The arc of the Tintina fault, running from northern British Columbia through the Yukon and into Alaska contains both the gold rich creeks of the Klondike and the silver hills surrounding Keno City. Within this prolific gold and silver belt you can see the history of the Yukon gold rush and the legacy of the vast underground silver mining operations at Keno Hill. You can also visit camps at every stage of development from raw exploration to fully constructed mines with milling facilities.
To reach our first camp we flew from Whitehorse to Watson Lake where we climbed aboard helicopters for a ground hugging flight under the rainy mist. Our veteran pilot described it as “flying by Braille” which was not reassuring but we were soon out of the worst of the mist and landing at Banyan Gold’s 400,000 ounce, NI 43-101 compliant, Hyland gold project.
400,000 ounces may sound like a lot of gold but for Tara Christie, CEO of Banyan Gold (V.BYN), it is really just a good beginning. Working with exploration geologist Paul Gray, Banyan believes its Hyland property is similar to the ATAC Rackla Trend property to the north. Both these properties exhibit Carlin-type gold deposits. As soon as the word “Carlin” comes up people think of the multi-million ounce gold deposits in Nevada.
With 186 km2 to explore, Banyan is working to identify targets while actively drilling its resource deposit. Its Hyland property is fully permitted for 10 years of advanced exploration and Gray outlined an ambitious, fully funded, 2016 program of geochemical soil sampling, trenching and diamond drilling.
What Banyan has already found at Hyland is very encouraging. The bulk of the gold resource identified is within 75 meters of surface and most of it is oxide rather than sulphide gold. This suggests an open pit mine with a heap leach facility. But Hyland is a distance away from planning a mine. The economics of the site mean that a significantly larger resource is needed. In the conclusion of the 2016 Hyland Technical Report Geologist Rob Carne noted, “The major zones of mineralization on the Hyland Gold Property are aligned along the Quartz Lake Lineament, a greater than 18 km long zone of faulting, folding and brecciation that has been the locus of a variety of styles of gold mineralization. The vertically and horizontally extensive areas of known gold mineralization, in conjunction with other less well explored areas of strongly anomalous gold and pathfinder element response, are testament to a strong causative hydrothermal system that gave rise to a district-scale area with high exploration potential for a variety of sediment-hosted gold exploration targets types such as the Marigold Mine in the Battle Mountain-Eureka Trend of north-central Nevada and the Rau Trend of central Yukon.”
Banyan’s Hyland property enjoys several advantages. There is an existing camp beside a small, trout filled, lake built by an earlier company. There is year round road access. And, from an exploration perspective, the higher reaches of the property were not glaciated making relatively inexpensive soil sampling and trenching very effective exploration tools.
Banyan has another prospective asset, the Aurex-McQuesten Project, closer to Keno Hill. However, the company has a huge asset in its CEO. Tara Christie grew up driving excavators and bulldozers at her family’s successful placer operations in the Yukon. Put that together with a Professional Geological Engineer designation and a lifetime spent around mines and explorers and Christie understands and can quietly and confidently explain Banyan’s potential. With that explanation, and Christie’s long Yukon experience, comes the funding for the exploration Hyland requires.
Almost due north of the Hyland project is Golden Predator’s (V.GPY) 3 Aces Project. This is a district scale orogenic gold deposit in which visible, free, gold is found in multiple, large, quartz veins. Golden Predator believes that the structural setting for these veins persists along a 40km trend throughout the property.
With a 2017 40,000 meter drill season planned which also includes more soil sampling, trenching and road construction, the 3 Aces camp is a sea of mud and activity.
At the center of that activity is William Sheriff, Golden Predator’s Executive Chairman. And my guide for the tour. It was raining and the clouds were swirling around the mountain tops. We followed Sheriff through the thick grey-green mud of the camp to a helicopter and did a swooping tour of the site. Sheriff would point at a hazy promontory and gleefully announce “Visible gold. New vein. We found it when we were pushing through a road.” Then we’d swoop down on another target. “Trench. Great looking rock. This place is unique.”
We flew over the company’s million dollar bridge over a fast flowing river at the edge of the property and headed out along the 35km trend with Sheriff pointing to drill pads and roads and trenches up the side of one mountain and then up another. The ceiling kept us a bit lower than Sheriff wanted to go but the size of the property and Golden Predator’s activity was apparent.
Off the helicopter and into the office for a quick safety briefing and a look at the down hole magic of televiewing which allows a geologist to examine rock in situ to determine orientation and structure. The 3 Aces project has a good deal of complex structure with gold rich quartz veins folding over themselves and rising to surface only to plunge deep a hundred feet away.
“You drill a hole you hit a vein,” said Sheriff as he bundled us into a crew cab pickup and skidded up the sloppy road to a drill site adjacent to a quartz vein which ran a few hundred meters up the side of the mountain. Even through the mist we could see the exposed quartz running up the mountain.
