Explorers tout first gold, new finds
Promising projects emerge as three active juniors with other miners as major shareholders hit paydirt with 2019 exploration
Last updated 1/30/2020 at 1:34pm
After being stalled for decades, hardrock gold mine development in Yukon Territory appears to be picking up speed, as one company rockets toward full mine production by mid-2020, while at least two others report exciting new discoveries.
The Yukon, legendary for producing millions of ounces of gold dating back nearly 125 years, is still one of the best places on Earth to find the precious metal. Yet few modern gold projects have managed to overcome the constraints imposed by capital, regulatory, political and market restrictions to achieve production, despite ongoing explorer and investor interest over the years.
A recent example is the Coffee project in Yukon's White Gold District. Two years ago, Coffee's estimated 4 million-plus ounces of gold resources appeared well-advanced toward mine development, with production anticipated in late 2019. Purchased for $530 million by Goldcorp from Kaminak Gold Corp., Coffee appeared to be moving along a smooth path to production.
However, the major had shifted the Coffee project from definitive feasibility status to prefeasibility "as we take a step back to perform further exploration, confirm the resource, advance permitting activities and improve our understanding of the asset," Newmont Goldcorp President and CEO Tom Palmer told investors in April 2019.
Meanwhile, Victoria Gold Corp., White Gold Corp. and Banyan Gold Corp. have advanced in a few busy years to the forefront of Yukon's gold mining scene, reporting substantive progress in recent weeks on projects in different stages of development. While the juniors' ongoing activities range from early stage exploration to starting up a gold mine, all three companies share one important distinction – other mining companies believe in their projects enough to become major shareholders.
Kinross Gold Corp, for example, owns a substantial stake in Victoria Gold, while White Gold has attracted Agnico Eagle Mines Ltd. and Kinross as major investors, and Banyan Gold counts Victoria and silver-focused Alexco Resource Corp. among its major shareholders.
First gold, new prospects
After completing construction of the Eagle Gold Mine in 2019, Victoria poured first gold from the heap leach operation Sept. 17, becoming the newest gold producer in Canada and the largest-ever gold mine in the Yukon. Situated on the 555-square-kilometer (214 square miles) Dublin Gulch property some 55 kilometers (34 miles) from Mayo, Yukon and 375 kilometers (233 miles) north of Whitehorse, the mine is producing gold and anticipates reaching commercial production in the second quarter of 2020.
By late November, the company had stacked more than 2 million metric tons of ore onto the mine's heap leach pad and had stockpiled another 200,000 metric tons of ore to be added to the heap leach pad by year's end. Ore leaching activities started in August and carbon-loaded with gold is being stripped twice weekly in the gold recovery plant.
Victoria reported production Nov. 25 of roughly 13,000 oz of doré containing 75-85 percent gold and 7-18 percent silver, or 10,400 oz of gold and 1,600 oz of silver. Sales of the precious metals, based on current production and gold prices averaging US$1,480 per ounce (more than C$1,950/oz), resulted in cash inflows exceeding cash operating costs and sustaining capital.
"The Eagle Gold Mine is enjoying continual and consistent ramp-up of operations. Important objectives recently realized include construction completion, pouring gold and positive cashflow," said Victoria President and CEO John McConnell.
At current gold prices and total sustaining costs of roughly $750/oz, McConnell said he expects the company to be a $100 million-a-year operation when it ramps up to full production.
Victoria, meanwhile, filed an updated technical report in early December that reflects a 500,000-oz increase in the Eagle mine's reserves to 3.3 million oz and a 20,000-oz boost to annual gold production
Victoria also explored other prospects at Dublin Gulch last year and reported results in December from extensive surface trenching on the Raven target of the Nugget Zone located east of the Eagle mine on the property's 13-kilometer- (eight miles) long Potato Hills Trend.
Nugget Zone is the second-largest Cretaceous granodiorite intrusive body identified at Dublin Gulch, consisting of a 2,200- by 1,200-meter area of mineralization akin to the geology of the Eagle deposit. It has seen limited historic exploration due to the area's inaccessibility.
Victoria completed a surface trenching program at Nugget in 2019, following up on its 2018 discovery of the Raven target.
