGD AGM) and tells the Visible Gold Mines story in a powerful way.

As soon as you walk into the Visible Gold Mines’ office in Rouyn-Noranda, you get the immediate sense that something is different and special about this company compared to most others on the Venture Exchange – Dallaire means business and has surrounded himself with quality people to achieve his goals.  VGD is no stock promotion – a real company is being built here and one that is growing rapidly – though Dallaire understands how important PR and marketing are to the success of a junior exploration company.  It appears he has all the right people in place to carry out his game plan which is to position Visible Gold Mines as a major player in the northwest Quebec Gold exploration sphere as quickly as possible.  We’re in the Gold bull market of a lifetime and we’re certain Dallaire is going to “seize the moment”.

Dallaire astutely recruited one of the finest geologists in the country in Sansfacon. Simply put, Sansfacon knows how to find Gold and nail down a deposit.  He’s also a major reason why Visible Gold Mines was recently able to cut a deal with Agnico-Eagle Mines (AEM, TSX) on the Joutel Property (more on that below), a past producer that Sansfacon believes has exciting untapped potential.  Sansfacon is supported by a strong team and all the tools he needs on the ground – there is a high level of efficiency and professionalism in this company’s geological work.  The pace is swift.      

• Exceptional Land Package

Visible Gold Mines is focused exclusively on opportunities in northwestern Quebec (mostly in the Rouyn-Noranda region) and has assembled an impressive land package totaling over 20,000 hectares.  Four key projects at the moment are as follows:

1. Joutel Property

Agnico-Eagle likes what it sees in Visible Gold Mines as well.  On March 31, VGD announced a very significant deal with Agnico-Eagle to add to its already impressive land package.  VGD has entered into an option agreement with AEM to acquire a 50% interest in the Joutel Property comprising one lease and 477 claims approximately 150 kilometres north of Rouyn-Noranda.  Joutel’s Eagle and Telbel mines produced over 1 million ounces of Gold at a grade of 6 g/t and some Silver between 1973 and 1993 (Agnico Mines merged with Eagle Mines Ltd. in 1972, allowing for the development of Eagle Mines‘ Joutel mining complex).  Joutel gave birth to Agnico-Eagle which eventually closed the mine prematurely in order to concentrate its efforts on the massive LaRonde Mine.

We believe there are two reasons Agnico-Eagle decided to option Joutel to Visible Gold Mines – Dallaire and Sansfacon, as simple as that.  Chances are, there is considerable remaining Gold at Joutel and significant extensions to the deposits are quite possible as often that’s the case with these situations.  If anyone can unlock the value of this project, it’s Sansfacon.  Visible Gold Mines is not going to waste any time going after a potential major new discovery at Joutel.  Today’s news suggested drilling is not far off.  Success at Joutel in our opinion would also open up the possibility of Agnico-Eagle taking an equity interest in Visible Gold Mines.

2.  Cadillac-Lucky Break Project

Visible Gold Mines optioned 7,400 hectares along the Cadillac Trend, mostly west of Rouyn-Noranda, from Cadillac Mining (CQX, TSX-V) in December of last year.  As announced April 8, drilling is now underway within 800 metres of Vantex Resources‘ (VAX, TSX-V) Moriss Zone discovery at that company’s Galloway Project approximately 30 kilometres west of Rouyn-Noranda.  Given results released to date by Vantex, and after speaking with Visible Gold Mines‘ geologists, there’s a strong possibility that mineralization at Galloway’s “Golden Triangle” extends beyond VAX’s claim boundaries onto ground held by Visible Gold (VGD can acquire a 60% interest in the entire Cadillac-Lucky Break Project from CQX).

Four holes will be drilled near the Moriss discovery (the first one has been completed as announced today) before Visible Gold Mines turns its guns toward Richmont Mines’ (RIC, TSX) Wasamac deposit.  The fact we learned early this month that VGD is drilling so close to the Moriss Zone discovery (Robert McEwen has taken a significant position in Vantex because of Galloway) was interesting enough.  Then the company really raised my eyebrows when it revealed it has some claims to the west of Wasamac (optioned from Cadillac) and will start drilling there as soon as the four holes are completed near the Moriss Zone.

VGD Takes Aim At Wasamac – Connecting The Dots

Watch out for this one – it could be huge.  We’re engaging in speculation here but given Visible Gold Mines’ stated desire to become an “exploration leader” in northwest Quebec, it wouldn’t surprise us if the company attempts to secure as much ground as possible immediately surrounding Wasamac where Richmont is aggressively drilling and recently announced a major expansion in resources (1.4 million ounces in all categories) at this former mine.  Cadillac still holds some very strategic property (the structure hosting Gold mineralization at Wasamac dips northerly toward the four claims held by Cadillac), Globex (GMX, TSX) has claims (see GMX’s March 17 NR) and is selling a lot of its holdings right now, and some land is in other hands as well.

Wasamac is a great story that we’ve been reporting on now for several months.  Richmont’s share price has soared to an all-time high of over $8.00 because of Wasamac.  Given the content and tone of the April 8 news release, it’s possible Visible Gold Mines has plans to strongly enhance its position near this rapidly growing deposit where we believe Richmont will build a plant to serve both Wasamac and its nearby mine (Francoeur) that is slated to go into production within a few months (for now Richmont will have to truck ore from Francoeur to its Camflo Mill near Malartic for processing).

“WE CONTINUE TO INVESTIGATE ADDITIONAL POTENTIAL STRATEGIC LAND PACKAGE ACQUISITIONS” – MARTIN DALLAIRE, ARPIL 8 VGD NEWS RELEASE.

