In the Shadow of the Head Frame
“… it’s a good idea to look for more gold in places where gold has already been found…”
Joe Campbell, TerraX
Since the acquisition, TerraX has discovered previously unrecognized deposits. “We began our exploration out of the Northbelt, in a particular geology—the mafic volcanics—which had received the lion’s share of the historical exploration, and rightly so,” says Campbell. It’s where the ore mined at Con and Giant was hosted. “But we began to see significant mineralization in the other rock types in the belt, specifically the felsic volcanics and the sediments. We made a discovery in the sediments called the “Mispickel deposits” that woke us up to the fact that there were plenty of opportunities in those sediments that hadn’t been recognized.” So they staked a large block of ground next to a major crustal break and explored it intensively over the summer 2017 with some success. Campbell now views the project more as a district than a hunt for individual deposits.
Going forward, they’ll be digesting the summer exploration data, and planning a drill program for January that is budgeted for 12,000 metres of drilling.
Less than 200 km northwest of Yellowknife, another gold project is taking shape in the shadow of another bankruptcy – the Colomac mine.
Colomac operated between 1990–1992, and 1994–1997, first by Neptune Resources Limited, which had little success with mine profitability. Royal Oak Mines Inc re-opened it in 1994, but due to low gold prices and high mining costs, Royal Oak entered receivership in April 1999 and the site reverted to Aboriginal Affairs and Northern Development Canada (now Indigenous and Northern Affairs Canada) for remediation. That project concluded in Fall 2011.
“Colomac was known as low-grade, but I started looking and thinking there is lots of grade in this camp and it’s dispersed all over in different deposit types,” says Michael Byron, president and chief executive officer of Nighthawk Gold Corp. Byron has previous experience identifying such opportunities from his time with Lakeshore Gold and Falco Resources. “So in 2010, I said let’s stake the entire camp.” At the time the mine was still under remediation so he approached the federal agency responsible. “About a year later they contacted us about formulating a deal,” says Byron. By then, Nighthawk had staked everything in the camp, completely surrounding Colomac.They bought 100 percent of the mine and all the claims that were part of it in 2102. Any liabilities of the reclamation stayed with the crown.”
They found there were still over a million ounces left in the deposit. “The key factor (the previous operators) had missed was they didn’t know the geological model they were working with and that’s critical to any exploration,” says Byron. “Because you can then look for analogs around the world that have a history of mining and you can borrow and read the characteristics of that deposit and transpose it onto the one you are working.” He says after the very first hole Nighthawk drilled in 2012, they knew it was a differentiated mafic sill hosting gold, analogous to the rich Kalgoorlie camp in Australia.
“So from ‘15 and ‘16 onward we knew we had something to tell us that Colomac was more than a low-grade, open pit shallow resource, which it is, but these higher-grade domains also open up the possibility that you can ramp into the system.”
The advantage to hunting in the shadow of the headframe? “Finding things that others didn’t,” says Byron. “Not because they’re stupid, but often it’s the economics of the day, or corporate strategies.”
Three hundred kilometres east-northeast of Yellowknife, in the shadow of Gahcho Kué, the world’s newest diamond mine, sits the Kennady North Project. This one has some of the same ingredients as the other mines — infrastructure, new discovery potential, a good point in the commodity cycle. However, the one major difference is there is no associated bankruptcy. It was formed in mid-2012 as a spinoff from Mountain Province Diamonds Inc., itself a partner with DeBeers in Gahcho Kué.
Rory Moore, Kennady’s new president and chief executive officer, is no stranger to diamonds in the North. “I was involved as a consultant prior to the discovery of diamonds in the NWT,” he says. “And was involved with a partner in advising Chuck Fipke.” Moore also managed the Ekati project through to its feasibility study.
He figures Kennady’s location is a natural. “If you look at the map and see the kimberlites that have commercial diamond potential they follow that trend which we call the Kelvin-Faraday Corridor.” That corridor is a NE-SW structural feature that includes the Faraday and Kelvin kimberlites, and continues to the SW to include the Gahcho Kué kimberlites. “It is definitely a structural zone where high-grade kimberlites have erupted along,” Moore says. Six kimberlite bodies have been identified within the Kelvin-Faraday Corridor to date.
“Our first focus was Kelvin which we did last year and the focus this year is to get the Faraday into a resource,” says Moore. Faraday looks promising so far (See page 13). The 2017 bulk samples sent to WWW International Diamond Consultants in Antwerp for valuation revealed a collective average value of US$109 per carat and included a 7.78 carat diamond valued at US$2,967 per carat.
Moore reckons production costs will be similar to those at Gahcho Kué, roughly $55 a tonne, although the kimberlites are more unconventional. Gahcho Kué bodies are the typical carrot shape, but Kennady’s are smaller and more tubular. Preliminary mining studies suggest using a box cut style or open pit with steep sides on the back wall and the two sidewalls, Moore says. A smaller pit will need corresponding sizes of equipment such as smaller articulated vehicles to handle tighter switchbacks.
Moore sums up the advantages Kennady gains by shadowing Gahcho Kué. “Lots of companies have been successful with the theory of ‘close-ology’,” he says. “With it, you’ve probably got a better chance of finding something yourself.” Moore says Kennady benefits from two other positive circumstances — its proximity to Gahcho Kue is a result of its spinoff from Mountain Province, and Kennady’s land holding essentially surrounds the Gahcho Kué mine, so there’s a good chance any exploration that may lead to an expansion will happen on Kennady property. “From our perspective that is very attractive,” says Moore, “because the hurdle for actually achieving an economic deposit is significantly lower if you’ve got all the infrastructure in place right next to you.” MN