Highlights of the trenching at Raven include 7.91 grams per metric tons gold over 12 meters in TR-19-15; 6.64 g/t gold over 10 meters in TR-19-15; and 1.12 g/t gold over 60 meters in TR-19-07.
"Raven is located along a large intrusive body, second only (in size) to the Dublin Gulch Stock, which hosts the Eagle Gold Mine," McConnell said. "Given our extensive knowledge of the surface expression and local geology, we are excited to watch this target grow considerably in size."
In all, Victoria took samples from 37 surface trenches covering more than 5,402 meters at Nugget, with more than 3,300 meters focused on Raven and the remainder targeting areas southeast and northwest of the Nugget zone.
Drill targets deliver
White Gold continued its impressive streak of gold discoveries in 2019 across the properties it owns in Yukon's White Gold district. The junior is the largest claims holder in the district, holding 40 percent of all mining claims in the region.
In late November, White Gold reported discovery of high-grade gold in first-ever drilling on the Titan target at the Hen property, intercepting 72.81 g/t gold over 6.09 meters from 10.67 meters depth, including 136.36 g/t gold over 3.05 meters, within a 32-meter-long zone of mineralization. Titan remains open in all directions.
The Hen property hosts a 650-meter by 650-meter gold-in-soil anomaly and multiple other prospective targets that show similar geophysical characteristics. Grab samples also collected on Titan assayed 605 g/t gold, 497 g/t gold, and 113 g/t gold with fine-grained visible gold observed, while soil samples yielded up to 113 g/t gold, the highest grade ever detected in the company's entire database of 400,000+ soil samples. The Hen property is contiguous to the JP Ross property and located about 15 kilometers (9.3 miles) northwest of the Vertigo discovery and about 25 kilometers (16 miles) northeast of the Golden Saddle and Arc deposits on the company's flagship White Gold Property.
Encouraged by its prospecting results, White Gold plans to undertake more comprehensive exploration of the Titan target in 2020.
On the JP Ross property, at least 10 gold targets have been identified over a 250 square-kilometer area, with follow-up diamond drilling at Vertigo that encountered intersections, ranging from 2.31 g/t gold over 16.76 meters from 30.48 meters depth to 5.45 g/t gold over 4.57 meters from 13.72 meters depth, including 12.95 g/t gold over 1.52 meters.
The drill results further extended and validated multiple recognized gold trends over a 15-kilometer- (9.3 miles) by 15-kilometer (9.3 miles) area that includes the Vertigo, Stage Fright, Sabotage, Frenzy and Lifeboat targets and additional emerging targets on underexplored portions of the property.
White Gold also confirmed continuity of high-grade and near-surface gold mineralization at JP Ross' Vertigo target and noted that all Vertigo diamond drill holes completed in 2019 intersected gold mineralization.
Banyan reported a new gold discovery in September in the Powerline zone located 1,000 meters south of its previous discovery in the Airstrip zone at Aurex-McQuesten, one of two projects that the junior is advancing in Yukon.
Aurex-McQuesten is a 9,230-hectare (22,807 acres) group of claims adjacent to Alexco Resource Corp's Keno Hill silver project in the Keno Hills Silver District about 40 kilometers (25 miles) northeast of Victoria's Eagle Gold Mine.
In the first four drill holes of its eight-hole 2019 exploration program at Aurex-McQuesten, Banyan targeted an undrilled area at Powerline and discovered consistent, long intervals of about 0.5 g/t gold from surface punctuated by higher-grade intervals, ranging from 1.24 g/t gold over 4.2 meters from 49.6 meters depth to 48.1 g/t gold over 0.4 meters from 71.6 meters.
"The 2019 exploration program has positioned Banyan to begin to unlock the value of the large Aurex-McQuesten land package," said Banyan Gold President and CEO Tara Christie.
The results also expanded the known strike length of the Airstrip zone mineralization to about 900 meters; 150 meters west and over 250 meters to the east, with more drill results pending.
Importantly, the new discovery at Powerline also led to a second phase of drilling, which highlighted additional gold mineralization at Aurex-McQuesten.