Executive Chairman Gerald Panneton discusses Gold Terra’s (TSXV: YGT – OTC: YGTFF – FSE:TX0) completed phase 1 drill program at its project immediately adjacent to the high-grade former-producing Con Mine (5+M AuOz) outside of 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. Gerald said that this phase 1 program confirmed the extension and continuation of the Con Mine’s mineralization onto Gold Terra’s optioned property and was thus successful. Phase 2 drilling of 10,000 metres will begin in July and will produce drill result news flow consistently from August into the fall.
Sign up (on the right side) for the free weekly newsletter.
0:35 Phase 1 10,000m drill program completed
3:45 Was phase 1 successful?
4:53 Covid a hindrance at all?
6:47 Cost of drilling
8:25 Results of phase 2 Aug-Nov
9:05 30,000 to 40,000m winter drilling
9:37 Gold sector M&A
13:10 Bitcoin or gold?
Bill Powers: Thank you for tuning into Mining Stock Education, I’m your host Bill Powers and joining me today is executive chairman Gerald, Panneton of Gold Terra Resources Corp, one of our sponsors. Ticker symbol is YGT in Toronto and YGTFF in the States. Gerald, welcome back onto the program. We’ve been talking about how you are engaged and have just completed phase one of a drilling program South of the Con Mine outside the city of Yellowknife. Now the Con Mine, for listeners that aren’t aware, produced about five to six million ounces, historically, of high grade gold and Gerald optioned this project from Newmont and believes that they can discover the extension of the Con Mine. So a 10,000 meter program. Phase one was just completed. Please walk us through this program Gerald. What are the results and what is the significance that investors should know at this point?
Gerald Panneton: Thank you very much, Bill, for inviting me on. We’re very happy with the first program. The first phase was basically… There’s been no drilling for the last 30 years along the strike line of the Campbell Shear. And as you mentioned, Campbell Shear five million ounces, an average grade of 15 grams, or a predecessor of Newmont on the Con Mine, which shut down in 2002-03, approximately. And when gold price was very depressed. And there’s still a good resource on the Con Mine, the project now is under liability, but the Campbell Shear is a structure that is 70 kilometers strike length. And immediately to the South, there’s been some resource outlying. And as you can see on the long section and on the mapping that shows… The surface map, which shows the drill hole location we did, we did 13 holes this past winter, and we’re going back in July.
So phase one was to outline the Campbell Shear, which is sometime 100 to 300 meters in width, and sometime has militarization. And sometime it doesn’t have some, but the moment you have, even with our last person leaves this week, like 1.3 grams per 10 meters in the Campbell Shear. You know you’re in the right place. It’s just that you need to drill more. For example, some of our first holes on Yellow Wrecks deposit in the coach meeting, which will be the target when we go back in July, mainly. We have 15 grams over five meters, 11 grams over four meters. That’s exactly what the Campbell Shear was all about. It’s four, five, six meters in width, goes to almost one gram over 10 meters, 100 on strike length. So these are pods they’re they’re lenses that pinch and swell and the integrity of the Campbell Shear there, it’s just if you’d need to drill more. And that’s exactly what we’re planning to do with phase two, another 10,000 meters and hopefully with a much bigger program next winter, but we’re at the right place. Campbell Shear is there, globalization is there and we just need to drill more.
Bill: From your geological vantage point, did you get the information that you were looking for in phase one to a plan out phase two?
Gerald: Definitely, the indication you can see it on the long section in the last press release or the one on Yellow Wrecks that we did about a month ago. Exactly. That we are… We know where the Campbell Shear is, we know its behavior, we know when the globalization is there. There are some ingredients such as the series that take alteration, the presence of gold. And when we have quartz veining, smoky quartz, usually we have higher, great mineralization and that’s it’s all about. And we’ve looked at all the level of plan of the Newmont Mine. We’ve compiled them. We’ve looked at the geology. In the mind itself, you go from one gram to 10 meters, you move 25 meters and you hit 15 grams over 10 meters or seven meters. This is exactly the same mineralization pattern or structural pattern… Behavior that was at the combine on the Campbell Shear is on the Newmont property South of the Con Mine that we are currently drilling.
Bill: So the plan I understand is to drill another 10,000 meters. With COVID… How is the COVID situation in Yellowknife? And could that pose a hindrance to what you want to accomplish?
Gerald: We have been extremely lucky. We started the program before the pandemic started. We were able to finish our program. At the end of April, we went back mid August, last summer, drilled pretty much all winter. Yellowknife is a city of about 25,000 people, 25, 30,000 people. And it lives a lot from tourists and from the mining… The diamond mining industry in the Northwest Territory as a platform to service them.
