North of 60 Mining News - The mining newspaper for Alaska and Canada's North

TerraX Minerals Inc. is on a mission - outline a multimillion-ounce resource along the many high-grade gold zones located at its Yellowknife City Gold Project, which is located about 15 kilometers (nine miles) north of the capital of Northwest Territories.

A C$3.5 million cash infusion by Osisko Gold Royalties Ltd. along with nearly C$2.7 million raised separately is helping the explorer to reach its goal.

"TerraX has always been committed to putting our dollars into the ground where they have the best chance of returning value to our investors," said TerraX President and CEO Joe Campbell. "Now, in the midst of historically difficult capital markets for junior mining companies, TerraX has more exploration funding available than at any time in the history of the company."

Lying "in the shadow of the head frame" of the historic Con and Giant mines, which produced a combined 14.2 million ounces of gold, the company's 99.3-square-kilometer (38.3 square miles) Yellowknife property blankets a region known for yielding deposits of a scale that the exploration company is seeking.

Drilling the core

In its quest to outline enough gold to consider developing a third major gold mine in the Yellowknife camp, TerraX kicked off a 6,800-meter winter drill program in January.

This drilling focused on a 15-square-kilometer (six square miles) "core gold area" that includes the Barney Shear, an extension of the shear system that hosts the Con and Giant mines, and Crestaurum, a high-grade gold zone that has been drilled extensively by TerraX and previous explorers.

In the 1980s, Giant Mines Ltd. considered mining Crestaurum, drilling 187 holes along 1,200 meters of a shear that has been traced along surface for some 4,000 meters.

Two holes drilled by Giant in 1985 cut five meters averaging 12.42 grams per metric ton gold and five meters of 8.03 g/t gold; and one hole drilled by TerraX in 2014 cut 3.07 meters of 13.84 g/t gold.

TerraX confirmed the continuity and expanded the Crestaurum deposit with 28 holes drilled during its winter 2015 program.

The first six holes of this drilling tested the South Shoot of Crestaurum. Hole TCR15-003, the southwestern-most of these holes, cut seven meters averaging 10.23 g/t gold, including 2.97 meters averaging 23.69 g/t gold. TCR15-003, drilled about 100 meters north, cut 15.5 meters averaging 2.89 g/t gold.

"We are … encouraged by the confirmation of the continuity in the mineralized structure as well as the extension of the plunge and dip on the high-grade mineralized portions of the South Shoot evidenced by this drilling," said Campbell.

Similar grades continued as drills continued to the northeast. Highlights include: eight meters averaging 6.83 g/t gold in hole TCR15-005; 15.5 meters averaging 2.89 g/t gold in hole TCR15-006; five meters averaging 5.29 g/t gold in hole TCR15-019; and 8.86 meters averaging 2.86 g/t gold in hole TCR15-025.

The winter drill program also included 11 holes testing the southern end of the Barney zone, a shear system located roughly 1,000 meters northeast of Crestaurum. TerraX said all of these holes hit the mineralized shear where expected. Highlights include: 14.09 meters grading 2.96 g/t gold in hole TBY15-005; and 15 meters 1.59 g/t gold in hole TBY15-003.

New discoveries

In June, Osisko paid TerraX C$1 million for an option to purchase a one percent net smelter return royalty on the Yellowknife City Gold Project. To exercise this option, the royalty company would pay TerraX an additional C$2 million within three months following the start of production of any mine that is developed on the Yellowknife property. This is on top of a previous option to acquire a two percent NSR on any future gold mined from the property.

In addition to reserving the option to buy future Yellowknife royalties, Osisko invested C$2.5 million to buy 6.25 million TerraX flow-through shares in a private placement that closed in June.

"This funding, along with our technical partnership with Osisko, gives TerraX the financial means to effectively explore the world-class potential of the Yellowknife City Gold project," said Campbell.

Though the company had plenty of funds, much of its summer program at Yellowknife focused on prospecting, mapping and sampling aimed at discovering new high-quality gold targets for a C$4 million drill program planned for the winter of 2016.

High-grade gold at the Herbert-Brent showing, located about 1,000 meters south of the Barney zone, was among the most exciting discoveries made during the summer program.

An 11-meter segment of a channel cut across the strike of the Herbert-Brent zone averaged 7.55 g/t gold.

Some 75 meters to the south, a second channel cut across the zone returned six meters averaging 10.26 g/t gold.

Another trench dug across the strike of Herbert-Brent and about 45 meters to the east of the first trench cut 15.3 meters averaging 2.23 g/t gold.

"These high-grade sampling results give added confirmation of the gold endowment in the recently discovered Hebert-Brent Shear area," said Campbell. "Despite 75 years of exploration on the YCG property, this outstanding area of gold mineralization went undiscovered, with no previous surface workings or drilling prior to TerraX's work in 2014 and 2015."

Excited about the discovery, TerraX launched a program of extensive stripping and channel sampling in preparation for the first-ever drilling at the Hebert-Brent Shear.

The prospecting has identified another nine targets with similar mineralization and alteration as Hebert-Brent. These nearby targets include Brent, where a grab sample returned 44 g/t gold, and Alpha, where a composite sample grading 28 g/t gold was collected.

TerraX dug channel samples to get a better look at these new prospects. Assays were pending at the time of this report.

The continued discovery of new zones of high-grade gold has bolstered the company's confidence that exploring "in the shadow of the head frame" of the historic Con and Giant mines was a good move for TerraX and its shareholders.

"This exploration success is a strong endorsement of our corporate strategy to acquire property and explore within an established major Canadian Gold camp," said Campbell.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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