Executive Chairman Gerald Panneton discusses the completion of the company’s drill program at the Crestaurum deposit and its significance for Gold Terra (TSXV:YGT – OTC: YGTFF – FSE:TX0) moving forward. One hole at Crestaurum hit an impressive 9.60 g/t gold over 4.5 metres. Having worked for 12 years for Barrick Gold Corp., Gerald talks about how a major gold miner would view Gold Terra’s current results and what Barrick wants to see in a gold project they would potentially acquire.
Gold Terra also just launched a 12,000-metre drill program immediately adjacent to the high-grade former-producing Con Mine (5+M AuOz) just outside the city of Yellowknife in Canada’s Northwest Territories. Gold Terra recently acquired an option on this property from its owner Newmont. The Con Mine produced approximately 5.1 million ounces of gold between 1946 and 2005 at an amazing grade of 15 g/t, and over widths of up to 100 metres. In this interview, Executive Chairman Gerald Panneton provides an overview why this up to 20 drill hole program is so prospective as well as discusses the first batch of results from the Crestaurum deposit on the company’s Yellowknife City Gold Project.
Sign up (on the right side) for the free weekly newsletter.
0:46 Crestaurum shear drill results
4:12 How would a major miner view these results?
7:47 What Barrick looks for in a gold project
10:53 Campbell shear drilling ongoing
Press Release discussed in this interview:
Bill Powers: Thanks for tuning into Mining Stock Education. In today’s show, you’ll be hearing from executive chairman, Gerald Panneton from Gold Terra Corp. And in our previous interviews with Gerald, we’ve been talking about how Gold Terra is pursuing five plus million ounces of high-grade gold, primarily via two shear zones. One is the Crestaurum shear zone, and the company just completed a drill program there which we’re going to talk about and get Gerald’s insights and feedback on. And then also the Campbell shear which is a program that is just about to be commencing. So Gerald, welcome back onto the show. Bring us up to speed on the Crestaurum results. What’s the significance here and what does this mean going forward, please?
Gerald Panneton: Thank you Bill, for having me on your show. And welcome to everybody who’s going to be listening to this interview. Yes, recently we just completed approximately 8,000 meters of drilling which is almost 25,000 feet of drilling on our Crestaurum shear. The Crestaurum shear was a target identified in the past which had a resource of about 200,000 to 250,000 ounces near surface, high grade mineralization.
And as you can see on the long section that will be shown during the interview, you can see that everything that is in purple on the long section is somewhere between 30 to 60 grams or one ounce to two ounce per ton over three to four meters. So the g/t, the grams times thickness, is very good from surface down to about 200 meters.
The deposit was never explored at depth. In all those years that TerraX before Gold Terra, the deposit was never explored properly at depth. And the belief was that the deposit was also cut off to the south by a fault called the Daigle Fault. So our program was aiming at testing at 400 and 600 meters, or basically roughly 1,400 feet and 2000 feet deep, the Crestaurum shear zone.
The shear zone is only two to three, four meters in some instance. And we intersected the shear in every hole at depth, no question. The shear zone was right there, but they were lacking quartz veining. And what was missing with those quartz veining was the gold fluids. The gold in the quartz vein not being there or result at depth are mitigated. They’re good technically but they’re not good to pursue.
So we basically close off the depth extension below this area of the Crestaurum. But the Crestaurum shear is probably 10 kilometers in strike length. We’re looking at one and a half kilometers of strike length. So now we just reopen it to the south because the Daigle Fault is not a fault that cuts off the deposit. And the proof is in hole 57, for example, and also the hole that we did on the other side. They are definitely showing continuation of the shear zone, 43 grams over one meter.
And of course a couple of holes that we did as well were infield drilling were very good, such as hole 103 were intersected 9.5 g/t over 4.5 meters. So now that we know that there is no depth extension, more likely Crestaurum will become more of an open pit target, a shallow open pit target, maybe down to 200 meters. Maybe the potential is more like half a million ounces versus one or two million ounces. So it’s a smaller target, but having a high grade deposit, open pit as a satellite to a main deposit is valuable. There’s no question that Crestaurum one day could be mined, but it’s not going to be the cornerstone of our company, which always been my target was the Campbell Shear. And we can talk about that a bit later.
Bill: So with the results that have come back just at the conceptual level now, if a major miner is looking at the projects you’re developing, how would they interpret this relative to the big plan of what you’re trying to accomplish? Would they see value now, or you have to come up with that two, three million ounce pit before they would really see value in Crestaurum?
Gerald: I worked for a major for many years. I can easily answer that question. I worked for Barrick Gold for 12 years. I can tell you that unless it’s three to five million ounces, and look at the deal we signed with Newmont on the Con Mine exploration. We have a back end right of Newmont if the deposit is five million ounces. No major will look at the Crestaurum deposit as… They will look at it like I’m looking at it. My eyes have always been… We need to have a deposit that can sustain its own development. Crestaurum now is more like a satellite deposit unless it goes over a million ounces, then a small junior like us could develop the Crestaurum deposit if we get to a million ounces.
But there’s a threshold to be able to invest money. We usually say we need 10 years of production. We need to make enough money. When you capitalize a project, a million ounces will allow you to spend maybe a hundred million dollars to develop a mine. Not much than that. When I built Detour Lake, we had 16 million ounces and the project cost one and a half billion. So a hundred dollars an ounce, correct?
