Maple Gold chief executive Kiran Patankar continues to announce changes that will turn the company around and enable it to grow and thrive amid difficult market conditions for junior gold explorers.

Having re-established a science-based exploration approach and slashed the company's G&A  spend, his latest coup is the restructuring of a strategic relationship with the gold industry's second-largest company Agnico Eagle Mines, which, in his own words, "is a proper deal structure that unlocks my ability to talk about fundamental value," he told Mining Journal.

The consolidation of the Douay and Joutel gold project joint venture in Québec, Canada, in June saw Maple take 100% ownership in return for granting Agnico a 1% net smelter return royalty. Agnico also has a back-in right to acquire a 50% ownership interest if Maple decides to develop a mine with a C$300 million net present value. Agnico also increased its ownership in Maple to 19.9%, being the back-end buyer for a C$4 million flow-through private placement.

"Having Agnico as a JV partner was one of our best assets. However, JV partnerships work well when the partners are equal-sized companies. We were David and Goliath, and so their priorities are naturally going to diverge from ours when it comes to capital," said Patankar.

Agnico's back-in right to obtain a 50% ownership interest if Maple decides to develop a mine, would see it make a cash payment equal to 200% of specified project expenditures and an additional C$12 million for a project with a C$300 million net present value, as expressed in a prefeasibility or feasibility study. "Agnico wanted the back-in tied to a construction decision and pre-financing. We cannot go to providers of project fin without knowing if Agnico will come in for 50% or whether it would be Maple alone," said Patankar.

Agnico has C$6 million left to spend on exploration under the initial JV, which would have left Maple facing the prospect of co-funding future work from February 2025 onwards.

"Having them spend the $6 million left on their JV earn-in spend would have been quick and easy to do, but it would not necessarily have been the best result as our market capitalisations are so divergent. If they had wanted to do a $20 million programme we would have to have gone to market to raise about half our market cap," said Patankar.

Conversely, if the JV had fallen down Agnico's list of priorities, the project's progress may have stagnated. This, as it happens, is prescient given Agnico's recently announced focus on expanding its Detour Lake operation in Ontario to increase production towards 1Mozpa over the coming years.

The restructure means Maple can control the rate at which it continues to invest in exploration and the dilution it takes to do so, determining where it will get the best bang for its exploration buck and control its destiny doing so while also keeping Agncio's interest alive.

"It is a win-win. We removed the near-term dilution risk, we got the benefit of the project they contributed to the JV, we recaptured the 50% of Douay we gave up to get the JV, we got $12 million spent in the ground under the JV, and gave a 1% NSR and a backend right, the first Agnico has ever done," said Patankar.

Exploration

Douay/Joutel has a gold resource of 3Moz of which about 75% is inferred resources. Maple is planning a C$5.6 million exploration programme for the second semester using the $4 million flowthrough financing, which is boosted to $5.6 million with additional tax breaks for exploration north of the 49th parallel in Quebec. While details are being finalised, 25% could be near the existing Douay resource, 25% on pure exploration and 50% on discovery drilling along the 6km of strike length.

"There are two zones with potential at Douay West and the 531 zone, which are on opposite ends of the 6km of strike length. Douay West has the majority of the indicated resources with 500,000oz at double the average deposit grade and higher drill density. The 531 zone has one of best drill intercepts with indications that the high-grade zone can continue to depth," said Patankar.

Exploration is an area where Patankar has placed a systematic data-driven approach, with the aim of increasing the chance of success while being most cost-effective. "The previous team went off grade and assay data for drill targeting. That is not the way to unlock a complex geological system. Science has to drive where you are going. Drilling blind with no vectors makes no sense," he said.

Ultimately, Patanker has a goal of expanding the Douay resource to 5Moz. "We won't achieve that with the next drilling campaign. We need to demonstrate that the empirical approach has a proof of concept to it. The 5Moz figure is a roadmap for where we want to get to. The original thesis of Agncio's Investment is that there is much more gold to find here. They believe the potential is still there. There has been a failure of Maple to execute in the past," he said.

Patanker has also restructured the investor relations approach, which has helped reduce G&A spending from $6 million in 2022 to about $2 million this year.

"I take my fiduciary responsibility very seriously. It is a capital-constrained environment for junior companies, so I think like an investor. It is shareholder money, so it should be spent on the ground. I fly economy and don't design marketing trips that don't generate a return on investment. We don't have a head of investor relations. It is about doing more with less," he said.