The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Historically long lab turnaround times threaten to weigh on 2022 mineral exploration across Alaska and Canada's North North of 60 Mining News – January 7, 2022
Freegold Ventures is awaiting assay results from 70% of a 38,000-meter drill program that got underway in February at its Golden Summit project north of Fairbanks, Alaska.
Despite getting an unusually early start to regional exploration at Dublin Gulch, Victoria Gold has yet to report any results from the 2021 drilling across this Yukon property.
Brodie Sutherland (left) and Nathan Steeves (right) reviewing drill core at HighGold Mining's Johnson Tract gold project in Alaska.
Assays are pending, the unofficial slogan of the 2021 mineral exploration season across Alaska and Canada's North, is a phrase that continues to echo in a void left by the lack of drill results going into the new year.
"'Assays pending' has become one of the least popular phrases around the industry this year, given the painfully slow turnaround time at the labs," Tectonic Metals Inc. President and CEO Tony Reda penned in a year-end update on the Vancouver, British Columbia-based exploration company and its Tibbs gold project in Alaska. "In some ways, the Tectonic team feels like kids eagerly anticipating Christmas as we wait for assays."
And, like the kids who had gifts stuck on a ship adrift in the Pacific Ocean on Christmas morning 2021, the team at Tectonic and dozens of other companies exploring the mineral potential across the North of 60 Mining News coverage area enter 2022 awaiting the bulk of their assay results to be delivered.
"As I write towards the end of December, we are still waiting on Phase II results, 85% of our assay results from the past season," Reda penned.
This slow-boat delivery of assays from North American assay laboratories creates numerous dilemmas for exploration companies that often depend on results to help guide drill targeting during the course of a five-month summer exploration season across Alaska, Northern BC, and the Canadian territories.
And these explorationists always rely on the lab analysis of the core drilled to demonstrate to financiers that millions of dollars invested in the past are turning up economically viable mineral deposits, and future investments are warranted.
The unprecedented slow assay turnaround times of 2021, however, are not just relegated to junior companies hoping to have a story to tell when global mining conferences such as the AME Roundup in January and PDAC in March arrive. When the calendar flipped to 2022, Victoria Gold Corp., operator of the largest gold mine in the Yukon, had yet to release any results from an exploration program that got underway in late May.
"Delayed laboratory results are an annual challenge in our industry. However, this year has been much worse than usual," said Victoria Gold President and CEO John McConnell.
Now, with most companies still waiting on assays going into the new year, this extraordinarily long delay is threatening to create a domino effect that could weigh on the 2022 mineral exploration season across Alaska and northern Canada.
"Investors buy explorers for results. When those results are super slow, investors get impatient or even anxious – 'Is the delay because the hole was actually a dud?'" Gwen Preston, better known as the Resource Maven, penned in an article on slow assay turnaround times. "The market also knows that the longer it takes to get results from a hole in Yukon or Alaska or Northern BC, the less time the company will have to drill follow up holes into a discovery."
Inflexible infrastructure
Backlogs at assay laboratories are nothing new for mineral explorers in the North of 60 Mining News coverage area. In fact, the ability to completely overwhelm the sample preparation facilities and assay labs with more samples than they can handle is a badge marking a robust exploration season.
While 2021 earned such a badge, the massive assay backlog goes beyond the more than 1 million meters (1,000 kilometers or 620 miles) of core from drilling mineral exploration projects across Alaska, Northern BC, Yukon, Northwest Territories, and Nunavut that was delivered to labs for analysis during 2021.
North America's assay lab infrastructure, which has never been nimble enough to adjust to the fluctuations of mineral exploration driven by capital markets and the seasonality of exploration in Alaska and Northern Canada, was further hampered during 2021 by COVID-related restrictions and a chronic shortage of labor, especially at sample prep facilities.
At least one Alaska-focused junior exploration company, Nova Minerals Ltd., took the initiative to help relieve some of the pain caused by slow turnaround times by building an independently operated assay prep facility at its Estelle gold project.
"While assay lab turnaround times and supply chain disruptions continue to frustrate, the newly commissioned on-site prep-lab is already helping to alleviate some of the challenges in relation to assay turnaround," said Nova Minerals CEO Christopher Gerteisen.
This proactive move has significantly lessened the wait for future-altering assay results.
By October, Nova announced that one hole drilled at its RPM discovery cut 373 meters averaging 3.8 grams per metric ton gold. The fact that the Australia-based gold explorer received assays from this and five other holes drilled at RPM, four short months after drilling began at this discovery target, is nearly as impressive as the long section of robust gold encountered in this hole.
