ATAC: Carlin on Edge

V.ATC, ATAC Resources, gold, Yukon

One of the best things about the Yukon Mining Tour is the opportunity to revisit amazing places like ATAC (V.ATC) Resources’ Rackla property to the northeast of Keno City. When I went last year the sheer beauty of the place was overwhelming. And the geology, frankly, flew over my head. This year I was much more prepared.

ATAC’s big news for 2018 was the release of a maiden 43-101 compliant resource estimate for the company’s Osiris Project on June 18, 2018. In that press release, ATAC CEO Graham Downs stated, “Defining a maiden resource with over one million pit-constrained ounces is a major development for the company and highlights the emerging high-grade open-pit potential. With only 78,614 metres used to define the resource we achieved an excellent discovery rate of over 21 ounces of gold for every metre drilled.”

As you fly into the Osiris camp where the maiden resource has been drilled off, you fly for nearly three-quarters of an hour parallel to the Rackla project. It is 187 kilometres long and Osiris is about a fifth of the overall property at the eastern end. The drilling at Osiris, while it represents over 74,201 completed meters in 231 holes within the cluster, really only covers a tiny portion of the land in the zone.

The deposit remains open in multiple directions and this year ATAC will be drilling 10,000 meters to expand the resource at Osiris.

The market greeted the 43-101 resource estimate a bit tepidly. Why not wait until ATAC had a resource over 2 million ounces I asked Downs. “Because a lot of people had waited long enough,” said Downs.

Which makes a lot of sense given the history of the Rackla property. Famed Yukon mining consultancy, Archer Cathro had spotted the Tiger Gold deposit on the western side of the property back in 2006. From that point, the company defined carbonate replacement style oxide and sulphide gold mineralization and completed 26,844 m of drilling in 150 holes.  A 43-101 resource estimate was prepared with measured and indicated gold of 485,700 ounces at the western end of the property. A revised PEA was prepared in 2016. The key concept here, and at Osiris, is carbonate replacement style mineralization.

Where else has that been seen? The answer is the Carlin Trend in Nevada which is one of the most prolific gold mining areas in the world. But as you look at Tiger or Osiris, the terrain bears little resemblance to Northern Nevada. At Osiris, the carbonate rocks form the sides of respectably high mountains and the drill pads are feats of alpine engineering.

ATAC VP Exploration, Julia Lane, on the edge of a Carlin structure after a hail storm

Julia Lane, ATAC’s VP Exploration, cleared up my confusion. “You can think of it as a seabed which has been tilted on its side.”

The Carlin Trend is a seabed which is mainly horizontal, the carbonate rocks at Rackla are very nearly vertical. But the geology and the chemical signatures of the rocks in the Yukon bear a striking resemblance to the rocks in Nevada.

What ATAC – and its deeply Carlin experienced partner, Barrick Gold, which holds the middle section of the Rackla property on an earn-in basis – are finding is a series of Carlin-like deposits running East to West along the property with faults running North South.

It is still early in the exploration cycle but the key thing about a Carlin-style structure is that it is likely to be large. Carlin itself is about fifty miles wide and forty miles long dotted with some of the most productive gold mines on the planet. The Rackla deposit runs 116 miles West to East and varies in width. From an exploration perspective, Downs explained, “We have an excess of exciting targets.”

The big knock on Rackla is that it is a long way from roads, power, manpower and pretty much anything. Supplies have to be flown into a private airstrip and then helicoptered to camp. Which makes exploration expensive.

However, in March of 2018, ATAC was able to announce “receipt of a joint Decision Document from the Yukon Government (YG) and the First Nation of Na-Cho Nyak Dun (NND) stating that the Company’s proposed 65-km, private, all-season tote road to the Tiger Gold Deposit will be allowed to proceed.” While there are still permits to obtain and details to work out, this decision clears the way for a road to Rackla. And once the road to the Tiger Deposit is built there is no reason to think that permission to extend that road to Barrick’s section of the property and then on to the Osiris project will be denied.  With road access the economics of the Rackla property become much more attractive.

With a road and an open pit plan to begin extracting the gold, ATAC should be on its way to developing its Carlin style resource. The Government of the Yukon is mining friendly and ATAC has developed a good relationship with the First Nation of Na-Cho Nyak Dun.

Having Barrick as a drilling and earn in partner means that ATAC has a major looking at every meter of core drilled. A company with the deep pockets needed to develop a multiple deposit property. When ATAC is ready to move to development it would not be a surprise to see Barrick knock on its door.

Right now, the company is focused on a 2018 drill program with Barrick which will see 20,000 meters drilled with roughly 10,000 meters in step out drilling at Osiris and 10,000 meters at Barrick’s Orion project. Given ATAC’s success to date and its ever more sophisticated understanding of the structure of the gold deposits at Osiris, it is a pretty good bet that a revised 43-101 will bump the resource over 2 million ounces. The really interesting question is how much over. We’ll just have to wait until the assays are back in the Fall.

UPDATE: 17 July 2018 ATAC reports an intercept in a step out hole of 23.59 meters of 9.5 gpt: click here for the release

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