Publisher's Note: Today, we're bringing you an interview between our junior mining expert and editor of Junior Mining Monthly and Junior Mining Trader, Gerardo Del Real, and Executive Chairman of Abacus Mining (TSX-V: AME) (OTC: ABCFF), Mr. Michael McInnis.
Abacus is seeing some promising results from recent drilling in Nevada. Read on to learn all about them, the company, and where it goes from here.
To your wealth,
Nick HodgePublisher, Outsider Club
Gerardo Del Real: This is Gerardo Del Real with the Outsider Club. Joining me today is Executive Chairman of Abacus Mining (TSX-V: AME) (OTC: ABCFF), Mr. Michael McInnis. Michael, how are you this morning?
Michael McInnis: I'm doing well, Gerardo. It's a great day in British Columbia, this weather's nice and summer's great, so I'm fine.
Gerardo Del Real: Well listen, I want to thank you ahead of time for taking time with me this morning. You and I chatted back in March, if I'm not mistaken. I brought the Abacus story to readers and subscribers. We talked about the science that went into delineating targets at Willow, a property frankly that I've been wanting to see drilled since 2010. I've always said it's highly prospective. I'm definitely not a geologist, I never pretend to be, but you definitely are and there were a lot of important, important outcomes as a result of the drilling.
I want to start by saying we don't have assays back yet. But despite that, there is a lot of news in the latest news release that was, to put in context, geologically relevant and very important for the next steps. I'd like to start by asking you what you feel were the most important takeaways from what you know thus far from the three holes that you drilled at Willow.
Michael McInnis: I'd be happy to, Gerardo. If I could just wind back time a little bit here, some of the people in Nevada particularly will remember that this Yerington copper camp was very active in the '70s and '80s, when the original Yerington copper porphyry was being mined by Anaconda.
The Willow property did in fact have a number of exploration programs carried out on it in the 1970s by the "biggies" and they mapped and they drilled some holes. Albeit they had very interesting results, they could not convince themselves that the Willow property in fact had the same potential as some of the other areas within that district. And the reason was that if you look at the Yerington porphyry copper, if you look at Ann Mason, Bear, MacArthur and Nevada Copper - in other words, all the known deposits in the camp , there is an association with what's called the Luhr Hill granite. The Luhr Hill is the source of the copper. In other words, that is the intrusive that squeezed out and put all the copper into the deposits as we know them today in Yerington. And the knock on Willow in the 1970s was, "Hey, we mapped this property early, we drilled some holes, but we don't see the Luhr Hill. So the potential here can't be very good."
Since the '80s the property has sat idle, with kind of the negative of having no Luhr Hill granite on it to be the engine that produced a new porphyry copper. So our observation when we first looked at the property was the size of the alteration zone, and I know you've remarked on it when you were on the property as, "Man, this is a big alteration footprint." A large alteration zone means there's been a big metallizing event taking place. It doesn't mean you've got a deposit, but it means there's been a lot of fluid that's flowed through these rocks and produced the sort of footprint that you see. Plus, in the holes that were drilled in the '70s, there was minor copper, mainly at the trace element but highly anomalous. Again, associated with some of the alteration that you'd find in a porphyry copper system. So with the size of the alteration zone and the copper in those holes, I thought, well, this is a good prospect for really detailed mapping. So I brought in Brock, who has spent his entire career in porphyry coppers and is probably one of the brightest porphyry copper guys I know, plus he's a nice guy.
He and his younger assistant, Sam, they did a knee-crawling exercise over this property to map it in detail. Not only the alteration, but the rocks and primarily the structure. And full marks to Brock and Sam, because they developed the geological framework at Willow and they saw two things. One, they saw a vector, within the alteration that was on surface towards the east. Secondly, and perhaps more importantly, their structural reinterpretation, partly using the old drill holes, showed that there was a thin veneer of rocks that had slid from east to west and would have covered the potential source of the mineralization.
