Resource Maven Gwen Preston says Great Bear has 'Strong Position' in Red Lake
The following is promoted content sponsored by Great Bear Resources, with material derived from Gwen Preston's Resource Maven newsletter.
I recently had the chance to sit down with Chris Taylor, CEO & President of Great Bear Resources (TSX-V: GBR), to discuss some important aspects of the exploration plan for GBR. The company has two main projects in the Red Lake District of Ontario. The company's key focus is the Dixie Project, where it is drilling into several zones of high-grade gold. The other is the West Madsen gold project, which is an on-strike extension of Pure Gold Mining's high-grade Madsen project. Between the two projects, Great Bear Resources now controls over 13,000 hectares of prospective greenstone belts in a highly prospective area.
Gwen Preston: Great Bear has been reporting high-grade results from the Dixie Project - the widths are generally narrow, but the grades are great. Can you put that into context with a brief background on the typical geology found in the Red Lake District? What kind of grades and widths are commonly found in the area?
Chris Taylor
Chris Taylor: Red Lake is known for producing 30,000,000 ounces of mostly high-grade gold. Those zones are generally 1 - 3 metres in width, though some wider intervals are seen of up to several metres true width in most mined deposits, much like Great Bear has been seeing at our Dixie project. Generally, modern exploration in the district targets gold intervals that are several grams in average grade, but all companies strive to hit "jewelry box" style intervals of multiple ounces per tonne, for which the district is well-known. The widest high-grade drill intercept we've seen to-date at our Dixie project is 10.4 metres of 16.84 g/t gold, but individual assay intervals have been reported of up to 160 g/t gold over approximately half a metre.
GP: Those widths and grades have supported some really successful mines - so much so that miners remain very interested in the area and good discoveries often get acquired and developed.
CT: With all that mining experience and existing mining and milling infrastructure, Red Lake is one of the best jurisdictions globally to make a new high-grade gold discovery. There's no required "proof of concept" in this district, as 30,000,000 ounces of past production is all the proof that's needed! Exploration and development costs are proportionally lower in Red Lake than most other, more remote Canadian jurisdictions, so it is easier for companies to clear landmarks as they progress their projects in this area. The major local producers are very well aware of this.
GP: Great Bear is obviously at a much earlier stage than those companies and projects but consolidating the Dixie Project and reinterpreting the historic work put GBR in a strong position to move this project along quickly. What do you think it will take for the market to really sit up and take notice of what you're doing? I mean, who are some of the other players in the area that are further along in the exploration cycle? And what catalysts have been attracting attention their way?
CT: A neighbouring project to Great Bear is Pure Gold Mining's Madsen. They've done excellent work advancing a historically mined asset and expanding its resource through the required economic studies that precede mining. I believe their recent progress has woken the market up to their potential, as they are performing well regarding fundraising and valuation. There are definite similarities between their story and ours, geologically.
Great Bear is in a unique situation, however, in that we are making significant new gold discoveries in the near-surface in what is turning out to be a very large gold system, with many high-grade gold results. This is extremely rare in the Red Lake district, as exploration has been ongoing for over a century now and new discoveries aren't made very often. Unlike most local properties with the kinds of widths and grades we're seeing at Dixie, all of the gold that was deposited during mineralization is still there in the ground available for future development, in many instances extending right to surface. It's an exciting time for our company as we drill to determine just how large the system is, and where the highest grades are concentrated.
With over 10,000 metres of drilling being completed this year, in what I estimate will be 40 to 50 drill holes, I believe the short-term valuation catalyst will be recognition of just how large and rich of a gold system we are dealing with, and what that could mean for our shareholders going forward into 2019.
Drilling in 2017 at Great Bear Resources' Dixie Lake gold project in Ontario's Red Lake district. Credit: Great Bear Resources.
GP: OK, let's home in on Dixie. Can you shed some light on what type of gold vein system it is and what other characteristics it possesses that make it so prospective?
CT: Our Dixie project is a typical Red Lake style steeply-dipping geologically and structurally-controlled gold system. Its outstanding quality is its unusually strong continuity of gold mineralization. With over 90 drill holes targeting the primary gold-bearing contact, all have encountered the same gold-bearing mineralized system and all have gold at the contact. Otherwise, the combination of steeply-plunging high-grade gold zones within a geological contact hosting silica flooding and veining with sulphides and variable amounts of visible gold is also what you'd see in most other local gold deposits. Given the district's production record, we are very pleased with what we're seeing.