The quartz was interesting but what excited Sheriff was visible gold. He parked and marched through the mud to the vein and then over a small cliff. “The visible gold is down here.” Matt Keevil from The Northern Miner and I slipped down the wet, muddy rocks. Sheriff, in knee high, steel toed rubber boots, stood proudly at a low face and there were a dozen flecks of visible gold in across a couple of feet of the vein. To Sheriff’s delight, Keevil actually pocketed a rock with VG on it.
All in, the 3 Aces project appears to be very rich, with drill results as high as 124 grams per ton over three meters in one hole and half a meter of 315 grams per ton in another. However, it is also a very complex deposit which is only slowly being understood. More exploration is the order of the day with Golden Predator committed to a 9.5 million dollar drill and exploration program in 2017.
Sheriff being Sheriff, the drill testing of the property is only part of the story. Last year and this the company is engaged in a bulk sampling program. This program provides metallurgical data for each of the zones tested and it is proving up Golden Predator’s idea that much of the gold, around 80%, can be recovered with a simple gravity process. “We’re turning it back into placer,” Sheriff pithily put it.
It’s easy to see Sheriff as a showman, a performance artist in steel toed gumboots. His enthusiasm is infectious and he has the geology at his fingertips. But the Golden Predator story has support from savvy, steely eyed investors like McEwen Mining, Eric Sprott and Pat DiCapo from Power One. The 2017 exploration program is fully funded. The 3 Aces project has strong First Nations support. And there is no question at all that there is gold, plenty of gold, on the property.
Converting the discoveries and huge exploration potential into an actual mine is likely to take a few years. In fact, determining where best to actually start mining is a challenge in itself. But Golden Predator and Bill Sheriff seem ready to take the time and make the investment to figure out 3 Aces.
On mining tours there is usually “swag”, gifts ranging from baseball caps to bags to pens and loupes. At Alexco Resource Corp. (T.AXR) there was a miner’s pan full of palm sized rocks which were full of silver. It was a stunning introduction to the riches of the Keno Hill Silver District.
Alexco stood out on the tour because it has been and will be again a fully functioning mine with its own 400 ton per day mill. That mill is in the shadow of one of the most prolific historical silver regions in the world. Between 1914 and 1989 6.8 million kilograms of silver were extracted from the area. However, in 1989 the Keno Hill Mine was closed due to collapsing metal prices. The asset was sold by the federal government to Alexco in 2009 as part of a package which included significant remediation of the environmental damage created by the earlier mining.
Alexco operated commercially beginning in 2011 producing approximately two million ounces of silver and more than 20 million pounds of lead and zinc concentrate per year into 2013 when production was suspended in the face of collapsing silver and base metal prices. To get its mill built, Alexco entered into a silver purchase agreement with Silver Weaton which, in March 2017, was amended to allow Alexco much greater flexibility in processing its resource. This agreement has been criticized but, as Alexco President and CEO, Clynton Nauman said during his presentation, “I’d probably do the deal again. It got us the mill and added 50 million dollars in market value.”
As at 2016 Alexco had an indicated silver resource of 23 million plus ounces with an average grade of 800 gpt. The entire property is prospective. So much so that when the company was bulldozing the ground for its mill, it found a deposit more or less directly under the mill site. The Flame and Moth deposit has an indicated resource of 1,679,000 tonnes grading 498 gpt.
However, the long term story at Alexco is likely up the hill at the Bermingham. I was lucky enough to be driven up by British born geologist Seymour Iles who many believe is responsible for understanding the Bermingham discovery. And, potentially, for recognizing the geological patterns which underlie and control much of the Keno Hill District’s silver resource.
In the back of the truck were Greg Johnson, CEO of Metallic Minerals (V.MMG) and Bill Harris, a Director of Metallic. Metallic’s property is adjacent to, and on-trend with, Alexco’s operations. Before very long Greg and Seymour had gone deep into the geology of the district. So deep that when we stopped Seymour was drawing fault lines on the dust covered windows of the crew cab. Greg took out his phone and snapped a picture of the diagram.
Right now Alexco is awaiting some permitting before it goes back into production. It has cash in the bank and a solid 25% of its stock is institutionally held. As it waits for its permits, the company has an aggressive drilling program in place to add ounces to its resource. Currently the mine life is estimated at 8 years, success at Bermingham and at other drill locations could extend that life significantly. It will also give Seymour Iles more data for his developing model of the Keno Hill Silver District.
To the north of Keno Hill is ATAC Resources (V.ATC) 185 kilometer long Rackla Gold Property. Rackla is being characterized as Canada’s first “Carlin-type” deposit. Which means that the gold has been placed hydrothermally and is largely invisible. As Graham Downs ATAC’s CEO put it, “This is a long stretch of carbonates.”
