Site visit: Prosper Gold duo eyes another win at Ashley

TIMMINS, ONT. — Prosper Gold’s (TSXV: PGX) management aims to repeat the success it had at Richfield Ventures’ Blackwater gold project in B.C. at Prosper’s new Ashley gold project near Timmins, Ontario.

Led by president and CEO Peter Bernier and vice-president of exploration Dirk Tempelman-Kluit, Prosper began drilling the Ashley project in early September, seven months after it optioned into the historic Ashley gold mine and surrounding claims. Initial results should be out shortly.

Bernier, who got his first taste of exploration staking claims around Hemlo at the age of 15, says Ashley could become a significant find.

The Timmins born and raised entrepreneur founded Richfield, a private exploration firm that became public in late 2007. Before listing on the TSX Venture Exchange, Bernier contracted then-retired geologist Tempelman-Kluit to complete a technical report on the company’s copper project. Tempelman-Kluit had spent most of his career at the Geological Survey of Canada’s Cordilleran Division, where he mapped large parts of the Yukon.

Impressed by each other’s work ethic, the two joined forces in 2005. Tempelman-Kluit started working as Richfield’s vice-president of exploration, playing a crucial role in the firm’s success story.

“That guy is amazing. He’s 78 now and he’s spry. He does all our 3-D modelling. He’s one of the smartest guys you will ever meet,” Bernie says one crisp September morning during a two-and-a-half-hour drive from the Timmins airport to the Ashley project.

We turn onto Highway 101 to Timiskaming. Bernier points out the headframe of the former McIntyre underground gold mine, near the McIntyre arena, where he grew up playing hockey.

The McIntyre mine, along with Hollinger and Dome, are the “big three” gold mines discovered during the Porcupine gold rush of 1909. They placed Timmins on the map as one of Canada’s leading gold districts.

“It’s kind of weird coming back here after all these years,” Bernier concedes. The executive, who’s also an avid hunter and Ultimate Fighting Championship fan, has lived in B.C. since the mid-80s.

During the economic downturn in 2008, Richfield switched its exploration focus from copper to gold. It thought it would have better luck raising money for a gold project.

“The Blackwater discovery was made in ’52. We went in there in 2009. Dirk told me that people didn’t know they were sitting on at least a million ounces,” Bernier says, taking his eyes off the road.

Tempelman-Kluit had recognized the presence of extensive hydrothermal alternation in Blackwater’s drill core photos, which suggested there was gold mineralization on the property. His insight paid off.

Richfield bought the Blackwater project in 2009. A year and after half later, it had delineated an indicated and inferred resource of 4.2 million oz. gold.

This attracted the acquisitive eye of New Gold (TSX: NGD; NYSE-MKT: NGD). The producer bought Richfield for over $500 million in June 2011.

The two received the AME BC H.H. “Spud” Huestis Award for excellence in prospecting and mineral exploration in 2011.

Bernier formed Prosper Gold in 2012. The junior optioned into the Star Porphyry copper-gold project in B.C. in 2013. But the project garnered little market interest, so the duo began looking for a gold project.

“We probably looked at 300 to 400 projects before we picked this one,” Bernier says of the Ashley project.

“We see huge potential here. If we didn’t, we wouldn’t be able to sell it ourselves,” Bernier says. The executive, along with Tempelman-Kluit, has his own money tied into Prosper. The two own a combined 25% of the junior. They have also forgone their salaries for the last two years to help keep the company afloat.

The Ashley project

Despite sitting in an established mining camp, some 17 km west of Alamos Gold’s (TSX: AGI; NYSE: AGI) Young-Davidson gold mine, Ashley is relatively underexplored.

The recently consolidated property sits in the southwestern part of the Abitibi greenstone belt and the western part of the Cadillac-Larder fault system. Historically, that system churned out a third of the estimated 160 million oz. gold produced from the Abitibi belt.

The 98 sq. km Ashley property includes the Ashley claim, which hosts the past-producing mine, as well as the Wydee and Matachewan claims and Galahad leases.

From the Timmins airport, the project is accessible via paved highways 101 and 66. Highway 66 leads to Matachewan, Ont., where it becomes Highway 566, an all-weather gravel road that leads directly to the former underground mine.

Discovered in 1930, the Ashley deposit was swiftly developed into a mine with an inclined shaft, six levels and 4,500 metres of underground workings. The deepest level extends only 210 metres below surface.

From 1932 to 1937, it produced 50,099 oz. gold from 157,636 tons at 0.32 oz. gold per ton (143,000 tonnes at 10.9 grams per tonne) from the high-grade Ashley vein.

Prosper describes the Ashley vein as a sheeted quartz vein, which contains visible gold, telluride and minor pyrite, chalcopyrite, galena and sphalerite.