Shortly after receiving all the assays from 2021 RPM drilling, Nova published an inaugural 23.1 million metric tons of inferred resource averaging 2.8 g/t (1.5 million oz) gold for the newest deposit at Estelle.
"This has really changed the future for Nova and our shareholders," said Gerteisen.
Blind targeting
Beyond the inability to satisfy current and entice future investors, the yet-to-be-determined amount of time between sending a sample to the assay lab and receiving an analysis with the quantities of minerals in that sample left many exploration companies somewhat blind when it comes to deciding where to target drilling as the 2021 season progressed.
"Good results mean continuing to chase a target, ideally right away while the weather window is open (for seasonal projects) and to be able to follow up one good hit with another in short order," Resource Maven penned in her article. "The 'right away' angle is just as important for bad results, as they tell a team that it's time to move on."
Even Freegold Ventures Ltd., which got a jump on most of its northern mineral exploration colleagues with a February start to the 2021 program at Golden Summit, is still waiting on the results from 70% of the resource upgrade and expansion drilling it completed at this intriguing gold project about 25 miles north of Fairbanks, Alaska.
"Freegold and most North American explorers experienced frustratingly long delays at the assay labs," the exploration company inked in a year-end update.
For the Freegold exploration team, this frustration goes beyond the inability to inform markets of the success of its program – assay results are an important component of vectoring drilling at targets where gold and other minerals are widely disseminated and not always easy to see. Fortunately, the company has a solid understanding of the geology that is being reflected in the success of its targeting strategy for the more than 38,000 meters of drilling completed at Golden Summit last year.
"Mineralization at Golden Summit is not necessarily visually obvious, however, with an over 90% hit rate in holes reported we are very pleased with our targeting efforts which continue to confirm our interpretation," the company reported.
The 2021 assay results reported thus far include holes that have hit wide sections of bulk tonnage mineralization, such as 421.6 meters averaging 1.11 g/t gold, and narrow sections of bonanza-grade gold, including one hole that cut 1.1 meters of 609 g/t gold.
Given the success so far, and with assays pending for another 48 holes drilled last year, Freegold "believes 2022 will be an exciting year."
Hopefully, Freegold will have results from at least some, if not all, the outstanding holes before drills begin turning at Golden Summit again in February.
One hole does not a deposit make
Golden Summit serves as a microcosmic example of the state of mineral exploration in the North of 60 Mining News coverage area going into 2022 – while most assays are pending, the ones that have been delivered are encouraging and sometimes fantastic.
In fact, one hole drilled at HighGold Mining Inc.'s project in Southcentral Alaska landed number three on Streetwise Reports' top five drill intercepts of 2021.
This hole, JT21-125, cut 56.6 meters averaging 18.69 g/t gold, 2.43% zinc, and 0.47% copper from a depth of 236.7 meters. The analysts at Streetwise were equally impressed with an "eye-popping" 32.9-meter subsection of this intercept running 31.69 g/t gold, 5.1 g/t silver, 1.82% zinc, 0.58% copper, and 0.47% lead.
This was an infill hole testing the lower reaches of the JT deposit, which hosts 2.14 million metric tons of indicated resource averaging 6.07 g/t (417,000 oz) gold, 5.8 g/t (397,000 oz) silver, 5.85% (275.3 million pounds) zinc, 0.57% (26.8 million lb) copper, and 0.71% (37.6 million lb) lead.
Though it did not make the Streetwise Report list, another hole at Johnson Tract cut 6.4 meters averaging 577.9 g/t gold, 2,023 g/t silver, 2.15% zinc, and 0.3% copper at the DC discovery zone about 2.5 miles northeast of JT deposit. This incredible intercept in hole DC21-010 included a 1.26-meter subsection averaging 2,860 g/t gold, 9,990 g/t silver, 5.04% zinc, and 0.88% copper.
"Without a doubt, this is a game-changing drill hole that firmly establishes the DC prospect as a second center of high-grade mineralization and validates our conviction in the multi-deposit potential at Johnson Tract," said HighGold Mining President and CEO Darwin Green. "The bonanza grade intersection in hole DC21-010 represents the highest grade drilled to date on the JT project, which is a significant achievement given the number of outstanding drill intersections generated previously in the main JT deposit area."
As spectacular as this hole was, it will take much more drilling to establish DC as another deposit that rivals JT.
