Deep Value Gold Resources in Canada’s Yukon
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Golden Predator Mining Corp. (TSXV:GPY) is a Canadian gold exploration company focused on advancing its high-grade 3 Aces Project in Canada’s Yukon. The company also holds the past gold producing Brewery Creek Project.
The 3 Aces Project is the highest-grade exploration project in the Yukon with the potential to become a new high grade orogenic gold district in an area of increasing activity, including Goldcorp’s $520 million acquisition of Kaminak. Early in 2017, Golden Predator further consolidated its land holdings in the emerging district with the strategic acquisition of the Reef and Hy-Jay properties and in December 2017, Golden Predator announced that it had entered into a property purchase agreement for acquiring 100 percent of the Sprogge property, for a total land package of 357 km2 (35,700 hectares).
The Central Core Area of the 3 Aces Project has been the primary focus of Golden Predator’s work programs throughout the 2016 and 2017 field seasons. The area is divided into four distinct zones: Hearts, Spades, Clubs and Diamonds. The success of the 2016 program led to a more extensive 20,000-meter 2017 drill program. This drill program took place alongside other initiatives including trenching, soil sampling and improving access (road building). Results from this drilling program included grades of 50.4 g/t gold over 8 meters, 20.15 g/t gold over 6.86 meters and 16.15 g/t gold over 19.3 meters.
Golden Predator generated a small cash flow from the 776-tonne bulk sampling program which confirmed gravity recoveries of 83% from a simple gravity recovery circuit and with additional gravity processing, reflected total recoverable gold expected to be approx. 95%.The Company sold 671 troy ounces of fine gold, for which it received US$865,446. The program yielded a total of 953.4 troy ounces of fine gold.
The Brewery Creek Project includes a past producing heap leach gold mine with a 2014 Preliminary Economic Assessment. The company is advancing the project through geotechnical studies including new metallurgical data as well as an updated PEA.
Golden Predator is well-financed for the exploration program currently in place. In March 2017, the company completed a C$17.25 million bought deal financing.
“We have a unique opportunity at 3 Aces with a 357 km2 land package, featuring at least 6 mineralized areas within and along favorable stratigraphic and structural zones that extend along trend for more than 35 kilometers. The 2017 drill program focused on the year-round road and bridge accessible Central Core area, host to numerous high-grade gold in quartz veins,” said Janet Lee-Sheriff, Chief Executive Officer of Golden Predator.
- High-grade gold results with District-scale potential at the 3 Aces Project (Orogenic Gold Model)
- 2017 drill program presented results of 50.4 g/t gold over 8 meters, 20.15 g/t gold over 6.86 meters and 16.15 g/t gold over 19.3 meters.
- Bulk Sample Program at 3 Aces overall average calculated grade of 46.18 g/t
- Proceeds from bulk sample were US$865,446 for 671 troy ounces of fine gold
- 3 Aces Property recenty expanded through acquisition of adjacent Sprogge property
- 2016 update of positive 2014 PEA with modest CAPEX for past-producing Brewery Creek Mine; new PEA planned to include resource areas not included in the original study.
- Significant upside potential for exploration at both projects.
- Excellent First Nations relations including Socio Economic Accord and exploration agreements with First Nation government.
- Operates under a Class 4 Mining Land Use Permit and has a MOU for Exploration with the Kaska Nation, as represented by the Liard First Nation and the Ross River Dena Council.
- Strong management team and board of directors with years of experience and success, including former Yukon Premier Dennis Fentie and world renowned orogenic gold deposit expert, Richard Goldfarb, Ph.D..
- Strong, supportive shareholder base with long-term investment interest (Eric Sprott; William Sheriff; PowerOne Capital; McEwen Mining).
- Named a TSX Venture Top 50™ company in February 2017, placing 5th of 957 mining companies.
