Barkerville Gold Mines Announces 10.6 million oz Gold Resource at Cow Mountain Near Wells, BC

Over almost two decades, Barkerville Gold Mines (TSXV:BGM) and its last incarnation, International Wayside Gold Mines, have assembled and explored their extensive 1,177 sq. km land package in the Cariboo District of British Columbia. With gold production underway at one small operation and permitting just acquired for another, Barkerville has raised some eyebrows with this massive 10.6 million ounce NI-43-101 compliant resource announcement. In addition, the independently written report states that there is a Geological Potential to find an extra 65 to 90 million ounces of gold within the 6.4 km long Island-Cow-Barkerville Trend.

The Cariboo Gold Belt has had a rich and extensive history starting with the discovery of placer gold in the 1860’s. Recorded production from Barkerville Gold Mines property and surrounding area is approximately 2.6 million ounces of placer gold and 1.2 million ounces of lode gold during the period 1933 to 1967.

This new NI-43-101 compliant indicated resource was completed by Geoex Ltd. and incorporates the past producing underground Cariboo Gold Quartz gold mine as well as surrounding mineralized areas on Cow Mountain.

The resource spans 1,000 ft. of elevation from 4,550 to 3,550 feet above sea level to encompass the rock formation that hosts most of the gold mineralization along a 3,200 ft. strike length. The nearby town of Wells lies at an elevation of 4,000 ft.

Indicated resources weigh in at 69 million tons averaging 0.154 ounces gold per ton, (or 5.28 grams/tonne) for 10.67 million ounces of contained gold. This is an undiluted resource estimate, which means it does not take into account any waste rock surrounding or in between the currently defined mineralized zones that make up the 10.67 million ounce resource. More drilling will be required to determine whether the “waste” rock within the current resource can be turned into additional resources. The resource also does not account for any strip ratio associated with accessing the mineralized zones. Strip ratio refers to the amount of waste rock that must be moved to access the resource itself.

The Cow Mountain resource is based on a proposed open pit mine scenario on Cow Mountain that incorporates the Rainbow, Sanders and Pinkerton zones of the old Cariboo Gold Quartz mine plus newly discovered mineralized areas within, beneath and around these historic zones.

This impressive resource was based on the compilation of over 7,100 drill holes totaling 347,000 metres completed by Barkerville Gold Mines and previous operators. The most significant drill results came from an expanded drill program completed last year.

Historic underground production from three mines was sourced from high grade vein structures within rocks known as the Rainbow Unit, but many of the mineralized zones were too narrow to be mined economically. Historic production is highlighted in the following table.

The Rainbow Unit can be mapped along strike from these mines for 8 km and has been traced for another 16 km to the south. All three historic mines are developed in this same rock unit and the mines extend to a certain degree under the valleys between three neighbouring mountains; Island Mountain, Cow Mountain and Barkerville Mountain. In addition, gold mineralization is similar in each mine and it remains open for expansion along strike and to depth from the historic underground workings. As a result, Barkerville Gold Mines asked Geoex Ltd to make conceptual Geological Potential Estimates.
These estimates are conceptual in nature which means there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the delineation of additional mineral resources.

Geoex Ltd estimates that the total Geological Potential of the Island-Cow-Barkerville Trend (6.4 km long) is 405 to 684 million tons with a grade range of 0.12 to 0.16 oz/ton (4.11 to 5.49 grams per tonne). This works out to 65 to 90 million ounces of potential gold mineralization.

This was done by estimating the additional potential around each historic mine site. At Cow Mountain, Geoex Ltd estimated an additional 7 to 10 million ounces with similar grades extending another 1,000 ft. under the new resource. At Island Mountain, a similar open pit and underground scenario was assumed based on twice the potential strike length. This added 29 to 40 million ounces. Finally, at Barkerville Mountain, Geoex Ltd used the same open pit and underground scenario as it did at Island Mountain to come up with its final 65 to 90 million ounce estimate.

Bottom Line

Barkerville Gold Mines has tabled an impressive 10.67 million ounce resource at its Cow Mountain project in the Cariboo Mining district of British Columbia. It has also shown there is excellent potential to expand its resources by assuming similar open pit and underground development scenarios around neighbouring historic gold mines on its property that are all hosted in the same gold bearing rock unit.

However, keep in mind this 10.67 million ounce resource currently contains more waste rock than mineralized material (67 million tons of gold mineralization and 101 million tons of waste). With further drilling more of the “waste” could be turned into resources. Nevertheless this waste rock could still dilute the grade of the resource significantly if it can’t be separated. Another factor that will significantly affect the economics of the project is the strip ratio. The current estimated strip ratio of the open pit scenario is as high as 10 to 1. This means for every ton of ore mined they will have to move up to 10 tons of waste rock. This does not include the waste in the resource itself.

A significant amount of drilling, engineering studies and metallurgical work still need to be performed in order to prove this massive resource can be turned into a viable mining operation. Since the mid 1990’s Barkerville’s president and CEO, Frank Callaghan, has focused his efforts on the exploration and development of the company’s gold projects in the Cariboo District. He sums it up in a statement saying it “is a testament to the team we’ve assembled and 18 years of hard work and perseverance.”

Thomas Schuster, Analyst Bio

With a degree in Geological Sciences from the University of Toronto, Thomas started his career in the 1990s as an exploration geologist in the famous Timmins mining camp in Northern Ontario. He then moved to Vancouver and took a position as staff Journalist at the well-known mining publication, The Northern Miner, reporting the merits and shortcomings of Canadian exploration and mining projects worldwide. This built a foundation for his later work as a Mining Analyst for the Toronto-based institutional investment firm, Fraser Mackenzie. Thomas is currently based in Vancouver working as an independent mining analyst.