EnGold Mines’ (TSXV: EGM) wholly-owned Lac La Hache copper-gold-silver project in British Columbia’s southern Cariboo region has a history dating back several decades.
The property, 14 km northeast of Lac La Hache and 480 km from Vancouver, lies within the Quesnel Trough, a 2,000-km long belt that hosts several large tonnage porphyry-type deposits. Imperial Metals’ (TSX: III) Mt. Polley mine and Taseko Mines‘ (TSX: TKO; NYSE: TGB) Gibraltar mine are located 90 km north of Lac La Hache, while New Gold’s (TSX: NGD) New Afton mine is 170 km south.
EnGold’s 258-sq.-km project hosts multiple mineralized zones within a sizeable alkalic porphyry system along a 10 km prospective trend. These include the recently discovered Copper Skarn zone; the gold-rich Aurizon gold-copper-silver zone; the Spout magnetite-copper deposit; and the Berkey porphyry prospect.
The deposits are part of the Spout Lake copper-gold district, a group of porphyry and skarn deposits.
When GWR Resources [now EnGold] acquired Lac La Hache in the early 1990s, the property was much smaller and was primarily located around Spout Lake, David Brett, EnGold’s president and CEO, said in an interview.
“Over the years, the company acquired options on other mineral claims in and around the area and also had multiple option agreements with different prospectors over this time, which agglomerated into one large property,” he said.
Brett joined EnGold in 2014 and was struck by the “stellar drill results” from previous operators and the enormous core database, which, he said, has been exceptionally well preserved and painstakingly digitized.
EnGold’s Lac La Hache exploration office and core management facility on BC Highway 97. Credit: David Brett, EnGold’s president and CEO.
While there is evidence of placer-gold prospecting activities on the property, which likely originated during the Cariboo gold rush of the late 1800s, the area remained unexplored until the mid-1960s.
In 1966, the Geological Survey of Canada conducted an airborne magnetic survey of the area — the first modern exploration on the property. The survey outlined a magnetic anomaly measuring about 12 km by 15 km that suggested the possible presence of copper mineralization.
Stream sediment and soil geochemical analyses were undertaken by Coranex Ltd from 1966 to 1967 at Peach Lake, 1.5 km southeast of Spout Lake, which led to the discovery of intrusion-hosted copper mineralization known as the Peach zone.
Followup geological, soil geochemical, induced polarisation, and prospecting surveys in an area south of Peach Lake led to the discovery of the Peach 1 deposit and other mineral occurrences, including the Aurizon gold zone, 4 km southeast of Peak Lake and about 21 km northeast of Lac La Hache.
In 1969, Asarco Exploration Company of Canada Ltd. optioned the property. That year, Amax Potash Ltd. completed geological and geochemical work over parts of the airborne magnetic anomaly not held by Coranex, which revealed magnetite-chalcopyrite skarn mineralization south of Spout Lake. The company then staked the claim as the Spout deposit.
Between 1971 and 1973, Amax conducted geological mapping, geochem surveys, airborne and ground magnetometer surveys, induced polarization, trenching, and drilling at Sprout Lake. The drill campaign included six shallow packsack holes over 136 metres, ten percussion holes, and seven diamond drill holes totalling 843 metres.
In 1974, Craigmont Mines Ltd. optioned the property and drilled six diamond drill holes over 1,210 metres in an area called the North Spout zone.
The property was then allowed to lapse with no recorded exploration activities until the early 1980s when Selco, the mining and minerals division of B.P. Resources Canada, completed soil geochem surveys between 1983 and 1984.
In 1987, Peach Lake Resources restaked portions of the property and completed very-low-frequency electromagnetic and magnetic surveys and excavator trenching.
Asarco re-optioned the property in 1991 and completed soil geochemical surveying, geological mapping and induced polarization surveys. Follow-up trenching and percussion drilling failed to define copper mineralization of economic grade.
GWR Resources then acquired the property in 1993, and through a joint venture with Regional Resources Ltd., completed drilling at the Spout magnetite-copper prospect, resulting in an initial in-house resource estimation of 595,000 tonnes grading 1.78% copper, 51% magnetite, and 0.12 gram gold per tonne.