In reality, Yellowknife is pro-mining. It’s essential to do exploration. It’s essential to do mining because all the jobs depends on that. And basically we just follow the protocols. If most of our people are in town… Live in town, our technical team, except 1% that comes from the outside. And we run a very, very lean… Because before I joined their average cost was $275 Canadian per meter. And now we’re drilling for $200 per meters, all in. So we’ve really came down, becoming very lean about what we’re doing. And next phase program should be more exciting the first one. The first one we were trying to line up the Campbell Shear over almost two and a half kilometers of strike length. So we were drilling every 200 meters trying to position the Campbell Shear and its mobilization. Now we’re going to be focusing on more on Yellowrex, where we had the best result. And also closer on where we think that we should be able to identify a high-grade nemesis.
Bill: Gerald, so you haven’t seen your cost of drilling go up then? Because everything around me, housing, food, where I’m at, everything is going up, but your drilling contractor, isn’t sending you an inflated bill for phase two drilling?
Gerald: Well, as long as you don’t buy any wood, you’re fine.
Bill: Or soy beans or corn.
Gerald: That’s right. Well, the fuel is… It is what it is. So there may be a change in new fuel because a year ago we were at $40 a barrel, and now it’s $65 a barrel. So there’s always like a hit on the fuel. But at the end of the day now, we are using the same contract that when I started in November, 2019, and it’s the same contract with the same contractor. People respect a quarantine. Of course, it’s easy for people to work because you cannot just go. You’re being quarantined. You arrive in town. And if it’s a shift change for six week and you’re going to have the same driller for six week, then these two guys, they go to their room. In the first two weeks they have to have their food delivered to their apartment.
So everybody is respecting the protocol and we are able to work and we’re going back in early July. For the next phase of drilling and we look forward because this should be a lot more exciting than the past one. The past one was our first pass. We needed to make sure that we identify the Campbell Shear, we know where it is. Now, this time around holes will be shorter, tighter, and we’re going to ensure to have a lot more mineralized intercept.
Bill: So if you start drilling in early July, when should we start expect seeing results?
Gerald: Usually this hasn’t changed. We still are bound by six weeks from the moment, basically, we finish a hole, we log it, we send it to the lab. It’s a four to six week delay. So, we should start seeing resolved by the end of August.
Bill: And then all through October, maybe?
Gerald: August through Oct- September, October, November. 10,000 meters with one rig will take us approximately four months. And we’re not going to stop drilling from about July all the way to mid November. Then we’re going to take a break again, build our ice road, and hopefully with better funding in the fall, with good result, we look to maybe 30 to 40,000 meters of drilling next winter.
Bill: At the same Con Mine extension?
Gerald: Probably. It depends on our success, of course, it depends on how much money we can raise. But if you asked me “how about what you do next winter?” And I would say, if I raised the money for 40,000 meters of drilling, next winter, we’ll do it. We have some extension of the Sam Otto that we can do, but the main target will remain the Campbell Shear.
Bill: And Gerald, we’ve talked in the past that because of your experience at detour, you know how to build a mine, you have the flexibility to move the project forward into feasibility and beyond or sell it. In regards to selling, there’s been some M and A action, some all cash transactions. What is your current observation and commentary on what’s occurring in the Merger and Acquisition space within the mining sector?
Gerald: Well, everybody has an interest in growing their company. For us, growing the company is finding more ounces. My target on the Campbell Shear is 1 to 2 million ounces of high grade mineralization. It’s out of the Con Mine. And I think this is achievable. Now we have 1.2 million ounces at Sam Otto and Crestaurum. So you combine that together; 20 million ounces becomes really attractive because it’s size. It’s about size 10 years of production, 150,000 to 200,000 ounces a year. You know, this is something that becomes very valuable for any company. Building an underground mine is not like building Detour. I was the founder and CEO of Detour inception all the way through our first year of production in 2013 and building a big mine like Detour is… It’s a heavy lift, especially for a junior. Think about it, I raised $2.6 billion over the course of my time at Detour.
And $1.5 billion or 60% of that money went into building the mine alone. And I still remember having to raise money in 2015 when gold price went down from 17 to 1100. Now we have a great timing goal is approaching $1,900. Again, we know very well, and we can talk a little bit about what I think about gold, but gold is always going to remain the safety that for any investor in the world. And at the end of the day, if M and A… And M and A usually is interesting. When gold price goes up and then M and A goes up. In reality, M and A should be strong when he price of gold is lower because it’s cheaper, but people are worried. So they just start buying only when the gold goes up. My job is to create value for shareholders. I personally, our family owns, 5.3 million share of Gold Terra.
We are very excited about working in Canada, in Yellowknife, with infrastructure. We don’t have to bring people in. Everybody goes home at night. It’s very, very important. And the cost of underground mining when you’re already in town is a lot better than going in 200 or 300 kilometers away from town. You think about… I still remember building Detour and being compared with Canadian Malartic and Osisko. And I could never come up with the same numbers as Osisko because Osisko is in town. Everybody goes on at night. It’s such an advantage. Nobody realize how important it is, to be in town. So the… I think 3 million ounces in a town… It will be a very good and nice achievement and maybe more, I think I’m very open to find a lot more because of our land position and because of potential that lies in the Campbell Shear and what has been done. So remember, 14 million ounces produced so far and the Campbell Shear is open North and South.