PEA looks at higher grade gold at Tiger
ATAC encouraged by robust economics, eyes larger potential
Last updated 3/5/2020 at 12:41pm
Rau, an intriguing precious and base metals property at the western end of the 185-kilometer- (115 miles) long Rackla Gold property in the Yukon, will continue to be the primary focus of ATAC Resources Ltd.'s exploration efforts in 2020.
Last week, the company published the results from an updated preliminary economic assessment (PEA) for Tiger, a carbonate replacement gold deposit that is the most advanced project on the 660-square kilometer (255 square miles) Rau property.
According to a resource calculation completed earlier this year, Tiger hosts 4.53 million metric tons of measured and indicated resources averaging 3.19 grams per metric ton (464,000 oz) of gold.
The PEA considers mining 2.7 million metric tons of this resource averaging 3.82 g/t gold.
Following one year of construction and pre-stripping, this operation is expected to produce roughly 267,000 oz of gold over a six-year mine life. Peak annual production of 72,860 ounces of gold in the first operating year, with an average annual production of roughly 45,000 oz over the life of the mine.
"The updated geological model and PEA envision a smaller but higher-grade operation than contemplated by the 2016 resource and PEA," ATAC Resources President and CEO Graham Downs explained.
At C$110.1 million in preproduction capital costs, this tighter mine design is relatively inexpensive to put into operation and demonstrates robust economics.
At a base case gold price of US$1,400 per ounce and an exchange rate of C$1.00 equal to US77 cents the operation outlined in the PEA produces an after-tax net present value (5% discount) of C$118.2 million, internal rate of return of 42.6% and a pre-tax payback period of just 1.24 years.
"We are very encouraged by the short payback period and high IRR, which are calculated at a base case substantially lower than current gold prices," said Downs. "The updated deposit model has also identified strong high-grade trends which are open along strike and at depth. Tiger's high grades and margins, coupled with nearby satellite targets, provide a compelling case for advancement."
In its pursuit of this compelling case, ATAC refined priority targets in preparation for step-out drilling. Prospecting and mapping will also be conducted to follow-up early stage geochemical anomalies adjacent to Tiger with potential to be satellite deposits.
ATAC, however, plans to focus much of its 2020 exploration on Airstrip, a compelling gold target about 5,000 meters southeast of Tiger.
Covering roughly 11.5 square kilometers (4.4 square miles), Airstrip has the largest gold-in-soil anomaly on the entire 1,700-square-kilometer (656 square miles) Rackla property.
A first pass of rotary air blast drilling carried out at Airstrip in 2016 cut 13.7 meters of 1.43 g/t gold in hole ASR-16-006 and 22.9 meters of 0.66 g/t gold in ASR-16-004. Both holes ended in mineralization at the roughly 70-meter maximum depth capacity of the drill. These drill holes are located 430 meters apart and have not received follow up drilling.
A re-evaluation of the Airstrip target through prospecting and mapping conducted last year suggests this area could be situated in the cupola of a blind intrusion.
"Fieldwork in 2019 upgraded the Airstrip target to priority status for 2020," said Downs.
Gold-bearing geochemistry suggests a strong association between gold-bismuth-tellurium-antimony which is analogous to the Tombstone Intrusive Suite bulk tonnage deposits such as those hosting the mineralization at Victoria Gold Corp.'s nearby Eagle Gold mine, Kinross Gold Corp.'s Fort Knox Mine in neighboring Alaska, and Golden Predator's Brewery Creek mine project near Dawson City.
Prospecting and hand pitting in 2019 returned grab samples grading up to 1.63 g/t gold more than 1,000 meters east of the 2016 RAB drilling, indicating the large size potential of the Airstrip target.
The initial phase of 2020 exploration at Airstrip will involve excavator trenching, mapping and prospecting in preparation for an anticipated second phase of drilling.
"The presence of shallow gold mineralization coupled with a potential bulk-tonnage target based on the size of the geochemical anomaly, has resulted in an exciting exploration opportunity we are eager to diamond drill," said the ATAC CEO.
The company also plans to follow up on gold, copper, silver, lead and zinc targets across the wider Rackla Gold property. High-priority targets to be assessed by RAB drilling, trenching, prospecting, hand pitting and mapping.
One of these regional targets is Puma, a carbonate replacement gold prospect about 4,500 meters northwest of Tiger, has returned grades as high as 18.45 g/t gold in prospecting samples. Drilling conducted in 2011 and 2015 only encountered sporadic zones of low-grade oxide gold mineralization at Puma. Subsequent mapping, however, indicates favorable Tiger deposit limestone stratigraphy was not tested by the previous drilling.
Condor, a carbonate replacement gold-silver-zinc target about 1,500 meters northwest of Tiger, will also be investigated further this year. Grab samples from highlight returned grades as high as 17 g/t gold with 378 g/t silver, and 30.5% zinc.
Spotlight, a gold-silver skarn target 6,500 meters northeast of Tiger, is also slated for additional work this year. Grab samples collected from a 2,200-meter-long geochemical anomaly at Spotlight has returned up to 7,080 g/t silver and 3.27 g/t gold.
ATAC is also excited to follow-up on copper, silver and lead identified last year at Val, an historical silver-lead-zinc vein target 36 kilometers (22 miles) northeast of Tiger.
"Further east, the Val target contains multiple veins with extraordinary silver and lead grades, within a broader halo of bulk-tonnage-grade silver mineralization," said Downs.
One sample collected from Val last year contained 11,663 g/t silver, 76.4% lead, and 2.59% copper. Prospecting and mapping work in 2019 also identified broad zones of potential bulk-tonnage-grade silver-lead mineralization which were not evaluated by previous work.
ATAC will also continue to explore priority areas for potential expansion of high-grade portions of the resource at Tiger. Work will be conducted in 2020 to refine these targets in preparation for step-out expansion drilling. Prospecting and mapping will also be conducted to follow-up early stage geochemical anomalies adjacent to Tiger with potential to be satellite deposits.