Barkerville’s Cow Mountain 
back in the spotlight

VANCOUVER — Junior explorer and past-producer Barkerville Gold Mines (TSXV: BGM) has three drills lined up at the Cow Mountain gold deposit, outside the historic placer gold mining town of Barkerville in south-central B.C., in preparation for a resource update expected mid-year.

The company’s vice-president of exploration Paul Geddes said during a presentation at a Canadian Institute of Mining, Metallurgy and Petroleum meeting in Vancouver in March that the 60,000-metre drill campaign will show “what we think is in the pit — is in fact in the pit.”

He said the goal of the “drill-to-kill program” is to “take any inferred ounces and try to get rid of them with infill drilling … as preparation work for a feasibility study, because Cow is the first prize of many that we’re after.”

Cow Mountain’s reputation was undermined in 2012 when Barkerville — under different leadership — announced that the deposit’s resource  had swelled to an eyebrow-raising 10.6 million oz. gold, while the prospective trend in the district could host up to 90 million oz. gold.

The company was slapped with an 11-month cease-trade order by the B.C. Securities Commission, and told to revise the estimate to reach National Instrument (NI) 43-101 reporting standards.

The follow-up, NI 43-101-compliant resource estimate shrank Cow Mountain to 1.04 million oz. gold in 17.7 million indicated tonnes grading 2 grams gold per tonne, whereas inferred resources added 49.2 million tonnes at 2.74 grams gold for another 3.94 million oz. gold.

The resource was updated again in March last year to 35.8 million indicated tonnes at 2.4 grams gold for 2.8 million oz. gold, and 27.5 million inferred tonnes at 2.3 grams gold for 2 million oz. gold, using a 0.5-gram-gold cut-off.

Operator Capri Aspe at work at Barkerville Gold Mines’ Cow Mountain gold project. Credit: Barkerville Gold Mines.

“We’re an entirely new company, all the old guard is gone,” Geddes said. “It’s been a tumultuous ride, but now that we have our footing, we’re quickly moving past all that.”

Geddes said the company’s focus this year is to quantify Cow’s resource alongside a geological model, rather than depend on “multiple indicator kriging (MIK)” to draw numbers into space.

MIK is a geostatistical method commonly used in nuggety gold deposits to help reduce the influence of extreme grade without lowering their absolute value. In other words, MIK has no top cut on extreme grades, so it allows high-grade numbers that would not normally be included in other methods — such as inverse distance or ordinary kriging.

“Although we’re pleased with the MIK resource model, it’s just not geologically constrained,” he said. “We all know what happened with Rubicon at their Phoenix deposit in Ontario, so we’re taking every precaution that we can, as we advance the project forward.”

Barkerville’s main assets in the area — Cow, Island Mountain and Bonanza Ledge — occur within 6 km of prospective, Proterozoic-aged stratigraphy in the heart of B.C.’s most productive historical placer district, which yielded up to 3 million oz. gold.

“That 6 km is … all that’s been looked at in 100 years, and it’s part of a much larger geological trend that extends for 60 km across our property,” he said. “When I show our consultants a regional geology map they all look at me shocked and say, ‘Paul, you essentially own the Cadillac Break.’”

(The Cadillac Break is a deep, extensive fault system, with gold extending from Kirkland Lake in Ontario eastwards through Rouyn-Noranda, and on to Val-d’Or in Quebec.)

“There’s the chance we’re blowing our brains out at Cow and there’s a Brucejack sitting right there, we just don’t know,” he said. “We have up to a $1.5-million budget this year for our regional program, so we’ll revisit absolutely everything and rank the targets.”

Osisko Gold Royalties (TSX: OR; US-OTC: OKSKF) apparently likes what it sees, and has ploughed $10.2 million into Barkerville for a 19.9% stake, along with another $25 million for a 1.5% net smelter return royalty on the project, with both deals closing in February.

There are more connections: Barkerville has appointed as president Chris Lodder of Talisker Exploration — Osisko’s principal client for project evaluation; and Sean Roosen, president and CEO of Osisko, is now Barkerville’s co-chairman.

“It’s not every day that Sean Roosen comes banging on your door and asks: ‘Can I give you $25 million, please?’ That’s really a vote of confidence on the prospectivity of the property,” Geddes said.

The junior explorer plans to go cash-flow positive late this year by resuming small-scale production at its Bonanza Ledge deposit, which delivered 91,234 tonnes at 8.66 grams gold for 24,000 oz. gold between March 2014 and April 2015.

Over 50,000 metres of drilling last year went into the mineralized “BC structure,” which brushes up against the replacement-style orebody at Bonanza Ledge and trends for at least 1.4 km.

CEO Thomas Obradovich told The Northern Miner during a phone interview that internal studies show it’s more economical and less environmentally damaging for the company to access the mineralized bodies from underground, rather than pushing back the open-pit.

“We’ll have two years of production at Bonanza Ledge and three years of production at the BC vein, which will keep us in positive cash flow through feasibility and development of Cow Mountain,” he said, noting that a 43-101 resource estimate for the BC vein could be available by this year’s second quarter.

The company could process 74,000 tonnes per year at its 800-tonne-per-day QR mill — 110 km by road south of the property — which is under care and maintenance.

He said that BGM has been quiet on delivering news so that it can “release the data in bundles.”

He added that “we want our news to make a difference to our investors, something they can wrap their heads around and see what we’re doing, and what our goals are. Our share price has been moving lately, not just because the market improved considerably, but because we’ve removed the veil of stench that was around the company. People finally recognize that we’re the real deal and we have a real project here.”

The company’s treasury stands at $35 million in cash, while shares have traded within a 52-week range of 20¢ to 63¢ per share, and closed at 54¢ at press time. It has 259.6 million shares outstanding for a $152.9-million market capitalization.