White Gold: Science and Soil in the Yukon

You don’t have to be in the Yukon for very long before you hear about Shawn Ryan. Last year, I’d just landed and was in the hotel pub with two great people who are legends in the placer business and was asked, “So are you going to see Shawn?” I had no clue. And as I travelled to the now Goldcorp Coffee deposit the geo who was running the tour said, “Shawn was over this property.”

Who the heck was Shawn Ryan?

The answer is complicated. And made all the more so because when I finally met Shawn Ryan it was two o’clock in the morning and still light outside “The Pit”, one of Dawson City’s infamous bars. I was introduced by an impeccably dressed Anthony Vaccaro, publisher of The Northern Miner. Shawn stood in the milky half light of the midnight sun, ball cap in place, talking about how picking mushroom picking had led to finding gold and how data, soils, and RAB drilling and drones all fit together. For two hours.

Neither Anthony nor I took notes. Instead we just listened to a very smart, very plain-spoken man as explained how he explored for and found gold.

There are a lot of ins and outs to the story but at the “end of the day”, Ryan having optioned off much of the land he’d staked in 2010, after the most recent junior mining downturn, found that those options had expired and he had his staked land back. He was ready.

David D’Onofrio, CEO of White Gold (V.WGO), takes up the story. “The juniors who had optioned the properties from Shawn had put about 25 million dollars into exploration,” he said. “Shawn got all the data and all the properties back when the options expired.”

“In the following years Ryan invested heavily in R&D and developed the ‘Drones to Drills’ program,” said D’Onofrio. “This unique methodical exploration allows for specialized comprehensive regional exploration at one third the cost of industry standards. He then came to us (PowerOne Capital) with a business plan.”

When you pitch 300,000 hectares of highly prospective land and data and a plan to do exploration the right way, you attract attention. Especially if the property is in the mining friendly Yukon and next door to the Coffee project, which was then being developed by Kaminak and would be sold for $520 million to Goldcorp. The opportunity was a perfect fit for PowerOne who has an extensive and successful track record in the exploration business as well as a very bullish thesis on the Yukon.

“On the back of Shawn’s 3-year business plan to explore one of the most prospective and underexplored regions of the world, we proceeded to raise 18 million dollars,” said D’Onofrio. “The opportunity also attracted the attention of the majors and Agnico Eagle came in for a 19.9% interest as our strategic partner. White Gold was born, and we got to right to work.”

Getting to work meant using the “Drones to Drills” exploration system Shawn Ryan had spent years perfecting. Finding the right place to drill is critical.

David Schmidt, White Gold’s CFO, who was also on the call said, “Too many juniors drill too soon. They think they can only raise money to drill so they rush the drilling.”

White Gold takes a much more measured approach. The drones are used to build precise maps and models of the areas White Gold is interested in. Then the area is flown with Induced Polarization (IP) equipment looking for anomalies. Soil samples are taken on a gridded basis. Anomalies are then investigated with the GT Probe, a replacement for trenching that is more environmentally sensitive and less costly than trenching, and only when all the data lines up are the remote-controlled GT RAB drills deployed to drill. All this at a third the cost of traditional exploration. Combining this precise exploration strategy with the pre-existing data White Gold already has, optimizes the discovery process.

“We are narrowing down where we want to drill,” said D’Onofrio. “And we know where not to drill. This region has been Shawn Ryan’s personal playground for twenty years. We are very disciplined in our exploration work.”

That discipline caught the eye of Kinross which had purchased Underworld Resources a few years earlier for $140M. Underworld had just discovered the 1.2M oz high grade Golden Saddle deposit, also in the White Gold District, also discovered by Shawn Ryan. Kinross wanted exposure to White Gold’s land package around their properties and the local knowledge and exploration talent White Gold had, which now included Rob Carpenter, the founder of Kaminak and Jodie Gibson, who was involved with the original Golden Saddle discovery. The question was how?

The answer was to roll the Golden Saddle deposit (and their other properties in the district) into White Gold with Kinross taking a 19.9% position in the company along with $10M cash consideration, and future earnouts. This would now bring in two majors as partners which needed to be blessed before it could happen. “The decision was made at the CEO level,” said D’Onofrio. “They met and decided on a collaboration.”

All of which left White Gold with the most dominant position in the White Gold District, with two majors as partners, a fully funded exploration plan and a 1.25M ounce high-grade gold deposit open in several directions. This is a very unique company to have such a valuable asset base with so much upside and new discovery potential in a stable jurisdiction like Canada. Goldcorp’s Coffee project, also originally staked by Ryan, is just next door, which Goldcorp intends to put in production by 2021.

The company is in the process of closing a 10 million dollar flow-through share financing led by its strong banking partners with investment from some of the brightest resource investors in North America, and is already in the field for this year’s exploration with drills turning on multiple exploration targets, as well as expanding its Golden Saddle and Arc Deposits which the company thinks can grow significantly from its current size of 1.25 million ounces.

Furthermore, making a good situation even better, last year the federal & Yukon government announced that it would be spending 360 million dollars on improving roads in the Yukon. One of those improvements will upgrade existing placer miner built roads all the way from Dawson to the Coffee deposit. “Essentially, right through the White Gold properties,” said D’Onofrio. “It’s a game changer.”

Schmidt and D’Onofrio and the rest of the team are looking forward to the results of this summer’s exploration season. They know that the Drones to Drills techniques will be identifying near surface targets across thousands of hectares. They also know that White Gold can call on the deep geological strengths of both Agnico Eagle & Kinross. And they know that Shawn Ryan will be guiding the exploration in the district he discovered.

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