Key Property: 3 Aces Project
Newly emerging Orogenic Gold District with bonanza grade gold
The 3 Aces Project includes 357 square kilometers in the Selwyn Basin of southeast Yukon, along the all-season Nahanni Range Road and 40 kilometers to the south of the Cantung Mine. The property, hosts the territory’s two highest grade surface outcrops discovered to date.
The Yukon Resource Gateway Project Federal and Provincial funding announcement in September 2017 will directly benefit the Nahanni Range Road to 3 Aces with $110 million in upgrades.
Golden Predator’s sampling and exploration work has outlined multiple gold-in-soil anomalies veins over the 13.5-square-kilometer Central Core Area. This structural setting appears to persist along a 35-kilometer trend throughout the property. The best veins are characterized by visible, coarse gold with a low sulphide content consistent with an orogenic vein model.
Gold mineralization at the 3 Aces project is orogenic in nature. Orogenic deposits account for some of the largest gold deposits around the world, such as the California Mother Lode Belt and the Juneau Gold Belt.
The 3 Aces Central Core area consists of a stratigraphic sequence of sedimentary rock affected by regional, low grade metamorphism.
High grade and continuity
In 2015, drilling encountered high grade gold in every hole including 7.5 feet from surface of 158.97 g/t gold. Drilling in 2016 intersected gold in vein in 28 of 31 holes including 11.43 meters of 31.82 g/t gold. Throughout 2015 and 2016, the goal of the company’s exploration work at 3 Aces has focused on establishing the grade and continuity of the Ace of Spades vein. The results have confirmed the high grades of the vein.
“With each successive program we continue to demonstrate continuity of mineralization and expand our working knowledge of the nature of the veins and mineralization at 3 Aces,” said Lee-Sheriff.
Fall/Winter 2016 exploration program
Golden Predator commenced a $4 million exploration program in August, 2016. The objective of the program was to further advance the understanding of the known mineralization on the project and to explore for additional veins on the property. The work included soil sampling, trenching, structural mapping, geophysical work, exploration drilling, bulk sampling as well as road construction and bridge installation.
Systematic trenching and mapping led to the discovery of more than 20 mineralized veins including visible gold mineralization in the new 2.5-meter thick Jack of Spades quartz vein in the central core area. The Jack of Spades vein is located 100 meters east of the Ace of Spades vein and 1,100 meters east-northeast of the Ace of Hearts vein (formerly the Main Discovery Vein). The mineralization at the Jack of Spades is consistent with gold occurrences along and within the Ace of Spades vein.
Channel and grab sampling in 2016 also led to the discovery of the Queen of Clubs vein (67.1 g/t, 91.1 g/t and 111 g/t gold); the Nine of Clubs vein (26.2 g/t gold); and the Clubs Prospect Pit (24.6 g/t gold). “Our team has successfully implemented an exploration strategy for vein identification based on comprehensive trenching and sampling across the underexplored 3 Aces project,” said Lee-Sheriff.
The 2016 winter drill program totaled 4,325 meters, focusing on the previously undrilled Clubs and Hearts zones as well as limited drilling on the Spades Zone. Best results of the program include 32.9 g/t gold over 7.5 meters and 13.3 g/t gold over 39.6 meters in the Spades Zone, and 4.6 g/t gold over 35.0 meters and 16.8 g/t gold over 13.1 meters in the Hearts Zone.
2016 Bulk Sampling Program generating cash flow
Golden Predator completed a 776-ton bulk sampling program in March 2016 which focused on gold-quartz vein material from the Ace of Spades vein which consists of several outcropping targets. Project bulk sample results were released in December 2017. The bulk sample program yielded a total 953.4 troy ounces (29.654 kg) of fine gold from 776 metric tonnes processed and the average grade was 46.18 g/t gold.
671 troy ounces of gold have been sold for proceeds of US$865,446. Of the remaining gold, Golden Predator retained 256 troy ounces on account with the refinery and 19.5 troy ounces in process at company facilities. The remaining 6.9 troy ounces were retained by refiners and smelter for their services.