So those were two significant outcomes of our mapping program. So this year's program was designed to drill below that thin veneer of rocks and see what was below it with a view to see if A; we were getting better alteration in the sense of higher-temperature alteration, B; what we're going to see in any quartz veining that we might find, and C; were we going to find the Luhr Hill granite or dikes associated with Luhr Hill. Because Luhr Hill is present as I mentioned in both Ann Mason next door and in the Yerington deposit, and that's the source of the metal.
The significance that came out of our drill holes is that we intersected not only dikes associated with the Luhr Hill, but we actually intersected the Luhr Hill granite itself and that was pretty exciting. That is a major development and a key outcome of our program is that we have confirmed that the engine that drives the copper mineralization in the Yerington district is present on Willow. Secondly, some of the copper mineralization we saw is associated with so-called early-stage veins that again are prominent in many of the porphyry coppers around the world but also in Yerington and in Ann Mason. The second key outcome was we identified those veins within our drill holes.
So two takeaways; presence of Luhr Hill, not only the granite, but its dikes and the presence of the kind of veining that is characteristic of the deposits in the Yerington district. And three; we got some higher-temperature alteration which tells us we're getting closer to what I call the exhaust, where the Luhr Hill would have blown out the copper mineralization in various associated hydrothermal fluids out the top of the intrusive. So those are the key outcomes.
We had planned a larger program, but the market being what it was, we weren't able to raise all the money to do that. So our plan was to go in and drill three holes. The first hole encountered some real drilling difficulties getting below the cover rocks. And after wrestling with it for a long period of time, the driller said, "We recommend we abandon it and maybe come back later." So we did that and then we drilled two more holes. So effectively this program was a two hole. It got down, essentially to target and the results I think were as good as we could be hoping for at this stage of the game.
Gerardo Del Real: Mike, you mentioned the Luhr Hill granite being the source, the engine for the copper mineralization in the Yerington district. For those that are new to the camp and not familiar, you mentioned Ann Mason, you mentioned Yerington. Can you put in perspective just how much copper is at each of those properties?
Michael McInnis: Well, the Yerington was mined by Anaconda, I think, from 1952 to 1978. And it took out, I think there was about 1.7 billion pounds of copper. There's still copper below the old Yerington pit, it's about 128 million tonnes of close to 0.3. The Ann Mason is huge, it's 1.4 billion tonnes of 0.32 copper with a bit of moly associated with it. These are major massive porphyry coppers and a size that would certainly put them in the top quartile of porphyry coppers in North America.
Gerardo Del Real: Now those rocks at Ann Mason tend to produce clean copper concentrate. Is that accurate? And then same for Yerington I believe.
Michael McInnis: That's absolutely correct. Ann Mason has been taken up to PEA stage and it produces a very nice concentrate, there's nothing deleterious in it at all. Yerington was the same, it was a nice mine for Anaconda.
Gerardo Del Real: You mentioned vectoring in towards the porphyry center, which obviously you believe exists at Willow. At what depths was the Luhr Hill granite intercepted?
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Michael McInnis: We drilled on the east side of the target, where the cover rocks are the deepest, but where we also had more geological control. At 300-400 meters depth we picked up the Luhr Hill and some of these veins that I've mentioned. We are seeing preliminarily some vectors that might lead us to the northwest but I reserve the right to change that as more data comes in. But if that's an accurate vector then we're coming up to where the target is expected to be shallower.
Gerardo Del Real: Excellent, can you provide a couple of examples of analogs with early halo veining and the type of alteration that you're now seeing at Willow? After getting the data and being able to look at the core and see what the rocks are looking like.
Michael McInnis: Of the early-stage veining did you say?
Gerardo Del Real: Sure, deposit types where these early halo veins are prominent and significant enough to kind of guide you towards where that porphyry center would be.
Michael McInnis: Well, certainly they're present in Ann Mason and so we've got their PEA and the public documents to follow on that. Yerington has them as well. Highland Valley comes to mind. It's been a porphyry district, in fact that was the first deposit I worked on when I came out of university was the Valley copper porphyry in British Columbia. There's a number of them around the world that show this early-stage type of veining.
Gerardo Del Real: Excellent. What are the next steps, Mike? I know you're awaiting assays still. But what's the team doing and what's the next step?
