A Tectonic shift for gold exploration
New company putting the art of business in mining explorers Mining Explorers 2019 – Published Nov. 1, 2019
Last updated 6/22/2020 at 11:08am
Emerging on Alaska's exploration scene in 2018, Tectonic Metals Inc. is a new junior mining company that applies a business-first strategy to managing the risks inherent to advancing grassroots gold discoveries to a multi-million-ounce gold reserve that global mining companies want to buy and the local people want to see developed into a mine.
"Junior mining is 99 percent risk, the failure rate is huge, yet nobody has any protocols in place for managing the risks," Tectonic Metals President and CEO Tony Reda told Mining News. "Within an industry that is so inherently risky, you would think that managing risks would be a primary objective."
For the Tectonic Metals management team, this risk management begins before a project is brought into their portfolio.
While the property selection process begins with evaluating the potential for a gold deposit with the size and grade that would attract the attention of global mining companies, the due diligence centers on answering one simple question: If this prospect turns out to be the large gold deposit, can it be developed into an economically viable mine?
"We start looking at things from the end and start reverse engineering it," Reda said.
This mine-first assessment measures the geological potential against proximity to infrastructure; potential geometry and depth of the deposit, and how does that relate to the mining techniques and costs; and does the metallurgy allow for decent recovery of the metals at a reasonable price?
The one facet that rises above them all, however, can this project earn the social license needed to be developed into a gold mine?
It was this strategy to de-risk a project as much as possible from the start that landed Tectonic Metals in Alaska.
A good start to risk management is having a team that knows every facet of the mineral exploration business, from identifying promising prospects to brokering deals with some of the biggest names in mining.
Comprised largely of former executives of Kaminak Gold Corp. – the team that advanced the Coffee Gold project in the Yukon from a grassroots discovery to a roughly 5-million-ounce gold asset now being taken toward mine development by Newmont Goldcorp – Tectonic Metals has such an ensemble.
President and CEO Reda is not a renowned geologist, a common path to top executive positions of today's junior exploration companies. Instead, the Tectonic co-founder was first exposed to the industry as an investor looking to reap high rewards from the exciting but inherently risky business of exploring for new sources of metals to meet the world's insatiable need.
Like most of his peers, Reda made money on some mining investments and lost on others. More importantly, however, he gained insights into the junior mineral exploration sector that are best observed by a young entrepreneur looking in from the outside – an investor's perspective that is helping to shape the business-first strategy of Tectonic Metals.
While Reda first became involved in mineral exploration as an investor, he demonstrated his acumen as a mining executive during his 11 years at Kaminak. As vice president of corporate development, Reda helped that junior raise more than C$160 million in capital before Goldcorp Inc. acquired the company for C$520 million in 2017.
Eira Thomas, who was president and CEO of Kaminak at the time of the half-a-billion-dollar sale of the company, is Tectonic's founding chairman.
Long before her role as top executive at Kaminak, Thomas was proving her skills as both a geologist and executive.
Her illustrious career includes involvement in the discovery of two diamond mines in Canada – first Diavik, as a geologist straight out of college in the 1990s, and then Renard, during her time as CEO of Stornoway Diamond Corp. in the 2000s.
Thomas is not the only former Kaminak CEO on the Tectonic Metals team. Rob Carpenter, who had the vision to see what others passed over at Coffee and then advanced the grassroots property in Yukon's White Gold District to a multi-million-ounce deposit, is now a technical adviser for Tectonic.
"Now that we had a taste of what it takes to discover and advance a multi-million-ounce gold district, we are hungrier than ever to not only do it again, but to do it better on every front imaginable," said Reda.
This highly respected exploration team is now setting itself up to build another multi-million-ounce gold district a few miles west of Coffee – in Alaska.
To this end, the former Kaminak team have joined forces with Curt Freeman, a renowned Alaska geologist and owner of the Fairbanks-based Avalon Development Corp., to round out a team seeking to trigger a tectonic shift in Alaska's gold exploration game.