The drilling also revealed copper mineralization within the Peach Melba prospect and low-grade copper mineralization with enriched gold on the Aurizon South prospect.
The companies terminated the agreement in 1995.
That same year, GWR completed three diamond drill holes at the Aurizon gold zone as a follow-up to the 1994 drill program. Highlights included drill hole A95-02, which returned 6 metres grading 0.18% copper and 1.13 grams gold.
In 2000, the discovery of an outcrop of copper mineralization on the Aurizon Central prospect sparked further exploration. However, the main exploration phase did not proceed until 2007.
Between 2003 and 2005, GWR drilled 36 drill holes on the Harvey, Ann North, Peach 2, Peach Melba, and Spout prospects.
In 2006, the company completed a further ten drill holes on the Aurizon Central prospect, confirming the presence of low- to moderate-grade copper mineralization that was first discovered in 2000.
The following year, a total of 3,178 metres of trenching and a 43-hole 15,325-metre drill program were undertaken within and around the Aurizon zone prospect. The trenching exposed low-grade copper mineralization with associated gold in discontinuous zones striking to the Aurizon zones’ northwest. The drilling tested the depth of copper mineralization in exposed bedrock in the Aurizon gold zone’s southeastern area. Highlights included drill hole AZ-06-01, which intersected 44 metres grading 0.42% copper and 0.63 gram gold.
From 2008 to 2009, the company drilled 48 holes on Aurizon Central and another 20 holes on the Aurizon South prospect. Highlights included drill hole AZS08-07, which is considered the discovery hole for the Aurizon South deposit. The hole cut 26 metres grading 0.87% copper, 6.28 grams gold and 4.8 grams silver from 316 metres downhole, including 6 metres grading 1.92% copper, 15.5 grams gold, and 7.6 grams silver.
Additional drilling from 2009 to 2011 extended the Aurizon South zone 600 metres to depth, 60 metres to the north, and 175 metres to the south. From 2011 to 2012, an additional eight holes drilled on Aurizon South increased the mineralized trend’s strike length to about 300 metres.
However, exploration began to shift from the Aurizon zones to the Spout deposit in 2010. Between late 2010 and early 2011, drilling was completed at Spout Lake. Highlights included drill hole SL11-177, which returned 2 metres grading 22.8% copper, 26.2% iron, 12.95 grams gold and 125 grams silver from 176.5 metres.
In 2012, the company released its first NI 431-10 compliant mineral resource estimate for the Spout deposit. The report estimated 7.6 million indicated tonnes grading 0.28% copper, 11.4% magnesium, 0.05 gram gold and 1.26 grams silver for 47 million contained lb. copper, 871,600 tonnes magnesium, 12,300 oz. gold and 309,700 oz. silver. Inferred resources added 15.8 million tonnes grading 0.21% copper, 8.32% magnesium, 0.04 gram gold, and 0.93 gram silver for 73 million lb. copper, 1.3 million tonnes of magnesium, 20,300 oz. gold, and 472,000 oz. silver.
“The 2012 resource estimate was based on an open-pit model and at a time when the market for magnetite was very bullish,” Brett said. “But that approach ended when the magnetite prices collapsed. So by the time I joined the company in 2014, their exploration focus had already moved away from copper to the gold mineralization contained in the hydrothermal breccias at the Aurizon deposit.”
In 2016, GWR changed its name to EnGold to reflect this new direction.
One of the key upsides for the project is that EnGold’s vice president of exploration, Rob Shives, has been with the project since 2009. “Projects like Lac La Hache can suffer if they don’t have what I call ‘knowledge succession’ that can be leveraged for future exploration work,” Brett said. According to Brett, Shives was so impressed by Lac La Hache that he left his job at the Geological Survey of Canada to work on it.
The new approach was formulated in 2017, when the company’s geologists discovered a new zone while drilling a geophysical anomaly discovered in 2015, which revealed an unexplored area south of the Spout deposit in 2015. The discovery drill hole, G16-01, intersected a 27-metre-thick zone containing semi-massive magnetite (>40% magnetite) and chalcopyrite (1.76% copper, with 14 metres of the 27 metres exceeding 2% copper).