The reconciliation results from program were processed solely by the Company using conventional gravity recovery methods (crushing, grinding, sluicing and shaker tables). Assuming an average gold content of 8 g/t in the tails, the resulting recovery rate is 83% from a simple gravity recovery circuit. With additional gravity processing using an inexpensive Falcon concentrator, total gravity recoverable gold is expected to be approximately 95%.
“These metallurgical characteristics have important positive consequences for 3 Aces. We can see the potential for low cost, on site, environmentally-friendly processing which could contribute to improved economics and fewer environmental hurdles,” said Janet Lee-Sheriff, Chief Executive Officer. “While the proceeds from gold sales are welcome, the overriding importance of the bulk sample program is the scientific information, especially the understanding of the metallurgy of the high-grade material from the Ace of Spades vein.”
Golden Predator poured a 744 troy ounce gold doré bar in September 2017 from the #1 table concentrate of the bulk sample.
2017 Exploration Program
Golden Predator’s 2017 exploration program at 3 Aces includes ~20,000 meters of drilling which initially focused on the Spades Zone but expanded into the Clubs, Hearts and Diamonds zones. In addition to the drilling, highlights of the summer program included:
- Soil Sampling – Completion of district-wide soil sampling program of 9,377 soil samples covering 103 sq. km. of favourable structure and stratigraphy across the entire property
- Road Construction – Completion of 14.4 km of new roads which provide access into the Diamonds discovery zone and expansion of the road network into the Hearts and Clubs zones
- Trenching – Numerous areas of anomalous gold in soil within the Clubs, Diamonds and Hearts were trenched resulting in the discovery of the King of Hearts and the Jack of Clubs goldbearing quartz veins
- Geological mapping – Mapping was completed in the Central Core Area and in the Euchre, Reef and Hy-Jay areas
- Rock Sampling – 943 rock samples consisting of panel, channel, chip and grab samples were collected with results up to 103.7 g/t gold from a grab sample of gold-bearing quartz vein in float at the newly discovered Jack of Clubs zone
Results from the drilling in 2017 showed significant mineralization. The company intersected grades that included 50.4 g/t gold over 8 meters, 20.15 g/t gold over 6.86 meters and 16.15 g/t gold over 19.3 meters.
The drill program results also confirmed the continuity of the mineralization at the 3 Aces Project, doubling the strike length of the Ace of Hearts vein with 600 meters of continuity, and the extension of mineralization for 340 meters along the Hearts-Clubs corridor. In 2018, the company plans to test the projected extension of the 1.6-kilometer corridor of 1.2 kilometers along trend to the northwest.
“We continue to be encouraged by our drill program results which expand gold mineralization, further support the orogenic gold system, and develop our evolving geologic and structural model,” said Lee-Sheriff. “The Hearts-Clubs Corridor remains open along strike and at depth and we will continue to drill the newly identified parallel structures in the Hearts-Clubs Corridor.”The initial focus of the 2018 exploration program will be to drill wide-spaced diamond core holes into the major shear zones and folds associated with the postulated anticline. This work will begin in the Central Core Area moving along strike and down dip following already identified gold-bearing structures such as the upper and lower shear zones in the Hearts-Clubs corridor.
Property expansion through acquisition
In November 2017, Golden Predator announced that it had entered into a property purchase agreement with Alexco Exploration Canada Corp and Newmont Canada Corp for the Sprogge land claims adjacent to the southern tip of the 3 Aces Project. Discovered in 1996 by Hemlo Gold Mines, the property has seen soil sampling, prospecting and a four-hole 77g-meter drill program prior to 2000. It was acquired by Northern Tiger Resources in 2012 and the company conducted further groundwork that unearthed significant mineralization in gold-bearing quartz veins within areas of anomalous gold. Trench results from this program returned results of 8.5 g/t gold over 6.8 meters and 7.6 g/t gold over 2.5 meters and a grab sample returned 7.1 g/t.
