TerraX Minerals advances Yellowknife gold project

Joseph Campbell has had his fair share of success in the mining industry. He was part of the team that discovered the Meliadine gold project in Nunavut, which Agnico Eagle Mines (TSX:AEM; NYSE: AEM) snapped up for $697 million in cash and shares in 2010.

But the chairman and CEO of TerraX Minerals (TSXV: TXR; US-OTC: TRXXF) says the junior’s Yellowknife City gold project — which is on trend of two of the highest-grade gold mines in Canadian history — is one of the most exciting projects in his 35-year career.

The project is on the outskirts of Yellowknife and lies on the Yellowknife greenstone belt, covering 23 km of strike length on the southern and northern extensions of the shear system that hosted the high-grade Con and Giant gold mines, now under closure for clean up, and where grades ran at 16 grams gold per tonne.

“You don’t get the opportunity often to tie up a belt that has had two major deposits on it,” Campbell says in an interview from Ottawa.

“The Giant mine produced 8 million oz. gold and Con produced 6 million, and we’re in the same rocks. We’re right next door. It’s not like we’re out in the moose pasture and trying to make a story that we’re on the same belt. We’re literally on the same structures that hosted those two deposits.”

The southern section of the Yellowknife City gold project that TerraX calls the “Southbelt” is next to the Con mine, while the northern section of the project known as the “Northbelt” is next to the Giant mine.

“You can walk off the Con property right onto our property,” Campbell says. “We came into this project because it’s in a major mining camp, and it’s no different than being able to stake ground next to the Dome mine in Timmins.”

What’s more, Campbell says, while the Yellowknife greenstone belt is similar to the Abitibi, it has been under-explored.

“It’s been a bit of a forgotten belt in terms of Archean greenstone belts,” he says. “It’s no different than if you worked in the Abitibi. The geology on this property is identical to the Abitibi. It has the same-aged rocks, the same types of rocks and the same types of structures. For whatever reason, it just got ignored by the exploration industry, and when we had an opportunity to pick it up in 2013, we did. It was during a slow time for the gold industry, but it was an opportunity we could not pass on.”

Highlights of drilling the Northbelt area over the last two years include 8 metres of 60.6 grams gold per tonne and 7 metres of 23.6 grams gold in the Mispickel zone; 49.7 metres of 1 gram gold and 30.7 metres of 1.33 grams gold in the Sam Otto zone; 21 metres of 2.97 grams at the Shear 20 zone; 5 metres of 62.9 grams gold at the Crestaurum zone; and 22 metres of 6.35 grams gold at the Barney zone.

In the second week of January, the company released assay results from the other 23 holes (6,400 metres) of its 2016 drill program at Northbelt.

Highlights from the Sam Otto main zone included 129 metres of 0.52 gram gold, including 32 metres of 1.24 grams gold; and 102 metres of 0.53 gram gold, including 38 metres of 1.04 grams gold.

In the Sam Otto hanging wall zone, intercepts include 85 metres of 0.53 gram gold, including 26 metres of 1.13 grams; and 100 metres of 0.51 gram gold, including 31 metres of 1.29 grams gold.

TerraX also reported results from a new zone at Sam Otto called Dave’s Pond, highlights of which were 11.5 metres grading 2.42 grams gold including 2.4 metres of 9.89 grams gold and 2 metres of 2.43 grams.

“Sam Otto is a large system, so the opportunities there are tremendous,” Campbell says.

He says that the Sam Otto zone has potential to form a bulk-tonnage target that could capitalize on the excellent infrastructure around Yellowknife and supplement potential mine development from previously reported higher-grade zones. The latest drill results also extend the gold mineralization for at least 350 metres of strike and 250 metres deep, with 30- to 50-metre wide zones of more than 1 gram gold.

“We’re on great ground and our work has shown good results,” Campbell says. “We have multiple deposits or mineral showings that we’ve defined with drilling, and some of them are quite high grade. Mispickel is an example of a high-grade zone, and these latest results at Sam Otto show that we have a wide lower-grade system.

“The thing we like to point out is that all the zones and mineralization we’ve talked about in our press releases over the last two years is along a 5 to 6 km strike length. It’s a condensed core gold area where these zones are showing up, and it’s still pretty virgin. Everything we’ve drilled to date comes to surface — we’re not drilling into the bowels of the earth, like what goes on in some of the more mature camps.”

Campbell is eager to drill Southbelt, which has multiple high-grade and high-priority targets. The company has submitted an application to the Mackenzie Valley Land and Water Board for a land-use permit to do so. The application was accepted on Dec. 2 and the company should hear within 42 days whether the permit is granted. At Northbelt, TerraX applied for the permit in 2014 and received it in 45 days.

“People have had bad experiences trying to get permits, but I would have to say that if you fill out the forms the way you’re supposed to, the system works fairly cleanly and it’s not a hindrance to doing work in the territory.”

In the meantime, TerraX has been surface-sampling Southbelt. A total of 530 samples have been taken from outcrop across wide areas of the property — which covers 8 km of strike length along the belt — and of those, 88 have returned values greater than 0.50 gram gold per tonne. Of those 88, 10 samples returned high values, including 3 grams gold, 15 grams gold, 16.4 grams gold and 33.6 grams gold.

The company also continues to stake more ground. “Our whole strategy coming up here was to stake the greenstone belt, which is the most prospective area,” he says. “And for anybody else that comes in, the pickings tend to be pretty slim.”