Rather than looking for gold itself, Downs and Julia Lane, VP Exploration look for the minerals in which gold is typically found in Carlin style deposits. And they find them. One of the indicators is arsenic and one big arsenic anomaly, when drilled, led to an interval of 65 meters of 4.65 gpt rock. Another drill hole along a fault had a 21 meter interval grading 8.03 gpt.
The very real possibility of Rackla becoming Canada’s Carlin has attracted significant interest and investment from two majors. Back in 2013 Agnico Eagle took a significant position in the company and recently, in April 2017 Barrick signed an earn in agreement for the middle section of the Rackla property. The Barrick deal commits the company to spending 55 million dollars to earn 70% ownership and also involved the purchase of 8.3 million in flow through shares which brought Barrick’s interest in ATAC to 19.9%.
The ATAC Osiris project, at the eastern end of the property, is set in a near alpine mountain valley only accessible by helicopter. We were lucky enough to have a gorgeous day to visit what we had been told all over the Yukon is Canada’s most beautiful exploration camp. The kitchen dining room building was simple and very efficient. No danger of going hungry. Downs began the presentation with an outline of the company’s history and then turned the proceedings over to Lane to explain the geology and the exploration plans which ATAC hopes will lead to a maiden resource estimate in the near future.
Exploring Osiris is a matter of looking for soil anomalies which suggest targets and then trenching or drilling those targets. Which would seem straightforward except for the fact that a lot of the targets are on 60 plus degree slopes. Everything, beginning with the lumber for the drill pad construction crew, to the drill, to the core has to be helicoptered in and out. Which is not cheap. $350 a drilled meter, so Lane has to be extra sure a target is worth drilling. So far, the results suggest there is significant gold in a variety of locations at Osiris.
This summer ATAC will be spending approximately 8 million dollars exploring the Osiris Project. Barrick will spend 5 million exploring its section of the property and another two million will be spent at the Rau Project at the Western end of the property.
While exploration is underway, ATAC is also in the permitting phase of developing a 65 kilometer road to the Rau Project. This road would cost roughly 11 million dollars but will dramatically accelerate the exploration and eventual mining on all three sections of the property.
Our last stop on the tour was to Victoria Gold’s (V.VIT) fully permitted, shovel ready, Eagle Gold project at Dublin Gulch. John McConnell, President and CEO, is building a mine. Which is easy to say on paper but the reality is extraordinary.
At the center of the project is an open pit mine which is nothing less than taking down the side of a substantial mountain. The waste rock is separated and stored, the target rock is crushed and then conveyored across a valley and put in a heap leach pad which will grow to fill another valley. The gold will be leached out (at a projected rate of 200,000 ounces annually) and, at the end of the mine’s life, the land will be remediated.
The sheer scale of the project is daunting but under McConnell’s leadership the pieces are falling together. Construction costs are estimated to be 300 million dollars of which 260 million are in place. Victoria enjoys investment from Kinross, Electrum and Sun Valley Gold and has attracted interest from several majors looking for a ready to mine gold resource. The design of the mine is nearing completion. Relations with the First Nation of Nacho Nyak Dun are excellent with Victoria and the First Nation having signed a Comprehensive Cooperation and Benefits Agreement in 2011.
While mine planning is continuing with initial construction set to begin in the Fall, the exploration side of the company is going strong. Paul Gray leads the effort with a 6.2 million dollar 2017 budget. Gray drove us around the property pointing out where the pit, the waste rock and the heap leach facilities would be. But he also showed us where drilling and trenching were continuing. There are half a dozen prospective zones on the Victoria property with more to be revealed as geophysical and airborne exploration continues. At Eagle West, very close to the Eagle deposit, drilling has just been reported with solid intervals of mineralization. The Olive Shamrock zone has shown significant potential at surface and there is lots of prospective ground along a trend in what Victoria calls the Potato Hills.
We spent the night in camp. There we joined the investors’ side of the tour. This is the first of Victoria’s Eagle Gold camps and out my fairly Spartan room’s window I could see the buildings Victoria recently acquired, very cheaply, for an expansion of the camp. At peak construction 350 to 400 people will be working in camp.
In the evening, after an outstanding prime rib dinner, we drove down to the creek to pan for gold. I had the great good luck to have no less than three fully qualified consulting geologists assisting my efforts. I got panning tips from Tara Christie who, in the small world of Yukon mining, turns out to be John McConnell’s wife and who had grown up with a gold pan in her hand, Lesley Stokes a geo who writes for The Northern Miner and Helena Kuikka, an exploration geo at Victoria all offered advice. After being eaten by mosquitos for an hour and having my aged back howling at the unaccustomed strain, I had reduced about six pounds of rock, mud and sand to one, freckle sized, smidge of gold. “A clinker,” said explorationist Paul Gray. The journalists and the geos drove back to camp. The investment guys kept right on panning and we didn’t see them for a couple of hours.
For Victoria Gold, the mountain where my freckle of gold came from, is about to become a mine.