Dixie & West Madsen Project Location Map
GP: Last fall was Great Bear's first drill program at Dixie. Take me through what you were trying to accomplish and how the results played out.
CT: When we took on the project in 2015, we had a mix of data from several historical explorers, including Teck Resources, Mark O'Dea's Fronteer Gold, and some other juniors. There were many good high grade intervals, but the data was full of conflicting interpretations, capped assays and even some mis-located drill holes.
Our 2017 drilling was designed to answer grade potential, continuity and geology questions. The project passed on all three fronts, and we drilled the highest-grade interval of over 10 metres of over 16 grams per tonne gold in an area that past explorers had actually predicted would be unmineralized. That work paved the way for the updated geological interpretation that is allowing us to hit gold over such a wide area and multiple targets today.
GP: Let's delve into that idea of a "major gold structure." It's pretty clear in the magnetics data - what is it and why is it prospective?
CT: The structure is a geological contact between various volcanic and sedimentary units. Oddly, the units that define the core of the structure are high-iron tholeiitic pillow basalts that are only otherwise seen locally in the Balmer assemblage rocks in the main Red Lake mines, and are not "supposed" to be at our project, but clearly are. These are in contact with Confederation assemblage units that are a mix of more calc-alkaline sediments and volcanics, which are what are supposed to be present in this area according to government maps. That contact between the Balmer sequence-like geology and Confederation type geology extends for over 10 kilometres on our project and has gold mineralization along it at all of 90 tested drill holes along 2.3 kilometres of strike where it's been drilled so far. The gold system is very large.
GP: That's the theory - which is a big part of what you're testing now, in your Phase 2 drill program. You started that with a bang, with a huge step out along this structure, and the drill hit right into high-grade gold. Talk a bit about that step out and why hitting good gold 1.6 kilometres away from known gold is so unusual and exciting.
CT: Most step-outs in Red Lake are considered aggressive if they are 10 - 20 metres. That's because gold tends to occur in high grade steeply plunging ore shoots with limited lateral continuity. It does not impede mining a lot of ounces, but it does mean drilling needs to be tightly spaced. Our project's primary Dixie Limb Zone contact is unusually continuously gold mineralized. We have no drill holes that have failed to hit gold in over 90 instances where it's been tested. That big 1,600 metre step-out encountered over 20 grams gold (1.40 metres of 12.74 g/t gold including 0.5 metre of 23.30 g/t gold) in the near surface, just by targeting the same prospective contact. This shows both size, and continued capacity for high-grade gold mineralization along that contact.
Step-out drill holes along Dixie Limb Zone
GP: I'm sure you're now following up that new hit with additional drilling.
CT: You bet. If drilling an additional 40 - 50 holes into that same contact in various areas along over 2 kilometres counts as following up!
GP: But this new step-out zone is by no means the only focus at Dixie. You're also drilling at three other areas along the structure: the known Dixie zone, the Hinge zone where the structure folds back on itself, and the South Limb zone. Run me through the basics on those zones.
CT: The Dixie Limb Zone is the contact I mentioned before. It extends for over 10 kilometres on the property, and probably extends kilometres down at depth. The target contact is actually interpreted to be one limb, or flank, of what we call an "isoclinal fold".
Imagine taking a magazine and folding it right in half. The cover of the magazine would now be on BOTH sides of the same thing. The Dixie Limb Zone is just like that, the same prospective contact is actually on both sides of the fold. That means the 10 kilometre long target horizon we've been drilling would actually be 20 kilometres long if "unfolded"! That's a lot of prospective geology, and we know the gold system is present everywhere it's been drilled along 2.3 kilometres to date. We put a single drill hole into the other side of our fold recently, which we call the South Limb. We were very pleased to see that we hit the same hydrothermal system, including gold mineralization, and the geology was a mirror image of what we'd drilled before, as we had predicted. If our hypothesis continues to be shown to be correct, there may be a duplication of the Dixie Limb Zone on the other side of our fold, which would have large implications for the total size of the system.