The Ashley vein is one of the known gold-bearing vein systems on the project, along with Garvey. The Garvey vein, 1.3 km northwest of Ashley, generated a historic 26-ton (23.6-tonne) bulk sample yielding 0.86 oz. gold per ton (29.5 grams per tonne).

Tempelman-Kluit guides us towards the moss-covered remnants of the processing facility, hidden behind the trees. “You can see it was a substantial operation,” he says. He suspects a low gold price and high mining costs contributed to the shut down.

While a historic fire destroyed most of the mine’s records, it is clear the project has seen little exploration.

The Martin family held the claim from 1980 to 2015, Tempelman-Kluit reveals.

In 1981, oil and gas firm Petromet Resources optioned into the Ashley claim. It conducted geological mapping, trenching, surface sampling and drilling, before taking off in the mid-80s. Several other companies briefly looked at the claim, but never stuck around long enough to reopen the mine.

“They kind of fooled around. Nobody has committed,” Tempelman-Kluit says. “So we’re going to commit.” That said, he notes Prosper does not plan to dewater the former mine or increase its tonnage. Instead, it aims to discover a large deposit and delineate a resource, before selling it to another company.

After the Martins let their Ashley claim lapse, prospectors Randall Salo, Jacques Robert, David Lefort and Andrew McLellan staked it. Bernier — who knew the first two from his claim staking days — says Salo pitched the project to Prosper in late 2015.

“I looked at the initial data and I was interested, but not blown out of the water,” Tempelman-Kluit admits. However, after hearing about the project again, he reviewed more data on the project and was sold. The reason behind this was the location.

“I liked how in Ontario, when you want to look for a gold mine, you have to be near the headframe of an old mine. And here, we were right over top of it. So that was good.”

Other attributes included that the project was in a pro-mining jurisdiction, was easy to access and hosted high-grade gold vein systems, and bulk-tonnage syenite gold targets.

In February, Prosper signed an option agreement to own 100% of the 14.3 sq. km Ashley claim. It agreed to pay $700,000, 1.7 million shares and complete $700,000 in work expenditures over three years. The four prospectors will retain a 3% net smelter return royalty, where Prosper could buy back 2% for $2.5 million.

Also that month, it optioned into Alexandria Minerals’ (TSXV: AZX) Wydee and Matachewan claims. It agreed to provide 750,000 shares and invest $5 million over five years to earn a 75% interest. It could increase this to 90% by tabling a resource estimate of 1.5 million oz. gold.

The 48 sq. km Wydee and 22.3 sq. km Matachewan claims cover 30 km of strike of the Cadillac fault system, extending west and east of the Young-Davidson gold mine. The Wydee claim surrounds the Ashley mine and contains several syenite bodies that resemble the Young-Davidson host rocks, Prosper says.

The junior then picked up JCML Resources’ 13.5 sq. km Galahad leases in April. They sit 2.5 km southwest of the former Ashley mine.

With the land package consolidated and over $3 million raised in private placements, Prosper kicked off a 2016 technical program.

It completed extensive airborne geophysical surveys at both the Ashley and Matachewan claims. It conducted a large soil geochemical survey over the property, where it collected more than 7,000 samples over sections of the Ashley and Wydee claims.

The results from the airborne surveys — coupled with preliminary magnetic, resistivity and gravity results — showed a “west- to northwest-trending fabric thought to reflect the northwest continuity of the Cadillac Larder Lake break,” Prosper says. Meanwhile, soil results revealed a strong gold-tellurium-bismuth-in-soil anomaly over the Ashley mine. The anomaly extends northward and is 1.8 km long and 300 to 800 metres wide.

Prosper is the first to complete, comprehensive exploration on the property, Tempelman-Kluit says.

At the waste pile left from the former operation, which may still contain high-grade gold, he stoops over and picks up a black, red and white rock. “Basalt, syenite and vein. That’s it. It’s not complicated geology,” he says.

We reach Vein No. 1, which runs parallel to the main Ashley vein. “This gives you an idea that it’s a gently dipping vein, which is fairly difficult to mine. But there’s quite a bit of alteration. It’s not a vein, it’s what we call a ‘sheeted vein system.’ It has parallel sheets. That is also what we’re seeing with the drilling so far through the Ashley vein,” Tempelman-Kluit says.

On Sept. 6, Prosper started its initial 7,500- to 8,000-metre drill program. The program will focus on the known veins: Ashley, Garvey, Garvey South and Ashley West. It aims to test the connections between them and test for other gold-bearing structures. The budgeted $1 million program will wrap up by year-end.

“The Ashley vein is like somebody’s arm,” Tempelman-Kluit says. “Somebody has found the arm, but where’s the body? We’re looking for the body. The body is usually not that far away from the arm. The real question is: in which direction from the arm is the body?”

With drilling underway, the geologist is positive he will soon have an idea of what Prosper is sitting on. “At the end of the year, we won’t be able to come out with a resource. But we will know if it’s worthwhile to keep going.”