Junior targets 2 million oz gold in 2022

As final assays of its productive 2021 exploration program roll in, Gold Terra Resource Corp. is working on a plan to boost the 1.2-million-ounce inferred resource of its Yellowknife City Gold Project substantially by drilling in new areas and proving up historic resources in and around the capital city of Northwest Territories.

The YCG project lies on the prolific Yellowknife greenstone belt, covering nearly 70 kilometers (43 miles) of strike length along the main mineralized shear system that hosts the historic high-grade Con and Giant gold mines. Gold Terra's exploration programs have successfully identified significant zones of gold mineralization and multiple targets that remain to be tested, which reinforces the company's objective of re-establishing Yellowknife as a premier gold mining district in Canada.

The junior, formerly called TerraX, also took steps in 2021 to acquire the historic Con Mine, itself, in a bid to control even more of the highly prospective brownfields near Yellowknife that has produced greater than 14 million oz of gold.

Gold Terra began 2022 exploration drilling with an ambitious program designed to complete 40,000 meters this year, or more than three times the 12,687 meters in 26 holes that it drilled in 2021.

The YCG project currently encompasses 800 square kilometers (309 square miles) of contiguous land immediately north, south, and east of the capital city of Northwest Territories.

Newmont option deal

Gold Terra amassed the land package through a series of acquisitions, which gives the junior control of one of Canada's six major high-grade gold camps.

In late 2021, the junior completed a definitive option agreement with Newmont Canada FN Holdings ULC and Miramar Northern Mining Ltd., both subsidiaries of Newmont Corp., to purchase 100% of the historic high-grade Con Mine, which produced more than 6.1 million ounces along the Campbell Shear structure in Yellowknife between 1938 and 2003.

Under the option agreement, Newmont retained a 2% net smelter royalty interest in the property and a future back-in right to acquire 51% interest in Gold Terra, assuming other terms of the agreement are met. The agreement closed Dec. 3.

By exercising the option, Gold Terra would acquire mineral leases and overlying surface rights, access to infrastructure, including underground openings and shafts, buildings, storage facilities and roads, and access to explore and potentially redevelop the remaining historic mineral reserves within the Con Mine property.

"We see considerable efficiencies through the (option) to acquire all of (Miramar Northern Mining Ltd.'s) assets, which comprise multiple valuable mining assets, including the 1,950-meters deep Robertson shaft, and 100% of the Campbell Shear, which remains open to the south and at depth," Gold Terra Chairman and CEO Gerald Panneton told investors Jan. 12.

The 35-year veteran miner, formerly executive chairman of Gold Terra since 2019, took the No. 1 management slot at the junior on Jan. 1 in a company restructuring that saw former CEO David Suda step down to pursue other opportunities.

Panneton is a geologist that is highly regarded for his leadership at Detour Gold from 2006-2013 when the Detour Lake project grew more than 10-fold to more than 16 million oz in mineral reserves from 1.5 million oz in mineral resources and entered production in just over six years. Panneton also raised roughly $2.6 billion in capital during his tenure at Detour Gold.

In 2011, Panneton and his team received PDAC's Bill Dennis Award for Canadian mineral discoveries and prospecting successes. Earlier in his career, Panneton spent 12 years at Barrick Gold Corp., where he was instrumental in advancing the Tulawaka and Buzwagi gold projects in Tanzania towards production.

Panneton joined Gold Terra in 2019, lured by what he considered the exceptional prospectivity of the Campbell Shear structure south of the Con Mine and also north of the Giant Mine.

In January, he described the Campbell Shear structure to investors as being "a very important gold plumbing system with tremendous potential."

"Also, with this option, we will be able to test some areas of the past-producing Con Mine that were left behind after closure in 2003 at a time of sustained low gold prices. These are included in the historical 2003 mineral reserves statement in addition to some mineral inventory that could amount to approximately 1 million oz of gold," he explained.

"In combination with Gold Terra's existing inferred mineral resource estimate of 1.2 million oz north of Yellowknife, 100% ownership of the existing and potential high-grade deposit at and surrounding the Con Mine will better support a balanced operation in the future."

The option agreement also would give Gold Terra control of another 80 square kilometers (31 square miles), or "10 percent more ground, but it's key ground," Panneton told investors in January.

Newmont also agreed late last year to make a strategic investment in the junior for gross proceeds to Gold Terra of C$1.5 million., and the junior established a technical committee that includes a member of Newmont's management.

Panneton said Gold Terra hopes to gain significant synergies and economies in acquiring the Con Mine Property.

The junior hopes to build a mill about 20 kilometers north of Yellowknife and operate it in concert with the historic Crestaurum open pit (for tailings disposal) and the Con underground workings to better the gold resource.

He told investors that he expects all stakeholders, including the Yellowknife community, to approve future gold production from the property and observed that 98% of the historic Con Mine's problems with environmental contamination has been resolved, and an ongoing reclamation program should be completed by the end of 2022.

Encouraging exploration results

Gold Terra's 2021 drill program, completed Dec. 18, targeted an underexplored section of the Campbell Shear formation over a strike length of three kilometers (two miles) immediately south of the former Con Mine. Panneton said the area, known as the Yellorex Zone, had seen no follow-up exploration since 1961 and has "tremendous potential."

The company initially planned a 10,000-meter drilling program designed to test the Campbell Shear over a strike length of nearly 1,200 meters

The exploratory drilling intersected the structure, found gold in all 26 holes that resemble mineralization in the Con Mine, and eventually completed a total of 12,687 meters.

Highlights of the drill results reported Jan. 11 include hole GTCM21-022, which intersected two exceptional zones of 19.74 grams per metric ton gold over 5.44 meters at 273.34 meters depth (includes one assay of 43.2 g/t over one meter), and a second wider zone of 4.16 g/t gold over 11.23 meters, including 10.12 g/t over 3.73 meters at 251.77 meters depth. These two high-grade intersections extend the gold-bearing zone by more than 50 meters along strike, to the northeast limit of the Yellorex Zone. Assays were pending for the program's remaining four holes.

"The assay results from hole GTCM21-022 confirm our geological model of high-grade mineralized zones within the Campbell Shear," Panneton said after reporting the results. "With our 2021 drilling program, all holes were designed to evaluate the Yellorex Zone along strike and at depth and the results have successfully extended the strike length and depth extension."

Gold Terra has mapped out an aggressive plan for 2022 to drill over a large area of the Yellorex zone with 50- to 75-meter spacing and return later with infill drilling to prove up additional resources. The junior aims to complete enough meters to boost the project's inferred resource to 2 million oz this year.

"We are confident that our upcoming 2022 drill program will continue to define continuity of the mineralized zones at depth and along strike, and in new unexplored areas at depth and between the Yellorex deposit and the former Con Mine," Panneton said, adding that the company "is delineating more quality high-grade ounces and confirming good high-grade continuity" in the Campbell Shear target.

One large exploration drill capable of extracting core to a depth of 1,500 meters is already at work on site, and the explorer intends to bring in a second big drill in March or April, Panneton said.