Blackwater reveals its strength for Richfield

SITE VISIT

QUESNEL, B.C. — One hundred and fifty million years ago the volcanic and sedimentary rocks of the Hazelton Group were laid down in what is now central British Columbia. The volcanic deposition remained active for some time, creating a tuff dome on the northeast flank of Mt Davidson.

“Some flowed, some froze and cracked, and much of it then fell or tumbled downhill, essentially forming a solid cap over an overflowing well,” says Dirk Tempelman- Kluit, vice-president of exploration for Richfield Ventures (RVC-V). “The well kept wanting to pump fluid up and that force broke the cap up, repeatedly.

“It’s not nicely layered. In fact, it’s a complete mess. It’s anarchy.”

Within that mess, however, are black sulphide veins carrying considerable gold. The veins run through many lithologies and sometimes carry other metals, such as silver, lead and zinc. It is a jumbled sort of mineralization, to be sure, but with intersections such as 199 metres grading 1.47 grams gold per tonne, 317 metres grading 0.95 gram gold, and 282 metres of 1.41 grams gold, it is gold nonetheless.

And Richfield has set itself up to find more gold year round. The company spent much of the summer working to prepare the road and camp at the Blackwater project for winter operations and recently raised almost $15 million to double its drill program to 50,000 metres.

It may not have a defined resource yet, but Blackwater is rapidly becoming a bulk-tonnage gold zone with lots of room for expansion. In a few months, who knows what it might become.

Finding Blackwater

Richfield became a public company in 2007, based on its Mouse Mountain copper-gold project. But the company immediately began looking for a gold-focused project. The barometer for the potential projects passing through the office was Tempelman-Kluit, a renowned geologist and former director of the Cordilleran Division of the Geological Survey of Canada who has worked in B.C. and the Yukon for more than 40 years.

One project that landed on Tempelman-Kluit’s desk was Blackwater, a Silver Quest Resources (SQI-V) property available for joint venture. Tempelman-Kluit immediately liked what he saw and in March 2009, Richfield inked a deal to earn a 75% stake in the property. Two months later, Richfield’s president and CEO Peter Bernier struck a deal with the private owners of the adjacent Dave property to earn 100% of that land package. Richfield has since completed its earn-in and the previous owners retain a 2.5% net smelter return royalty.

Richfield was by no means the first to take a stab at Blackwater. Mineralization in the area was discovered in 1973, when a regional silt survey revealed a zinc anomaly in a stream several kilometres away. Follow-up geochemical and geophysical surveys led to drilling; between 1985 and 1994 the property saw 36 diamond and 34 reverse circulation drill holes. The effort outlined two zones of anomalous mineralization, known as the Gold and Silver zones.

In 1994 Kennecott optioned the project and completed another 10 drill holes. It then sat idle through the dark days of the late 1990s and early 2000s, until Silver Quest picked it up in 2005. The junior punched five holes into the project, one of which discovered the New zone, then followed up on the New zone hit with two further holes.

Despite all the work that went into Blackwater before Richfield, no one had realized its potential. Bernier believes that is because many times explorers only find what they seek. Previous operators at Blackwater were focused on finding fault-controlled, high-grade veins because, at the time when earlier programs were underway, intersections of 1 gram gold were simply not interesting.

How times have changed.

With the price of gold having climbed from just over US$900 per oz. when Richfield picked up Blackwater, in March 2009, to its current record level above US$1,300 per oz., intersections of 1 gram gold over good lengths have become very interesting. They are especially so when the mineralization starts near surface, which it usually does at Blackwater.

Richfield’s drilling success means the three zones at Blackwater are quickly becoming one large zone, which currently strikes east-west for 1.1 km and stretches across some 700 metres width.

The west side of the zone, which is known as the Quest area, has returned several promising results of late. Richfield was drawn to the area by a 2005 hole that returned 86 metres of 1.44 grams gold and 4.7 grams silver from 94 metres depth. Now the company’s follow-up drills have hit such intercepts as 281.2 metres grading 1.41 grams gold and 3.6 grams silver from 23 metres depth in hole 71, 100.9 metres carrying 0.83 gram gold and 1.2 grams silver from 189 metres in hole 70, and 86 metres of 0.79 gram gold and 2.4 grams silver from 56 metres in hole 73.

