Nighthawk looks to soar on NWT gold

Contrary to popular belief significant gold finds in the far north don’t begin and end with the Yukon.

While the territory has been hogging much of the exploration headlines over the last few years Nighthawk Resources (NHK-V) is reminding investors the territory to the east has a bit of golden luster to its rocks as well.

By consolidating 900-sq. km of land at the Indin Lake gold camp, Nighthawk now holds over 90% of an Achaean greenstone belt that sits roughly 200 km north of Yellowknife in the Northwest Territories.

Geologically speaking the permits cover an area within the north/south trending West Bay–Indin Lake fault corridor, a structure that has yielded over 13 million oz. of gold production and offers some similarities in terms of structure and rock age with more famed Achaean belts to the south: the Abitibi and Red Lake.

And while controlling such a large portion of a gold camp is enviable, it does pose the problem of where to focus exploration capital.

Fortunately for Nighthawk it has the past as its guide.

The epicenter of the project is the historic Colomac Gold Mine which went out of production when Peggy Witte’s Royal Oak Mines went bankrupt in 1997. Somewhat ironically it was the rough shape that Royal Oak left the land in that wound up opening the door to Nighthawk some 12 years later.

With environmental safeguards not being up to snuff in the 90s Royal Oak simply walked away from an environmental mess once it became insolvent. That meant the government in Yellowknife was left with an expensive clean-up on its hands.

Nighthawk, which was known as Merc International Minerals at the time, had strategically staked and acquired most of the prospective ground around the old mine site reasoning that once the clean-up was done, Colomac itself would become available.

That time came sooner than anticipated, as with the government short on funds it reached out to the most likely source.

“We surrounded them,” Wiley explains of the government’s willingness to deal exclusively with Nighthawk. “When they were nearly done they looked up and said holy cow, we were all around them…so they ended up calling us up.”

The two parties agreed that Nighthawk would post a $5 million bond to cover the remaining reclamation costs (expenses that Wiley believes could turn out to be less than $5 million, in which case Nighthawk would be reimbursed for the difference) in exchange for Nighthawk being granted the permits for the property.

The deal not only ensured that the mess was cleaned up, but it also allowed Nighthawk to acquire a past producer, with significant upside potential, without having to go through an auction process. One miner’s mess had become another explorer’s opportunity.

So what exactly did that $5 million bond win for Nighthawk?

Colomac contains five known gold deposits, all of which are open in all directions. Only the Colomac Dyke deposit, however, was mined. The deposit went to the mill intermittently between 1990 and 1997 and turned out 527,908 oz of gold with an average head grade of 1.66 grams per tonne.

Mining occurred in three shallow open pits developed on a steeply dipping quartz-feldspar porphyry intrusion, which is the Colomac Dyke.

Where things get really interesting for Nighthawk is that the historical mining only scratched the surface of the dyke’s 7-km mineralized strike length.

Wiley and Nighthawk’s chief geologist Michael Byron unfurl a 3 metre long cross-section of drill results from the zone that makes clear just how much strike length they are dealing with.

Some of the highlights from its winter drilling program across that stretch include 128 metres grading 1.36 grams gold, 56.25 metres grading 1.67 grams gold and 2.4 metres grading 31.2 grams gold.

Thus far the company has finished drilling 8,500 metres of its 11,000 metre drill program. Roughly 3,700 metres have been assayed and reported on, and Wiley says he expects that results from the entire program will be in by October of this year.

Those additional assays, combined with historic core left at the site that is now being logged and re-sampled, will likely contribute to a bulked up resource estimate that will consider a greater breadth of mineralization than what was historically outlined.

Byron explains that given such a long band of mineralized strike the plan has been to focus on areas within the Colomac Dyke that have already yielded strong results and drill those areas out further to see if it can widen out what is currently a relatively narrow band of mineralization.

“If we can extend along strike it’s cheaper than drilling at depth,” Byron says, although he points out that historic deep holes extending to depths of 1000 and 700 metres bottomed out in mineralization with grades similar to that found in the mined open pit.

Nighthawk has thus far outlined inferred resources of 42.65 million tonnes with an average grade of 1.05 grams gold for 1.45 million oz. of gold.

Of those ounces the Colomac Dyke accounts for the lion’s share, as the North, Central and South section of the Dyke contribute 1.306 million ounces to the resource.

The remaining ounces come from what as known as the Goldcrest Dyke and the Grizzly Bear deposit, which are both parallel and to the west of the Colomac Dyke, and Zones 24 and 27 which are situated to the east of the northern part of Colomac.

Exploring in the wilderness of the far north means that First Nations relations are a key component of any future success. Wiley is attuned to that fact and says relations with the local Tlicho people are on a solid footing.

Both the community and the company lobbied the government for the construction of an ice road — a function, Wiley says, of the community’s economic savvy and its eagerness for more resource development in the region.

On the capital front Nighthawk is well positioned to drive the project forward as it still has $9 million left in the kitty from a $12 million equity financing done in March.