"It was clear from day-one that Eira, Rob, Curt and I shared a passion for mineral exploration and discovery and the desire to bring something different to the mineral industry. Tectonic was the answer," Reda said.
Alaska ticks the boxes
While the Tectonic team has a fondness for the Yukon and a high regard for the vast gold potential there, they have decided to center their exploration focus west of the "Border Fault," a political structure that separates the now crowded Klondike and White Gold districts in the Yukon from largely overlooked eastern Alaska.
"Alaska has always intrigued us, and that political border is by no means a geological border," Reda told Mining News.
Transcending this border is the Tintina Gold Belt, a 125- by 750-mile gold-rich province that hosts several multi-million-ounce gold projects and mines such as Donlin Gold, Livengood, Fort Knox and Pogo in Alaska, as well as the Coffee and Golden Saddle deposits in Yukon's prolific White Gold District.
Similar to the White Gold District prior to the exploration rush there a decade ago, a wide swath of the Tintina Gold Belt stretching west from the Yukon border remains open for the discovery of the multi-million-oz gold deposits Tectonic is seeking.
In addition to being vastly underexplored, this gold-rich region of eastern Alaska provides other advantages that play into Tectonic's de-risking strategy:
• prospective geology that the Tectonic team is vastly familiar with;
• district-scale properties with compelling gold grades;
• great infrastructure, including paved highways and power; and
• the ability to do business with Native corporations that own gold-rich ground in Alaska.
"As an explorationist, there is nothing I love more than exploring and Alaska ticks the boxes on so many fronts," Reda said.
Exploring two Doyon gold properties
Tectonic's two largest Alaska gold properties – Northway and Seventymile – are being explored under an agreement with Doyon Ltd., the Alaska Native regional corporation for Interior Alaska.
The agreement with Doyon covers all phases of mining – mineral exploration, mine development and production – providing surety for a future company that wants to mine any deposits Tectonic turns up on the properties.
"The agreements we have with Doyon, from a de-risking perspective, are huge – to have that sort of production agreement at the onset brings confidence to everyone, including a potential partner down the road," Reda said.
Northway blankets 25 miles (40 kilometers) of robust gold-in-soils along the paved Alaska Highway and in terrane Tectonic is familiar with, checking off Tectonics de-risking boxes.
"We are going into a jurisdiction where the rocks are the same (as Coffee Gold) and we have a highway trucking right through our property – an actual highway!" Reda said.
When you consider the Peak Gold project is only a few miles to the west, and Oreo Mountain and Tanacross (both being explored by majors) are to the north, this section of the Tintina Gold Belt has been validated in terms of its mineral potential.
Stream sediment, soil and rock sampling carried out by Tectonic in 2018 validated two Northway targets – Area 6 and Area 7 – just off the highway.
Area 6, an undrilled target toward the northwest end of the property, hosts a 1,200-meter-long soil anomaly that has returned soil samples with as much as 597 parts per million copper and 253 parts per billion gold.
Area 7 hosts an 800-meter-long gold-in-soil anomaly toward the southeast end of the Northway property where soil sampling in 2018 returned assays with as much as 2.12 grams per metric ton gold.
Each of these areas coincide with robust geophysical anomalies that indicate large mineralizing systems.
To further prepare these targets for drilling, Tectonic hired Dawson City, Yukon-based GroundTruth Exploration to collect top of bedrock samples with its track-mounted GT Probe.
Used extensively in the Yukon in recent years, the GT Probe pushes a casing through the soil to collect a sample from the top of the bedrock. With less environmental disturbance than trenching and much less expensive than drilling, the GT Probe provides geologists a glimpse of the bedrock that is typically hidden by wind-blown glacial sediment and tundra that commonly mask the rocks across the Tintina Gold Belt.
The Tectonic team from Kaminak witnessed the effectiveness of the GT Probe at the Coffee project and are the first to use this this innovation in Alaska.
This efficient rig is also testing the bedrock at Seventymile, a property that blankets a 25-mile-long gold trend between Yukon's Klondike District to the east and Alaska's Circle Mining District to the west.