Golden Predator’s understanding of the lithological and structural controls on mineralization on the 3 Aces Project can be directly applied to the Sprogge property and considerably Sprogge’s potential. The Company plans to incorporate the Sprogge claims into its 2018 exploration program and ultimately, attempt to connect the mineralization in the Central Core Area to Sprogge.
Key Property: Brewery Creek
Intrusion-related gold system
The Brewery Creek Project is located 55 kilometers east of Dawson City. The property encompasses 200 square kilometers including a past producing heap leach gold mine. Between 1996 and 2002, Brewery Creek produced about 280,000 ounces of gold from seven near-surface oxide deposits from the property’s Reserve Trend. A network of roads provides year-round access to the property which is also in close proximity to a nearly constructed power line, local labor and airport.
Golden Predator conducted more than $30 million in exploration, environmental baseline studies and pre-feasibility level engineering studies since 2009 and fully acquired the property in 2012. The results of this work show that an extensive magnetic signature indicative of a large complex intrusive center underlies the southern part of the property and is the likely source of the gold mineralized fluids.
Brewery Creek resource estimate
2016 Drill Program
Golden Predator commenced a 1,600-meter engineering and metallurgical drill program at Brewery Creek in July, 2016. The goal is of the program was to acquire material for metallurgical testing from the previously mined Golden, Lucky and Kokanee pits where historic data indicated significant oxide gold mineralization remains unmined. The testing is designed to confirm the in-situ gold grades and expected recoveries for the heap leach process outlined in the 2014 PEA.
In addition, drilling around these pits is was intended to re-establish ground water wells and obtain further geotechnical information needed to complete the new pit designs and permit requirements.
Several shallow drill holes close to the existing pits encountered significantly higher than anticipated gold grades.
- Hole 11 with 8.2 meters of 21.3 g/t gold from 22.2 meters down hole including 5.1 meters of 32.1 g/t gold from 23.9 meters down hole.
- Hole 31 with 17.5 meters of 5.5 g/t gold from 9.9 meters down hole from the north side of the former Lucky pit floor.
- Hole 25 with 5.6 meters of 5.2 g/t gold from 21.2 meters down hole from the eastern edge of the former Lucky pit.
- Composite sample from Hole 24 of two intervals from 25.9 meters to 27.1 meters and 34.2 meters to 35.1 meters assayed 4.33 g/t gold from the northern portion of the former Lucky pit floor.
“We are very pleased with the results of our 2016 drill program at Brewery Creek, it demonstrates the potential for higher gold grades, and shows that significant amounts of oxide material remains in the old pits,” said Lee-Sheriff.
William M. Sheriff, MSc—Chairman of the Board
An entrepreneur and visionary with over 30 years’ experience in the minerals industry and the securities industry, William Sheriff was the founder and previous Chairman and Chief Executive Officer of Golden Predator Corp. Prior to founding Golden Predator, Sheriff was a pioneer in the uranium renaissance as co-founder and Chairman of Energy Metals Corp., and was responsible for compiling the largest domestic uranium resource base in US history before the company was acquired by Uranium One Corp for $1.8 Billion. Sheriff also serves as Chairman of enCore Energy Corp. He co-founded and previously served as Chairman of Till Capital and EMC Metals Corp., and as a Director of Western Lithium USA, Uranium One, Midway Gold Corp., Eurasian Minerals and Starcore International Mines Ltd. Sheriff was also a registered representative, holding positions with A.G. Edwards and Mitchum Jones and Templeton, in addition to having his own securities firm. He holds a B.Sc degree (Geology) from Fort Lewis College, Colorado and an MSc in Mining Geology from the University of Texas-El Paso and owns one of the largest privately held mining databases in the world.
