We’ve been trying to get an interview with Golden Predator Mining Corp (GPY:TSXV) CEO Janet Sheriff since the beginning of July. Because Sheriff has been incredibly busy.
“I’ve been on the road a lot,” said Sheriff when we finally managed to connect. “A big reason is finalizing the approvals for the Quartz Mining License and Water License for our Brewery Creek Gold Mine in the Yukon. Following that we completed a private placement and now are busy advancing the Brewery Creek Mine, with drilling and site improvements underway.”
Golden Predator has two active projects in the Yukon: the Brewery Creek Gold Mine, a past-producing, licensed mine in the centre of the territory, 45 kilometres from Dawson City, and the Three Aces project which is an exploration project in the South Eastern corner of the territory. GPY also owns and runs the Yukon’s first test processing plant and the Yukon Mint which and produces gold coins and bar. All of which means Sheriff and her husband and GPY Chair, William Sheriff are flat out busy.
“Brewery Creek operated from 1996 to 2002 and closed when the gold price fell below $300/ounce explained Sheriff. “However, looking at the paperwork over the past year I saw this was a temporary closure. Which I was pretty sure meant that, legally, the Quartz Mining Licence and the Water License were still valid. We needed confirmation from the Yukon Government and the support of Tr’ondek Hwech’in First Nation which we received following their due diligence.”
“Tr’ondek Hwech’in has been very supportive and we are very appreciative of the support to reopen the Brewery Creek Mine under existing licenses,” said Sheriff. “We met with Tr’ondek Hwech’in and presented our information, then they completed their own due diligence and agreed with our assessment of the license as did the Yukon Government. I wasn’t surprised, we had our facts correct. We have a mine, a proven project, both economically and environmentally, on a brownfields site that provided economic benefit locally while also acting in an environmentally responsible manner that can open again under the already assessed and licensed mine plan.”
The great advantage of Brewery Creek is that it can be put back into production quickly with a very low CAPEX.
“We have a resource of approximately 850,000 oxide ounces of gold with a significant amount of infrastructure already in place,” said Sheriff. “a heap leach pad with 10 licensed cells but only 7 built gives us room to grow quickly under existing permits. And our first step will be to reprocess the ore currently on the heap leach pad. “
“We intend to reprocess the 10.4 million tons of rock which are already on the heap leach pad,” said Sheriff. “The former operator was taking “run of mine” rock and leaching it. Which means they were only getting a little over 50% recovery. And with 10.4 million tonnes on the heap, we can recover ounces already mined by reprocessing, essentially crushing and restacking, balancing the pH on the heap and removing any leaching pathways created that would reduce the efficiency of the operation.”
Starting Brewery Creek back up with the rock in the leach cells and the stockpile rock could mean, if everything goes perfectly, building up the mine in about 18 months.
“We’ll get a lot done this year. Pre-strip, clear more roads, check the existing foundations,” said Sheriff. “We are licensed to install a camp, have our septic system, a road to Dawson City which is only 45 kilometres away.”
“We’ll also be drilling to expand and upgrade resource at Brewery Creek to help extend the mine life,” said Sheriff. “Last year we found six good targets, drilled three of them and hit three times. We can expand our mining area by way of amending our existing licenses which is in the plan. Most of the drilling has been shallow for oxide resources and we have found sulfide at depth. Long term, we also plan to look to expand the sulfide potential and consider different processes in the future.”
(Golden Predator put out a press release August 7, which outlines the Brewery Creek work program in detail.)
A thousand kilometres away is Golden Predator’s Three Aces exploration project. When I visited Three Aces two years ago it was very clear that the geology of the project was challenging.
“At 3 Aces the gold occurs like pearls on a string,” said Sheriff. “You get high-grade gold where a cross structure crosses the main structure. It’s complicated but we are understanding it. Our understanding changed with our late season drilling last year.”
“This is old school, boots on the ground, type of exploration,” said Sheriff. “The challenge is how to identify where those cross structures actually are. Trenching and sampling work at 3 Aces.”
Part of the 3 Aces puzzle is that the high grade is actually off the scale but nearly impossible to accurately drill test. So Golden Predator decided to bulk sample to try to get a handle on the grade. However, to test the bulk sample GPY had to actually process the rock which led to the construction, in 2016, of a bulk sample pilot processing plant. This plant has been upgraded significantly and is now capable of processing 50 tonnes per day of material.
The bulk sampling and processing program achieves two goals. First, in conjunction with closely spaced drilling, it gives GPY the ability to continuously evaluate the quality of drill hole assays, rock mechanics, optimal drill spacing for resource delineation and optimal metallurgical recovery. Second, it produces gold.
“Our plant sorts into three concentrates,” said Sheriff. “The high grade, what we call “the middlings” and the rest. The rest runs 3-5 gpt gold. The middlings are high grade in the thousands of grams per ton. And the high grade is free-milling nuggety gold from which we pour doré bars.”
“In addition to working to test processing without chemicals and getting over 80% recovery, we have moved into testing the middlings. We had been sending the middlings to a smelter but we were not impressed with the results,” said Sheriff. “So, we decided to try to process the middlings ourselves. We’ve just started but we’ve developed a proprietary, cyanide free process which has worked well in the lab and we will field test it soon. We’ve filed a provisional patent and we’re now pilot testing the process and excited to see if it might work. Next, what to do with the rest and at 3 to 5 gpt we have some ideas.”
Meanwhile, the main processing plant should be done with the 2018 bulk sample later this year.
The obvious advantage to processing the bulk sample is that Golden Predator is a rare exploration company which has pre-production revenue. It also means that Golden Predator’s Yukon Mint has a steady supply of gold to turn into coins and bars. The mint struck its first coin in 2018 and this year will be issuing two new coins based on designs from Kaska Nation artists.
Golden Predator has just completed a 9.3 million dollar private placement with legendary gold investor Eric Sprott taking 5,000,000 non-flow-through Class A common shares sold through the offering increasing his total ownership to 13 million Class A common shares of the Company. A huge vote of confidence and more than enough funding to help advance Brewery Creek and keep up the exploration and bulk sampling effort at 3 Aces.
Janet Sheriff is going to be busy for quite a while as Golden Predator moves towards mining gold at Brewery Creek and closer to understanding the rich geology of 3 Aces. Which means that there will be a steady news flow from both projects with a heavy emphasis on the near-term production visibility at Brewery Creek, just in time for the current rally in the price of gold.