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The Mining Report: Who's Next?

The Mining Report: Who's Next?

Keep an eye on these junior exploration companies. PLUS: Holding pattern: Tough markets slow down advanced projects
By Herb Mathisen
Nov 03
2015
From the November 2015 Issue

THE GOLD STAR

TerraX Minerals: Yellowknife Gold Belt Property

“Now where did I put my coffee?” That’s what one prospector asked this summer while doing sample work out at TerraX’s Yellowknife Gold Belt property, just north of the city. She scoured the quartz-veined rock around her and locked in on her red paper cup, a few metres away. She looked around and… EUREKA! There was her coffee, perched on top of a visible vein of gold. Such is the story behind TerraX’s “Timmies Vein,” which turned in some grab samples with 88.6 grams per tonne of gold.

It was a summer full of discoveries, as the company continued to explore its 99.3-square-kilometre property and drill out its most promising deposits—the Barney Zone and Crestaurium, both within its Core Gold Zone. It also staked out an additional 16.7 square kilometres in the Yellowknife area, just south of the old Con Mine. And with its recent technical partnership and $2.5 million investment from New Osisko—the company that built the Malarctic mine in Quebec, one of the largest gold mines in Canada—TerraX’s future appears golden.

IM-PORT-TANT BOOST

Peregrine Diamonds: Chidliak

It didn’t come as a surprise to CEO Tom Peregoodoff, but he says this summer’s announcement of a deepwater port for Iqaluit was certainly welcome news for the company, which hopes one day to build a diamond mine 120 kilometres northeast of the Nunavut capital. The addition of a port, which would facilitate the transport of goods and equipment to build and operate any future mine, would no doubt factor positively into Chidliak’s econoimcs. A preliminary economic assessment is expected in the second quarter of 2016, which will include results from the $3.75-million summer drilling of its two core kimberlites (CH-6 and CH-7). Those drilling results should be out this month. To date, Peregrine has an inferred mineral resource of 8.57 million carats with its CH-6 kimberlite.

BEST FOOT FORWARD

Kennady Diamonds: Kennady North

Kennady Diamonds is going to spend the next year showing the world what it’s got up at its Kennady North property, straddling the northwestern border of the Gahcho Kué mine, 280 kilometres northeast of Yellowknife. It wants to put together a mineral resource statement on its most promising kimberlite, Kelvin, by the end of the year. (Results from its 440-tonne bulk sample turned up an average of 2.0 carats per tonne.) That resource statement will be followed up by a preliminary economic assessment early in 2016 and a feasibility study by the end of the year.

MINER MILESTONES 

Sabina Gold and Silver: The Nunavut junior developing the Back River gold project in the Kitikmeot region released a feasibility study this fall that looked at two scenarios: a 6,000 tonne per day operation and a 3,000 tpd mine. The latter would produce nearly 200,000 ounces of gold each year for 11.8 years and cost roughly $415 million to build.

Wellgreen: The Yukon miner released a positive preliminary economic assessment for its platinum-palladium-gold project, north of Burwash Landing, Yukon. It’s now drilling out priority areas to put together a pre-feasibility study.

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Holding Pattern: Tough markets slow down advanced projects

Avalon Rare Metals: Nechalacho

After spending more than $100 million since 2005 on its flagship rare earth metals project east of Yellowknife, Avalon is now spending time refining the complex method of processing its ore and separating its heavy rare earth metals, and determining a suitable location for its hydrometallurgical plant in either Alberta or Saskatchewan. (Sites at Pine Point, NWT, and the Gulf Coast of Louisiana are out.) A technical report will be released sometime next year. But there’s no rush: the rare earth market—dominated by China—has been crushed, and Avalon, needing to come up with $1.6 billion to build Nechalacho, has focused its attention on projects it owns down south.

Fortune Minerals: NICO

Here’s another company that looked south—but that didn’t go so well. Last fall, Fortune Minerals, developing its gold-bismuth-cobalt-copper project near Whatì, NWT, picked up the Revenue Silver Mine in Colorado on the cheap with the intention of using revenue (get it?) generated from that producing mine to help fund NICO. But there were hiccups. In December, Fortune ran into issues and had to borrow more money from the same lenders it went to when purchasing the mine. Fortune spokesperson Troy Nazarewicz says that financing came with more “expensive terms.” When it was all said and done, the financing group—Lascaux Resource Capital Fund—wound up with the mine as a payment for Fortune’s default on its loans. The company’s still hoping to advance NICO, but will have to find funding elsewhere.

Victoria Gold: Eagle Gold

With enough cash in its coffers to fulfill all its financial obligations and planned spending until February 2017, there’s no reason for Victoria Gold executives to panic when it comes to finding funders for its $400 million Eagle Gold project east of Dawson City. But gold prices are down since Victoria Gold completed its feasibility study in 2012, which used US$1,325 as a gold price—gold has been around the US$1,150 mark the last three months, after an average of roughly US$1,200 the previous year. The company revised and re-filed its feasibility study in March, with executives crossing their fingers for a bump in the gold price to get Eagle funded and built.