Janet Lee-Sheriff brings 25 years of public, governmental and private sector experience to the role of CEO having served in senior officer-level positions with several public companies. Previously, Lee-Sheriff managed Cabinet Policy and Intergovernmental Affairs for the Conservative, Liberal and NDP governments of the Yukon, developed the Yukon Economic Forums and delivered gold conferences for GATA in Dawson City, Yukon, Washington, DC and London, England. She founded the Yukon Mines Legacy Foundation and the Yukon Gold Mining Alliance. Lee-Sheriff has a long history of pro-actively working with the Yukon First Nations. As founding director of the Yukon Mines Training Association, she secured $20 million in federal funding for aboriginal mine training. She has successfully negotiated and implemented a number of socio-economic and exploration agreements between the company and several Yukon First Nations. Lee-Sheriff is a recipient of the Queen’s Jubilee Commemorative Medal awarded for outstanding achievements by Canadians and is a graduate of Queen’s University.
Greg Hayes, CA—Chief Financial Officer
Greg Hayes, a Chartered Accountant since 1997, previously served as the Chief Executive Officer for Golden Predator Mining Corp. and Nothern Tiger Resources Inc. He also served as the Chief Financial Officer of Shear Minerals Ltd. Hayes brings considerable experience to the Golden Predator Board of Directors from both the public and private sectors. Working with international and Alberta-based accounting firms, he has serviced clients ranging from small, private businesses to multinational corporations. Most recently, Hayes has been providing financial consulting services to junior exploration companies.
Rex Brommecker—Director of Exploration
Rex Brommecker is a PGeo who brings over 25 years of expertise having led international exploration groups, multiple projects, budgets and exploration teams that have made world class discoveries. He previously served as SVP, Greenfields Exploration from 2013 to 2017 and as Chief Geologist, Global Greenfields Exploration for AngloGold Asanti Ltd in 2012. Prior to this he served in Regional Chief Geologist, Exploration roles for Barrick Gold Corporation from 2007 to 2011. He is highly skilled in structural and 3D analysis of ore deposits and has also been responsible for performance management, establishing key metrics to measure exploration success and full oversight of exploration programs.
Some of his achievements include: Managing a global exploration team of up to 400 employees and budgets up to $100 million, held a team leadership role in the discovery of the high-grade zone at Nuevo Chaquiro in Colombia, held a team leadership role in the discovery of the Meliadine gold deposit in Nunavut, acted as an advisor to teams that have discovered significant copper and gold occurrences in Papua New Guinea and Chile, lead teams that have added resources in brownfields environments in Guinea and Australia, and he was part of a team that doubled resources at Reko Diq in Pakistan.
Richard Goldfarb, PhD—Director
Richard J. Goldfarb, PhD, is a globally recognized expert on orogenic gold deposits having served 36 years with the US Geological Survey’s Mineral Resources Program. He is a Research Professor at the Colorado School of Mines; Adjunct Professor, University of Western Australia; and a Distinguished Overseas Professor at China University of Geosciences, Beijing, as well as a private consultant. He obtained his PhD Geology from the University of Colorado and is the recipient of many awards from scientific organizations around the world. He is a Fellow and Ex-President of the Society of Economic Geologists and an Honorary Lifetime Member, Society for Geology Applied to Mineral Deposits. He has senior authored or co-authored more than 225 papers and delivered over 200 presentations in 31 countries.
His expertise and research highlights include exploration targeting of orogenic gold deposits; global metallogeny, with emphasis on temporal/spatial distribution of gold deposits; geology of ore deposits in the North American Cordillera, with emphasis on orogenic gold and accretionary tectonics; distribution and geology of lode gold deposits in China and central Asia; and geochemical applications to the understanding of ore genesis.
