Times are becoming pretty challenging around the world, as inflation gears up to levels not seen in 40 years, as supply chains across the entire economy are increasingly being disrupted through the Russia-Ukraine invasion and COVID-19-related lack of investments, while at the same time demand is recovering after COVID-19.
Although interest rates are going up, with the stock markets going down as a consequence, gold is still holding around $1850/oz, creating sound fundamentals for the main metal Gold Terra Resource Corp. (YGT:TSX.V; YGTFF:OTC; TXO:FRANKFURT) is after. After completing their small winter drill program (6,011 meters [6,011m]) at Mispickel, the company continues to drill their 30,000m program with two rigs at their Yellorex/ Campbell Shear target, part of the Yellowknife City Gold Project, and solid results are released on a regular basis.
Looking in hindsight it seemed extremely lucky timing by CEO Gerald Panneton, when right before the Russia invasion and inflation running wild, Gold Terra raised CA$5.6 million at the end of February, with proceeds being sufficient for completing 30,000m of drilling at both the Campbell Shear and Mispickel targets.
CEO Panneton is aiming big at drilling no less than 40,000m this year, so an additional raise would be necessary to fund that extra 10,000m, probably somewhere in Q4. The drilling at the Campbell Shear is well underway for quite a while now with two rigs aiming for about 35,000m this year, and regarding Mispickel, the company recently completed a small 19-hole, 6,011m winter drill program with another two drill rigs.
As a reminder, this last program was intended to be 4,000m, and only if successful it would be expanded. Mispickel appears to be quite an interesting satellite high-grade deposit in the making for the 1.2Moz Crestaurum/Sam Otto resource. After five holes with several high-grade intercepts near surface were already reported since March, the most recently announced results continue to impress. On June 7, 2022, Gold Terra reported three more holes with significant results, highlighted below:
- GTWL22-014- intersected 3 meters at 31.89 grams per tonne gold (3m at 31.89 g/t Au) from 43m including 1m at 69.4 g/t Au;
- GTWL22-004 - intersected 3m at 7.63 g/t Au from 56m including a visible gold-bearing vein which returned 1m at 22.5 g/t Au;
- GTWL22-008 - intersected 6m at 4.17 g/t Au from 78m including 1m at 11.35 g/t Au, and including 1m at 11.8 g/t Au.
Gold Terra Pleased With Results
Again the gold mineralization is located relatively close to the surface, which bodes well for economics. CEO Panneton was pleased with the results:
"These high-grade drill results indicate that the MP-Ryan Zone is developing into a new high-grade gold zone approximately 100 to 150m west of the main Mispickel area. This additional high-grade gold zone is a great indication of a larger system than previously thought in this area and opens up the whole area for other significant high-grade discoveries. The Mispickel area will be part of our updated NI 43-101 resource scheduled to be announced in Q4 of this year. The Mispickel area is situated 20 kilometers north of Yellowknife and complements our flagship Con Mine Property where we are currently drilling at depth along the Campbell Shear south of the Con."
And the location of the latest three holes can be seen on this map in purple:
Previously reported holes are 003, 005, 006, 007 with lower grades and located much deeper (mineralization starting below 100m up to 311m depth, intercepts were 5m at 1g/t Au and 5m at 1.34g/t, 2m at 3.86g/t Au, 1m at 2.1g/t Au and 1m at 2.4g/t Au, and 7m at 3.59g/t Au and 4m at 1.65g/t Au). Interestingly, the first reported hole 002 was much better as the result showed 4m at 19g/t Au incl. 1m at 73.9g/t from 20m depth.
Ten of the 19 drilled holes showed visible gold, and eight holes are reported now, all those containing visible gold. Although visible gold usually indicates grades of over 20g/t, it is very well possible that the visible gold in holes 003, 005, 006, and 007 was located in the cut-in-half part of the core that wasn’t sent to the lab, but that is standard QA/QC procedures.
CEO Panneton commented, “Although the assay results are lower than expected in some holes with the presence of visible gold, it is more important to intersect the zone and to keep drilling as we know, this is typical gold behavior.”
Hole 005 Very Successful
It appears there is a mineralized zone present with a strike length of about 500m. According to Panneton, mineralization is found in structures of multiple, vertically oriented quartz veins. The high-grade intercepts (002, 004, 008, and 014) so far confirmed the high-grade nature, and the presences of the zones, which means more drilling will be required next winter to follow up and determined the size of the quartz vein structures. A bit puzzling to me is hole 005, which didn’t hit anything special, but which appears to be collared on strike with 002 but about 100m to the south. Is this because of fault lines, the ending of the vein in 002, or extreme pinching and swelling of quartz veins? According to CEO Panneton, hole 005 was very successful, as with other holes, it does intersect the zone similar to hole 002.
In order to have a slightly better understanding of this zone, let’s have a look at cross-sections of holes 004, 008, and 014:
In addition, here is a cross-section of hole 007 (more to the north), and 002 with 014:
It can be seen that the high-grade mineralization in 002 doesn’t reappear in 014 at depth with mineralization assumed to be vertical, although there is a good bit of distance between these holes. Although the grades of for example 007 and 009 aren’t always impressive, keep in mind these results are well within typical open pit boundaries (200m depth), and it appears from the sections there is an abundance of 0.1-1g/t veins, forming a low-grade halo surrounding the higher grade veins. This could convert Mispickel into an open pit satellite as part of the intended Sam/Otto mine plan. As I’m always curious about mineralized potential, a very global back-of-the-envelope estimate is something I do as soon as there is some size and tonnage to calculate with. In this case, eight results are barely enough but I’ll give it a try anyway.