Moving east, the central segment of the mineralized footprint at Blackwater is known as the Richfield zone. In 2009 the area returned several strong holes, such as 207 metres grading 1.06 grams gold and 5 grams silver from 8 metres depth and 148 metres of 1.26 grams gold and 5 grams silver from 11 metres depth.

And the long, well-mineralized intercepts continued in 2010. To start the year off, hole 59, collared on the north side of the zone, cut the longest intercept on the project to date: 446 metres grading 1.04 grams gold and 4.3 grams silver, from 7 metres downhole. Hole 64, collared in the middle of the zone, returned 260.3 metres grading 1.57 grams gold and 6.7 grams silver from 6 metres downhole. Hole 65, drilled from the same collar in the opposite direction, cut 198 metres of 0.88 gram gold and 6.2 grams silver from 37 metres depth.

Now results are coming in from the east side of the zone. Hole 74 hit 232 metres averaging 0.75 gram gold and 5.4 grams silver from 30 metres depth, hole 76 cut 317 metres of 0.95 gram gold and 7.3 grams silver from 117 metres depth, hole 78 returned 152 metres carrying 1.23 grams gold and 8.2 grams silver from 98 metres depth, and hole 83 intersected 89 metres of 1.48 grams gold and 6.5 grams silver from 45 metres depth.

The third area at Blackwater sits north of the east side of the Richfield zone and is known as the Gold zone. It is not an area Richfield has targeted this year, primarily because it lies on the portion of the project optioned from Silver Quest. Richfield has spent the required $1.5 million to earn its 75% stake and is now waiting for Silver Quest to decide how it wants to manage its 25% stake. The property line dividing Richfield’s 100% owned land from its 75% owned land runs right through the mineralized zone.

Regardless, the Gold zone’s promise is evident from holes drilled prior to this year. Earlier results include 98 metres of 1.25 grams gold and 4.8 grams silver from 62 metres depth and 82 metres of 2.45 grams gold and 4.3 grams silver from 57 metres depth.

At Blackwater, gold comes with hydrothermal fracturing. Massive sulphide clasts, broken rocks, and sulphide veins are all indicative of gold mineralization. In addition, Tempelman-Kluit has identified another indicator, this one a bit odder: manganese garnets. And they fit into his theory that the geologic activity at Blackwater might stem from a porphyry body at depth.

“These garnets — they come in gangbusters on the west side of the zone,” he says. “The garnets grew elsewhere and were brought here, tied into some kind of deep plu-tonic event. “

More generally, Tempelman-Kluit feels the amount of geologic activity bodes well for a bigger system at depth: “This is such a big hydrothermal cloud of smoke, I think there must be a fire down there somewhere.”

One other aspect of the story for which there are no answers yet is metallurgy. Richfield has not yet completed any metallurgical test-work, choosing to concentrate instead on drilling in advance of the first resource estimate. None of the mineralized intercepts have included visible gold; even with magn
ification, gold is not visible within the black sulphide veins.

Funding and logistics

As results from this year’s drill program started to come in, Richfield watched its share price climb from less than $1 in June to above $2.70. The company took advantage of the lift and raised $14.6 million in a non-brokered private placement, selling 7.5 million units at $1.95 apiece. Each unit comprised a share and half a warrant, with warrants exercisable at $2.50 for 18 months.

The cash allowed Richfield to double its planned drill program to 50,000 metres. Bernier says the added drilling will “allow for a more comprehensive resource estimate and a more thorough understanding of the deposit and its geology.” The company has two drill rigs turning onsite and will keep drilling through the winter.

That plan is only possible because Richfield spent considerable time and money this summer preparing its exploration camp for the winter. When The Northern Miner visited, the place looked more like a construction site than an exploration camp. A new building was going up near the living quarters, adding a new eating and recreation area, while across camp other workers were building a second large new building, this one to accommodate an expanded core shack and sample prep area.

The camp was already road accessible from Vanderhoof, B.C., 150 km to the north, but Richfield upgraded the road such that it can now handle semi-trucks through the winter.