"One hole does not a deposit make; no matter how good the numbers from a first hole, a discovery can't establish credibility without multiple phases of follow-up holes," Resource Maven reminded her readers. "If further drilling is also good the stock is off to the races; if not, the gains it made on the initial hit evaporate quickly."
HighGold's shares rocketed from C$1.01 to C$1.75 per share on the day it announced hole DC21-010 assay result but over the ensuing two months has settled to C$1.30.
In December, HighGold reported results from an additional six of the 17 holes that tested various targets across a 1,500- by 3,000-meter area at DC. While none were quite as spectacular as DC21-010, all encountered mineralization, including strong gold and silver intercepts in four.
And, of course, assays are pending from 25 of the 44 holes drilled at the JT deposit, DC discovery, and other targets tested during the 2021 exploration season at Johnson Tract.
With roughly C$25 million in working capital going into 2022, HighGold can afford to wait to see if any of the remaining 2021 holes hit the "eye-popping" mineralization tapped in some of the first 19 holes it has received assays for so far.
Pre-assay Benchmark investment
Much like HighGold, Benchmark Metals Inc. is still waiting for the majority of assay results from an enormous drill program at its Lawyers gold-silver project in Northern BC but is in no need of cash to execute its 2022 exploration plans.
At 83,570 meters of drilling during 2021, Benchmark had one of the largest programs in the North of 60 Mining News coverage area, and thus has one of the biggest backlogs of assay results.
"Benchmark awaits the majority of drill results from its large 2021 drill program to expand the gold-silver deposits and to delineate the potential at new discovery areas," said Benchmark Metals CEO John Williamson. "The 2021 program has provided significant gold-silver mineralization that will support expansion of the existing deposits in all directions."
Despite awaiting results from the majority of 2021 drilling carried out at Lawyers, Benchmark closed a C$40 million financing in December that included a substantial investment by Yamana Gold Corp.
"Following the offering we will have more than C$50 million available to explore and advance the Lawyers gold-silver project," said Williamson. "The company is encouraged by the significant participation in the offering from existing shareholders and are pleased to welcome Yamana Gold as a new investor in Benchmark."
By investing in Benchmark before the majority of 2021 assay results are published and incorporated into an updated resource estimate for Lawyers, Yamana and the other participants of the financing were able to establish and increase their position in the mineral explorer ahead of significant milestones ahead.
"The company is planning a significant C$30 million program in 2022 to advance engineering, permitting and add more near surface gold-silver ounces towards a preliminary economic assessment followed by a feasibility study," the Benchmark CEO added.
Yamana's strategy was confirmed by Executive Chairman Peter Marone.
"Yamana's investment in Benchmark Metals recognizes the significant technical strengths of management and equally significant technical merits of its project along with an immediate value proposition, with upcoming milestones that will further enhance that value and future potential," he said.
With plenty of cash in the bank and the technical merits of its project backed by the confidence of an invested gold producer, Benchmark is afforded the luxury of releasing its remaining 2021 assay results in batches that are associated with the various facets of its massive resource expansion, upgrade, and exploration drill program at Lawyers.
"Benchmark will distribute news as it becomes available from the laboratory with a specific focus on grouping drill-holes in areas that contribute to increasing gold-silver ounces," Williamson added.
Rounding up assays before Roundup
Other companies exploring mineral projects across Alaska, Northern BC, Yukon, Northwest Territories, and Nunavut must determine their own strategy as they slowly receive partial results from holes drilled during the long days of summer.
With AME Roundup less than a month away, this strategic decision only becomes more critical for many of these exploration companies that can only hope that they have rounded up enough assay results to tell a somewhat cohesive tale of their 2021 programs ahead of the important exploration-focused mining convention.
Alaska and northern Canada exploration companies that still have assays pending from the majority of 2021 drilling when Roundup arrives will be put at a disadvantage when it comes to attracting investments and planning for the coming summer season.
This delay and the setbacks it could have on 2022 programs is frustrating for both the exploration companies and their investors.
The Resource Maven advises patience during this historic delay in assay results that is no fault of the companies trying to unlock the rich mineral potential across Alaska, Northern BC, Yukon, Northwest Territories, and Nunavut.
"With so much uncertainty elsewhere, explorers need to be able to rely on their labs ... and right now they cannot. And there's no answer in sight," Preston penned in her newsletter. "My only takeaway is: be patient with companies in asking for results because – believe me – they are even more frustrated than you!"
You can read Resource Maven's informative analysis of assay lab backlogs and what they mean for the mineral exploration sector at https://resourcemaven.ca/blog/why-so-slow-labs.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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