For now, (100m) between 014 and 008 as a continuous vertical vein, as is the distance (50m)between 002 and 004. I can only guesstimate the vertical extent of these veins, but say they are 100m deep and on average 2m thick and 15g/t Au. This would result in two slabs of 100x100x2m and 100x50x2m, which is 30,000m3 which is 82.5 kilotons (82.5kt) at a density of 2.75t/m3. At an average estimated grade of 15g/t, the estimated mineralization could be 1.2M/31.1=40koz Au. This is just the high-grade portion. The low-grade halo, if consistent, could be an envelope of 500x200x150m, which in turn would be 41Mt. At an average guesstimated grade of 0.4g/t, this would be 530 thousand ounces gold (530koz Au).
The total average grade would not exceed 0.5g/t which isn’t economic at current gold prices (I estimate an overall average grade of 0.8g/t Au is needed for this at gold $1800/oz), so Gold Terra needs to delineate more high grade if they want to add substantial tonnage and ditto economic ounces. As it is still early days, I certainly don’t rule this out yet.
CEO Panneton Realistic Yet Optimistic
Another option would be to go just for the high-grade “core,” which of course wouldn’t have the same potential for ounces, potentially more in the range of 50-100koz Au in my view as the strike length is still limited.
CEO Panneton had this to add about this, and what he thinks are realistic goals regarding Mispickel mineralization: “The Mispickel area needs more drilling next winter to better assess the size of each zone, what is very important is we have multiple VG intersects over a strike length of 450m and a corridor that is at least 200m wide, in essence, we are just starting to understand the Mispickel area, and we simply need more drilling.
The main drill program is of course targeting the Campbell Shear. The two rigs at the Campbell Shear target are drilling south of the former high-grade Con Mine, with one big drill rig targeting the Campbell Shear at a depth of approximately 1000 meters below surface and at a 200-meter spacing. A second drill rig is allocated to test the Campbell shear, north of the Yellorex zone which was not part of the agreement with Newmont (September 2020).
Several results of Yellorex itself have been reported as well, with some of the best intercepts (GTCM21-027/028/030) reported in the April 6, 2022 news release, highlighted by 26.5m at 6.4g/t Au hit by hole 030. The result of hole 040 which was announced on May 17 was also impressive, as this hole returned two strong intercepts: 11m at 8g/t Au and 4m at 14.4g/t. The first deep hole GTCM22-029 was aimed at the aforementioned deep Campbell Shear target, and the result will probably be part of a batch of other deep holes. As a reminder, the first 50m of the hole which hit the nearby Con Shear were assayed in March, the result was nice with 4.55m at 3.61g/t Au from 37m (including 0.75m at 15.75g/t Au), the drill targeting 1000m depth at the time.
The drill collar location of 040 can be seen here (hole 031, unfortunately, hit just 1m at 1.36g/t Au, so apparently this hole hit the outer limits of the Yellorex envelope):
Seeing holes 030 and 040 hitting such high-grade mineralization was in line with expectations, as both were aimed at filling in the “purple zone” of the visualized 3D May version of the envelope of Yellorex:
When doing a quick guesstimate on the Yellorex envelope, one could arrive at a 600x200x10mx2.75t/m3 = 3.3Mt. If an average grade of 6g/t would be assumed, 637koz Au would be the guesstimated result for now, which would be an excellent start when building the Campbell Shear resource.
As can be concluded, the mineralized envelope has grown the most between March and April, as the envelope from May is almost the same as April (below left), which was significantly larger than March (below right):
The plan is to follow the mineralization at the Campbell Shear down plunge, and over the next 24 months, the strategy is to increase the current extent of drilling mainly south of the original Con Mine below depths of 1,000 meters. As a reminder, see the long section below, representing the Con Mine, Yellorex, and exploration targets, with the black star indicating the first drill target at depth (hole 029), the red ones following up on this:
Management is intending to drill up to about 40,000m this year, with the objective of delineating at least a 1.0Moz high-grade gold resource at the Campbell Shear at the end of 2022, and eventually a minimum of 1.5Moz high-grade gold the year after, south of the Con Mine.
Also keep in mind that there is a historic resource remaining at the Con Mine of 651koz at 10.2g/t Au located below 1000m depth, and according to Panneton there could be about 1 Moz Au down there. As this will take a number of very deep holes from surface to convert this to NI43-101 compliance, this will be a goal for the foreseeable future, probably after the targets for the Campbell Shear are achieved.
You don’t see too many explorers treating an already economic 1.2Moz Au resource as a starting point for a multi-faceted drill program, targeting different mineralized zones, each with different potential. I am not sure about the significance of the Mispickel target yet as it is still early days, but the Yellorex envelope appears to be morphing into a robust resource, guesstimated by me as over 600koz at 6g/t Au. And no drill results have been announced yet about any deep targets at or below 1,000m at the Campbell Shear, which might contain the big prize here, analogous to the nearby former Con Mine that produced 5Moz from that same shear. CEO Panneton is chasing success here, looking to complete over 30,000m of drilling at the Campbell Shear alone this year.
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.
The author is not a registered investment advisor, and currently has a long position in this stock. Gold Terra Resource is a sponsoring company. All facts are to be checked by the reader. For more information go to www.goldterracorp.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Please note: the views, opinions, estimates, forecasts or predictions regarding Gold Terra’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of Gold Terra or Gold Terra’s management. Gold Terra has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.
The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high-quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.
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