The new G1 copper zone, 1.8 km south of the Spout deposit and 10 km northwest of the Aurizon zone, also contained higher gold and silver grades than at Spout. The discovery prompted the company to bring a second drill on-site, which also intercepted numerous mineralized areas. The highlight included hole G17-16, which cut 43 metres grading 1.31% copper, 31.14% iron, 0.20 gram gold, 4.06 grams silver (1.54% copper equivalent) starting from 293 metres, including 24 metres grading 1.67% copper, 34.55% iron, 0.29 gram gold and 5.09 grams silver (1.99% copper equivalent).
“The G1 Copper zone is geologically similar to the Spout deposit, with both containing chalcopyrite, magnetite, and tourmaline mineralization,” Brett said. “You could call them ‘sister deposits’ as it’s impossible to distinguish between the drill cores collected from each area.”
The latest drill results, he added, come from 20 metre-spaced step-out holes from hole G17-16 on the G1 Copper zone. The first hole of this year’s program, G20-46, was drilled 20 metres northeast of G17-16 and intersected 34 metres grading 0.88% copper, 20.65% iron, 0.12 gram gold and 2.72 grams silver (1.02% copper-equivalent) starting from 306 metres, including 15 metres grading 1.37% copper, 32.03% iron, 0.20 gram gold, and 4.22 grams silver (1.6% copper equivalent).
Hole G20-47, 20 metres southeast of G17-16, cut 39 metres grading 0.93% copper, 20.03% iron, 0.10 gram gold and 2.84 grams silver (1.05% copper-equivalent) from 294 metres, including a higher-grade core of 22 metres grading 1.29% copper, 24.71% iron, 0.13 gram gold and 1.76 grams silver (1.43% copper-equivalent).
“We were very encouraged that our step-out drilling at both holes confirmed the extension of the mineralization intersected by drill hole G17-16,” said Brett. “This was a real game-changer for us, even though we have gold in our name, our story is more a copper-gold one.”
The company is now on its fiftieth hole in the area.
Although it appeared that the G1 copper zone was narrowing on the flanks of the zone, a recently completed step-out drill hole, G20-49, drilled 50 metres to the south of G17-16, suggests that the zone increases in thickness to the south, Brett said.
Core drill sample from step-out drill hole G20-49 on the G1 Copper zone at Lac La Hache. Credit: Rob Shives, EnGold’s vice president of exploration.
Another step-out hole, G20-50, is being drilled 50 metres to the south of G20-49. The company also plans to undertake further step-out drilling at what is now being called the “G1 extension zone.”
SRK Consulting, which put together the original resource estimate for the Spout deposit, has been engaged to recalculate the mineral resource, but this time using a constrained, high-grade underground model.
The 2012 resource estimate only included near-surface material at the Spout deposit, Brett said. The recalculated estimate will also have an initial resource estimate based on the deeper high-grade copper drill results from the G1 extension zone.
“It’s taken us some time to get to this position, but we can now move forward from exploring these deposits to putting together a PEA,” Brett said. “We envisage a relatively small mine with a production of about 2,000 to 3,000 tonnes a day.”
Brett was keen to point out, however, that discussions around a PEA are a little premature. He noted that the company recently raised around $1 million in funding for the current drill program at the G1 extension zone and several new drill holes on gold targets, which they plan to complete by the end of October. The updated resource estimate is slated for release by year-end.
“On top of the extensive historical work and the incremental work that we are doing, we are still finding new opportunities on the property,” Brett said. “The gold story is more of a wait-and-see, so it’s going to take us a month or two before we pull our budget together for next year.”
The company plans to raise money to fund the 2021 drill program, which will be contingent on the findings from the remaining drill assays.
I lost so much money investing in this company. I hope they make it in the future. My view is there are so many other exploration companies out there that have much better grades. But the new management team may change the outcome, I hope they succeed. Copper will be in high demand it the future for sure.