Gerald: So that’s how you look at depreciation and that’s very, very important. So no major would be excited about Crestaurum. However, it’s still a very profitable high grade open pit potential, shallow, rich and doesn’t require big equipment and could be easily a very nice sweetener to a meal on an underground mine, because you can get the ton much more easier out.
And don’t forget, it’s open. Crestaurum can link to Barney further north, which is another deposit on our property. And also further south it’s continuing all the way to the Akaitcho Fault. So there is a 10 kilometers span that needs now to be paid attention near surface. The good news near surface, cheaper drilling. Easier to drill, much faster and much less expensive. And don’t forget, we’re doing very good now.
The company used to drill almost $300 per meter. We’re now sitting with all the change we made this year, our drilling cost is about $200 a meter Canadian. We’re in town. That’s the big factor. But we’re not big enough as a discovery to interest or turn the eyes of a major for sure. But with some other low grade, with Crestaurum high-grade open pit, we’re probably going to get over a million answers very quickly with the program we did this year. So there’s good news. Our resource that used to be three quarter million ounces, 735,000 ounces, is probably well over a million ounces now. And that’s the good news about our program. And now our focus is now moving on to our Campbell shear target.
Bill: Gerald, before we get to Campbell shear, on the idea of what Barrick is looking for since you worked for Barrick, Barrick has been on record saying they want to buy assets that produce at least 500,000 gold ounces per year for 10 years in the lowest core tile of the cost curve. Would you define that as a world-class project? And what’s the difference between a world-class project and a tier one asset that someone like a Barrick would look for?
Gerald: When Barrick talks about it’s target of half a million ounces a year is that, and I’ve always… When I was working at Barrick, we were producing north of eight million ounces. Now they are somewhere around five. So is Newmont and as you know, Newmont is our partner on the Newmont ground on the Campbell shear. Half a million ounces a year, 10 years is five million ounces. So when we said threshold about what would interest a major is a five million ounces deposit. No question.
The other thing about tier one operating costs, which means where is it the cheapest way. So there are two things, you can live with political risk and mine in Africa or in Indonesia or in different parts of the world, or you can stay in a more nonpolitical place. Nevada and Canada are still two of my favorite target because there’s no risk of unrest as much, but it’s more expensive.
But at the same time, because our projects are in town, in the city of Yellowknife, everybody goes home at night and that’s the advantage of Gold Terra is that if we deliver three to five million ounces over the next two years, you have to give us a bit of time. Now we just went through two targets. We just did almost 20,000 meters of drilling in 2020. Sam Otto is still open but it’s low-grade. Crestaurum is still open, high-grade open pit, but shallow, no depth extension.
We’re already over a million ounces so my chances on Campbell shear is that even if I just find one or two million ounces, I will be a three million ounces company. A three million ounces company give a hundred dollars an ounce. That’s a $300 million market cap. You can evaluate that. And some company gets way more than a hundred dollars an ounce per evaluation. You have to look at the cost of operating all in, which usually is between a thousand to 1100. And when Barrick talks about tier one, he talks about property that can deliver gold below a thousand dollars, but very few do that. It’s very hard in today’s world to get better. And if you’re in Africa, for example, yes, you can probably have lower operating costs, but you have a much higher risk if there’s unrest like we saw in Mali this year for example.
Bill: So your five plus million ounce potential, the next step of that is on the Campbell shear. The drills are turning there, aren’t they?
Gerald: We just actually completed two holes. The drill is just stopping for Christmas now. We are taking a month break. We have been drilling nonstop since mid August. Usually we do a Christmas break and a spring break, which usually is in mid May… Month of May, usually, is our spring break because of ice melting and things like this.
We’ve been starting to work on the Newmont claim. We did the first two hole. They were technically very interesting geologically speaking. And in January, we’ll be starting our major program, which is about 20 hole, 10,000 meters on the Campbell shear as per the press release we did in November. If you look at the press release there is a very important long section because what it shows is the footprint of a five million ounces deposit, which basically is one and a half kilometers long and one kilometers deep.
So you know the footprint is roughly two square kilometers and it supports them. So now that’s our job to repeat that potential of five million ounces along the Campbell shear, which we control for the next 14 kilometers to south, 14 to 20 kilometers to the south and the potential is there. There’s a lot of surface mineralization outlining the Campbell shear from surface down to 300 meters, a couple of hole at a thousand meters, three grams over 12 meters. The shear zone is there. So it’s not a question is it there or not? We know it’s there. We just need to drill and drill. And that’s our program for this winter so we should have tremendous result in Q1 2021. Result always tell you if… We know, geologically speaking, that we hit the target. We know that because visually we can see it, but you always have to wait for the assays.
Bill: And have they been sent to the labs already? The first holes?
Gerald: They should be sent before Christmas and the results should be coming out sometime in January. We still have 10 good holes coming out of Crestaurum as well in January. And we firmly believe that the Campbell shear will generate results because we’re drilling below two small deposits that were outlined by Miramar and Cominco in the past so it’s not like we’re drilling in the fog. We’re not. We’re drilling a very specific target that has already been outlined as a resource. And you can see it from the long section. You can see it very well on the long section.