While some 83 historical holes tested seven prospects across Seventymile, Tectonic Metals believes these holes targeted the wrong style of mineralization.
"We are looking at it from a structural, high-grade shear zone lens," Reda said.
Flume is a 7,000-meter-long trend on the Seventymile that could host the high-grade shear zones Tectonic is looking for. Historical drilling along this trend did not test for the lithological contacts – where two rock types come together – that could provide channels for the gold-rich fluids to form deposits.
Exploration carried out last year, however, found evidence that a gold enriched shear zone exists at Flume and GT Probe sampling completed this year is further testing lithological contact zones where soils sampling has turned up robust gold.
In addition to testing for sheer zones at Flume, the GT Probe also tested Flanders, a Seventymile prospect where past drilling cut as much as 8.6 g/t gold over 4.9 meters.
High-grade gold in Goodpaster
Tibbs, a high-grade gold property that has many similarities to Northern Star Resources' Pogo gold mine property about 20 miles to the west, is the first Tectonic project to be drilled.
Past exploration at Tibbs, referred to as Rob by previous explorers, has turned up some very high-grade gold showings at surface, just the kind of project Tectonic Metals is looking for.
"I will take high-grade gold at surface to drill any day of the week," Reda said.
While Tibbs had shown high-grade gold potential, intermittent exploration since the discovery of Pogo has not turned up a cohesive deposit there.
Tectonic believes that the reason for this lack of discovery is past exploration was seeking the type of flat lying veins that has provided the bulk of the gold at Pogo, not the higher-grade vertical feeder veins also being mined by Northern Star.
"This property still has not been tested from that perspective," Reda said, referring to the search for vertical veins at Tibbs.
A number of these vertical veins have been identified.
Grey Lead is one such vein. Previous drilling at this high-grade target cut 5.7 meters of 19.14 g/t gold, 5.3 meters of 15.76 g/t gold and 4.26 meters of 6.13 g/t.
Trenching completed by Tectonic during 2018 encountered similar widths and grades, including five meters of 38 g/t gold and eight meters of 14.8 g/t gold.
Hilltop-Oscar, an undrilled target north of Grey Lead, indicates the potential to further expand the high-grade gold mineralization. Rock samples collected from Hilltop-Oscar have returned grades as high as 75.6 g/t gold.
Tectonic has also identified similar gold in trenches at Connector, a new target about 300 meters east of Grey Lead. This trenching encountered six meters of 8.1 g/t gold and 13 meters of 1.5 g/t gold. Rock samples collected directly on strike of the trenches contained 32.3 and 17.4 g/t gold.
When combined the targets in the Grey Lead area extend for some 1,000 meters along strike.
About 3,000 meters northeast of the Grey Lead area lies Michigan, a 1,000-meter-long mineralized corridor where rock samples contained as much as 900 g/t (28.9 ounces per metric ton) gold.
Three trenches dug by Tectonic last year – 3.3 meters of 11.5 g/t gold, six meters of 1.96 g/t gold and eight meters of 1.01 g/t gold – confirms mineralization along the trend.
One hole drilled in 2011 to test a deep geophysical anomaly at Michigan cut 1.57 meters of 57.21 g/t gold and 9.14 meters of 2.58 g/t gold.
Johnson Saddle, which is located on a plateau about 1,000 meters northwest of Gray Lead, is a bit of an enigma.
Trenching at Johnson Saddle encountered eight meters of 1.7 g/t gold that is different but interesting.
"This is not vein-style mineralization – it is intensely altered and is sitting on top of a plateau. It definitely warrants more work," said Reda.
"We are blessed with so many targets," Reda said, referring to Tibbs.
In order to cost effectively gain a better understanding of these high priority targets at Tibbs, Tectonic launched a 3,000-meter rotary air blast drill program at Tibbs in August.
Drilling fences of roughly 100-meter-deep RAB holes across multiple targets will provide Tectonic with a better understanding of what lies underneath and help the company prioritize targets for the much more expensive core drilling to follow.
This money saving measure is another layer of Tectonic Metals' de-risking strategy.