Michael McInnis: Well right now we are compiling the information that we do have. We do have some spectrographic work that we did on our new holes that's being compiled. And when we get the geochem and the assays from the holes, that will be integrated with the spectrographic work. And what will pop out of that will be vectors, towards what we would consider the direction to go for the next round of drilling.
Gerardo Del Real: Now, Mike, one last question. I know that obviously the junior resource space, it's a tough market right now. Despite that, I believe some of the better technical people have picked up on your news release. The stock has doubled essentially in share price here over the last several weeks. You decided to be efficient with shareholder money, you decided to sample 2- and 3-meter sections of core for every 15 meters, for full multi-element geochem, including copper and molybdenum. Can you explain the strategy and the thinking behind that and what you hope to gleam from that?
Michael McInnis: Yeah, it was clear on those two holes that we did not hit a large, full section of what might be economic mineralization. We do have copper and we do have moly in there. So in talking with Brock and Paul Anderson, we thought what do we want out of these two holes and what's the most efficient way? Because if we did trace element, geochem and assaying on every meter, it was going to get quite expensive. And Brock says, "Look, what we're really looking for out of these two holes is directional information, and we did get that. Where do we go next? We want to see the assays of course but we really need the trace element geochemistry."
And so we thought the best way to do that is get an average over a wider area of the drill holes that would give us a composite, if you will, of the trace element profile down the entire hole. In that way we would get a better feel for overall trends, if you will, that the hole was giving us.
And as Brock said, "We're going to get some values in the metals and if we feel like it's valuable in the future we can go back and just assay for the metals up and down the hole." But he said, "What's important to me," according to Brock, "was I want the trace element chemistry to work on to give you your next drill hole program."
So after mulling it over we thought, okay, yeah, that sounds good, we didn't hit a big long economic intersection that we would have hoped to get. But the reality was, it was not likely to intersect a deposit on the first try to get that. The second prize was getting directional data to where the next holes should be. So that was the rationale to doing that. We felt by doing that we would get better averages of these things and that would help in vectoring towards the heat center of the system.
Gerardo Del Real: You mentioned that Brock came in initially skeptical of the target, but of course willing to prove that out. Without putting words in Brock's mouth, how's he feeling about the target now?
Michael McInnis: Well, I've known Brock for a while and when I asked him you could tell - and he knows the district fairly well - he was not optimistic. Obviously he had heard just like everybody else, there's no Luhr Hill. We're too far to the west, we're barking up the wrong tree here and so on and so forth. I said, "Well, Brock, that may be true but look at the system. It is a huge system, let's make sure that we're not missing something here." So he agreed and he and Sam, as I mentioned earlier here, did just a tremendous job of detailed mapping on the property to get where we are. Brock has flipped a whole 180 degrees. I mean he is very excited of what we saw in these holes and he's convinced that we're quite close to the center of mineralization. A completely different view from Brock right now in terms of potential of this project from a year ago.
Gerardo Del Real: Well I know your phone's been ringing since the release outlining all of the geologic success that you had frankly. And so I can't wait to see what comes of that and what the next steps are. I know you'll have to raise money here in the near term, but I also know that you have several options for that and maybe some creative opportunities that might come up. Mike, is there anything else that you'd like to add?
Michael McInnis: No, I think you've encapsulated it quite well. Some of your readers, probably all of your readers, have read your story and to mention it again, I thought you did an excellent job of capturing our view of that project right now and why it's an important discovery. I think we have found the source of a potential fifth ore body in the Yerington district. It remains to be seen, we've got drilling to do. But I would say I'm very optimistic right now that we've got a deposit to find on this property and we're going to do our damnedest to make sure that we can get in there and drill it and find it.
Gerardo Del Real: Well coming from you and coming from Brock, two of the better people in the space with decades and decades of experience and discoveries, that says a lot, Mike. Thank you again for your time, sir.
Michael McInnis: It's my pleasure and thanks for the opportunity.
For the past decade, Gerardo Del Real has worked behind the scenes providing research, due diligence, and advice to large institutional players, fund managers, newsletter writers, and some of the most active high-net-worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.