The Hinge Zone would be the point where your imaginary magazine was actually folded, or bent the most. In gold systems, hinges of folds are where you often see high concentrations of mineralization, including enhanced grades and widths. That is one reason we are continuing to follow up on our recent high grade hinge zone drill results, as we feel this area has strong grade and interval length potential. Results to date have been excellent.
GP: The thing that stands out about Dixie to me is the consistency of gold. Almost every hole that has ever gone into the structure returns gold. It certainly makes one wonder just how much this system really has to offer, especially given that drilling to date has remained really shallow and that there are large, untested gaps between known zones.
CT: That's our job Gwen, and it's why we expanded our 2018 program from 3,000 metres to 10,000 metres. Our job is to show just how large and robust this thing really is.
GP: While we're talking about the strength of the system, I think one of the recent drill results from the Dixie zone deserves comment. It cut almost above the known body and returned 40 metres of 1.73 g/t gold. That's a broad intercept for Red Lake and carries all kinds of suggestions about the strength of the mineralizing system and the potential for an open pit to start mining, which I know is arm waving but is nevertheless an important potential economic advantage.
CT: It's certainly an interesting idea. Being able to piece together near-surface ounces can be an important economic driver for a mining project, as open-pit mining methods are comparatively cheap and can lead to rapid capex recoveries, even if the surface exploitation is just a small part of a largely underground mined mineral reserve. We're aren't at the economic study stage yet at the Dixie project, but I image that sort of information could be very useful in the future. Most of the gold mined in the Red Lake district has been removed using conventional underground drift mining, and I imagine Dixie would be the same if and when it gets to that stage, but I know Goldcorp has historically considered moving the community of Balmertown which sits atop its underground operations, to develop an open-pit mine for just those reasons.
Cross section through the DLZ showing highlighted intercept of 40.30 metres of 1.73g/t gold in DL-013
GP: The first few holes of the Phase 2 drill program were so successful that you immediately expanded the effort from 3,000 metres to 10,000 metres. Tell me what you plan to test and hope to accomplish with all those additional metres.
CT: We are going to continue to test the spatial strike extent along increasing strike length, plus various different geological contacts that may also host gold mineralization, in addition to more conventional step-outs from the current Dixie Limb, Step-Out, Hinge, Hanging Wall, and South Limb Zones. Keep in mind these are all just names of the various sub-areas within or adjacent to a large, folded and mineralized geological contact that could be over 10 kilometres long.
GP: Drilling is all told pretty easy and inexpensive at Dixie, given the road access and that you're only a 15 minute drive from town. That's a real advantage, from the cost of this drill campaign to the pace at which you can get it done.
CT: Yes, we've been fortunate to see all-in drill costs of less than $200/metre. That includes direct drill costs plus assays and personnel time. It's extremely cost effective and means our additional 7,000 metres will cost us about $1.6m ($1.4m plus $200k for field mapping), for which we are fully funded.
GP: So we will be seeing results from Dixie consistently over the next six months? And hopefully those results will start to paint a clear picture of the strength - and ideally the scale - of the gold system there.
CT: Indeed, that's our job and I look forward to showing our investors what this project has to offer!
GP: OK, we haven't yet touched on your other project, West Madsen. It's in an interesting area, sitting right beside and along trend from some new high-grade gold discoveries on Pure Gold's property. I know you recently completed a high-res airborne magnetic survey at West Madsen. What did that reveal?
CT: We see clearly-defined east-west trending magnetically-defined structures. These appear to represent on-strike extensions of structures that are currently being explored at the Adjacent Madsen property by Pure Gold Mining. In particular, their Wedge Zone has recently generated a large number of near-surface high grade gold results that they indicate are structurally-controlled. They are currently drilling less than 1.5 kilometres from our West Madsen property boundary.
GP: What are your plans now at West Madsen?
CT: We plan to complete a geological mapping and prospecting program during August and will begin to define areas for more advanced work when we receive results. Just like at the Dixie project, we can work all year at Madsen, but prospecting obviously needs to be completed in the summer months. In the meantime, we wish our neighbours great success as they continue to aggressively drill beside us.
GP: Thanks Chris. Great Bear is a very exciting story and I'm really looking forward to seeing further results as the drilling continues at Dixie. I'll definitely be following along and watching for your news releases. Readers can visit greatbearresources.ca for more information.
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