Dennis Fentie served as the Premier of the Yukon from 2002 to 2011, having first entered politics in 1996 as the MLA for Watson Lake. He has represented both the Yukon Party and the New Democratic Party during his tenure. As Premier he also served as Minister of Finance, Minister responsible for devolution, land claims and Yukon Energy Corp. and as the Minister of Environment. Fentie’s priorities included rebuilding the Yukon economy, formalizing relations with First Nations and revitalizing the mining industry. During his tenure the unemployment rate in Yukon declined from 9.8 percent to approximately 4 percent, annual mineral exploration expenditures grew from $7 million in 2002 to over $300 million in 2011 and the value of mineral production grew 264 percent. He currently is a private businessman residing in Watson Lake, Yukon.
William B. Harris—Director
William B. Harris is a partner of Solo Management Group, LLC, an investment and management consulting firm and previously served as President and Chief Executive Officer of Hoechst Fibers Worldwide, the global acetate and polyester business of Hoechst AG. At Hoechst Fibers Worldwide, he managed the $5 billion operation, comprised of 21,000 employees and production locations in 14 different countries. Within Hoechst AG and its subsidiaries, he held various positions, including Chairman of the Board of Grupo Celanese SA, a publicly traded company in Mexico with sales in excess of $1 billion, Vice President of Finance, Chief Financial Officer, Executive Vice President and Director of Celanese Canada Inc. a publicly-traded company in Canada and was Vice President, Treasurer and Chairman of the Audit Committee of Hoechst Celanese Corporation. He also served as the Chairman and Executive Committee member of the American Fiber Manufacturers Association.
Harris is a graduate of Harvard College and Columbia University Graduate School of Business. He is a Director and member of the Audit Committee for enCore Energy Corp and Chairman of Scandium International Mining Corp. He previously served on the Board of Directors for several public companies including Gold One International Limited, Potash One Inc, and Energy Metals Corporation.
Bradley Thiele, a Professional Engineer, is an independent mining consultant with over 45 years of extensive industry experience. He served as Vice President of Project Development for the Meadowbank Gold Project of Cumberland Resources Ltd. from 2002 until 2007, through the acquisition of that company by Agnico-Eagle. Thiele’s broad range of expertise includes underground and open pit designs, development, operations and engineering throughout northern and western Canada, providing services to Newmont Mines, Pioneer Metals Corporation, United Keno Hill Mines Limited, Minnova Inc., Fairfield Minerals, and Placer Group. He obtained his B.Sc in Mining Engineering from the University of Saskatchewan.
Tony Lesiak is Managing Director and Global Head of Mining Research for Canaccord Genuity Corp. (Canada). He is responsible for coverage of the Canadian large capitalization precious metal equities and has been researching the metals and mining sector for 20 years. Prior to rejoining Canaccord Genuity in September 2013, he was Managing Director and Senior Mining Analyst at Macquarie Capital Markets. Lesiak was a Principal and Senior Mining Analyst at Genuity Capital Markets from 2007 to 2010 and previously held senior positions in mining equity research at UBS (Toronto) and HSBC (New York and Toronto). He earned a B.Sc in Geology and an MBA (Rotman) from the University of Toronto and holds an International MBA specializing in Economics from Johannes Kepler University in Austria.
Stefan Spears has over a decade of experience as an executive in the resource exploration and mining industry. He began his mining career at Goldcorp in 2002, and in 2005 joined McEwen Capital Corporation to focus on resource sector investments. In 2008 he joined McEwen Mining as Vice President in charge of U.S. Projects. After successfully founding Coreprint Patterns Inc., an innovative sand casting pattern manufacturer whose repeat clients have included several multi-national corporations in the mining and industrial sectors, Spears rejoined McEwen Mining to address Special Projects with a focus on corporate development and to tackle technical challenges in operations. He has experience in gold exploration in Canada, USA and Mexico, and was involved in raising over C$400 million in equity capital for exploration and development projects. Spears holds a B.Sc. degree in civil engineering from Queen’s University. He is also a board member of Inventus Mining Corp.
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