3. Silidor Gold Property

Initial assay results from Silidor came out following the market close today and they are highly significant.  This project is located on the outskirts of Rouyn-Noranda, immediately off the main highway leading out of town.  The property, which we visited during our recent trip to the area, hosts the past producing Silidor Mine which ceased operations in 1997.  VGD acquired the project from Newmont Mining (NMC, TSX) and IAMGOLD (IMG, TSX) last year and made a discovery of high-grade mineralization a considerable distance from the former mine during a field program last year.  The drilling taking place right now is over an area that has never been previously drilled and is progressing in a northeasterly direction toward the former mine. As the saying goes, the best place to find a new mine is near an old mine (there are often extensions to mineralized structures as we’ve seen at Granada and elsewhere).  Early results are highly encouraging as drilling has discovered two new veins nearly 700 metres southwest of the old mine.  Reading between the lines of today’s news release (“the possibility of a series of shoots of gold mineralization is being investigated“), it appears Sansfacon very much likes what he sees and is going after the potential of multiple ore shoots which is sweet music to our ears.  Ore shoots can be very rich in mineralization.

Each of the first 10 holes at Silidor intersected mineralization and Hole #8 is of particular interest as four sections of Gold were hit between depths of 70.85 metres and 130.5 metres including 2.70 metres grading 5.45 g/t Au and 1.5 metres grading 5.70 g/t Au.  Remember, this area has never been drilled before and it’s 700 metres southwest of the former mine.  A total of 23 holes have now been completed (assays pending for 13 of them) and drilling continues.  Sansfacon would not keep the drills turning if he didn’t believe he might be closing in on something.  Things could get extremely interesting in a real hurry at Silidor.

4.   Stadacona-East

Earlier this month Visible Gold Mines announced an initial NR-43-101 resource estimate (163,000 inferred ounces) for its Stadacona- East Gold Property, a vein deposit located along a Larder Lake-Cadillac fault shear zone that could be related to other Gold-bearing shear zones just several hundred metres to the west on the site of the former Stadacona Gold Mine.  One kilometre to the north of Stadacona-East is the famous past producing Horne Mine (59.3 million tonnes grading 5.88 g/t Au, 2.2% Cu, and 13 g/t Ag).

Stadacona-East consists of 78 mining titles and covers a 14-square kilometre area.  The company still has numerous geophysical targets to test at this property and plans further drilling this year, so plenty of exploration upside exists.

• Strong Cash Position, No Debt, Tight Share Structure

Dallaire was busy last year raising money and putting all the pieces of the puzzle together in order to put Visible Gold Mines on a strong growth trajectory beginning in 2011.  The company is currently armed with 17 cents per share in working capital ($8 million) after major financings in the fourth quarter last year that raised $4.8 million and $4.9 million at 32 and 80 cents, respectively.  VGD has just 47.5 million shares outstanding with funds holding over 30% of the stock and management and “friends” controlling another 13%, according to the company’s latest corporate presentation.  Sheldon Inwentash was a buyer of the stock in late February (215,000 shares) at 41 cents, some of that for his self-directed RRSP according to insider trading reports.  The latest financials (January 31) show 3.8 million options outstanding (expiry dates from August, 2012, to November, 2015) at prices ranging from 17 to 62 cents while there are 18 million warrants outstanding (15 million at 45 cents expiring in October this year and 3 million at $1.20 expiring in December, 2012).  Yes, Mineralfields did a financing with this company but to get in on this they paid a premium of 80 cents per share.  Some investors are skittish regarding Mineralfields as they have a tendency to dump stock into the market.  However, we have no concerns regarding their position in VGD especially since their financing was at more than double the current share price.  At some point down the road it wouldn’t surprise us if Mineralfields’ position is taken out by bigger players.  Dallaire is a smart operator, he understands the market and has a lot of connections in financial circles.

• Aggressive Approach Focused On Creating Shareholder Wealth
  

We love Dallaire’s style.  His focus is on building shareholder value and creating shareholder wealth by positioning Visible Gold Mines as a major force in the search for Gold in one of the best jurisdictions in the world, geologically and politically, for mining and exploration.  He’s a successful entrepreneur who’s very motivated to make a huge success out of VGD.  He has surrounded himself with very capable people who will help him immensely in making things happen for this company. 

CONCLUSION

Visible Gold Mines is an overlooked situation on the Cadillac Trend and in northwestern Quebec in general.  There is so much upside potential here and the long-term chart clearly shows the trend direction and strong technical support.

• Well-financed
• Vision, strong leadership and business management from Dallaire
• All-star geological team – lots of ground support to move projects forward quickly
• Large land package with properties of major discovery potential
• A major (Agnico-Eagle) that has partnered with the company
• Attractive share structure
• Aggressive IR strategy
• Immediate and long-term bullish technicals

This is a junior exploration company with clear goals and the determination and ability to succeed.

Word is getting out on this opportunity.  We love to put unique situations like this in front of our readers, especially when they’re trading near major support levels which makes for an attractive risk-reward ratio.  Visible Gold Mines is on track to become our next “home run opportunity”.

p.s.   Visible Gold Mines also trades on the Frankfurt Exchange and recently hired respected IR firm Axino AG to increase exposure of VGD in the European investment community.

The writer (Jon) holds a position in Visible Gold Mines.  The stocks we cover are highly speculative and should be considered by experienced investors only who understand the risks involved.  The information above must not be construed as a “buy” recommendation.  As always, perform your own due diligence and please read our disclaimer.