by Ellsworth Dickson
In an interview with Resource World, geologist Gerald Panneton, Executive Chairman of Gold Terra Resource Corp. [YGT-TSXV; TRXXF-OTC], shared some thoughts on gold and exploration in the Far North during the COVID-19 pandemic.
Panneton has over 35 years of exploration, development and management experience. He was the founder of Detour Gold Corp. and raised $2.6 billion to bring the Detour Lake Project into production, in just 6 years
Panneton and his team were the recipients of the PDAC 2011 Discovery of the Year award. He also spent 12 years at Barrick Gold where he was instrumental in the acquisition of Pangea Goldfields (2000) and subsequently advancing the Tulawka (2005) and Buzwagi projects in Tanzania towards production.
While the operations of some exploration and mining companies have been negatively affected by the COVID-19 pandemic, some companies’ share values have been going up. Panneton looks at this seeming paradox. “Social distancing has been a problem for some mining companies including transportation to get employees to and from their projects and mines due to the quarantine requirement.”
“While the world’s economies and many mining operations have come to a stop due to the coronavirus, it is the rising price of gold that is driving up the shares of gold producers,” said Panneton. “Not long ago gold was US$1,200 an ounce – now it’s US $1,727 an ounce. One of the reasons why gold is going up is that governments are printing money to bail out people and companies in distress. Investments in gold account for a lot more with record sales of gold-backed ETFs [3,185 tonnes globally] and a recent 36% increase in gold coin demand [76.9 tonnes]. Another is uncertainty for the future which brings out gold’s safe haven status.” He thinks that the COVID-19 pandemic will have a long term effect.
Panneton is of the view that while predicting the future is difficult he believes that we will have a gold run for many years. He commented that finding gold is getting more difficult and more expensive. “Gone are the years when there were easy to find gold deposits on the surface, he said. “We are now looking at recovery costs of at least US$1,200 an ounce, including capex and sustaining capital expenses; however, there is more of a chance that gold will be going up than down. The gold supply is suffering at a time when there is less gold available and more people that want to buy it.”
He notes that platinum group metals and silver have important industrial uses making their price behavior more dependent on supply and demand; however, he said that when the price of gold goes up silver usually follows.
Has the COVID-19 pandemic seriously disrupted the exploration and mining industry? “It depends on several factors,” explained Panneton. “If you are operating in the remote north where exploration and mining is considered essential, there has been little effect from COVID-19; however, we are now waiting for the second wave of infections that is coming. Hopefully, people will be more prepared than during the first wave. Fortunately, our project in the Northwest Territories has been little affected, and the main reason is the location near the city of Yellowknife.”
He commented that as we get through the pandemic, exploration and mining companies will still have to be careful. There still could be transportation and possibly quarantine issues getting employees to and from the field.
At Gold Terra’s 100%-owned 783 km2Yellowknife City Gold Project only about 10 km from Yellowknife, the company has completed drilling 11,000 metres with no more than two workers at each drill site, while everyone else was respecting the distancing, and each other’s work place for logging, sampling, and splitting cores. Panneton said he feels fortunate being close to Yellowknife with its services and workers.
Gold Terra recently released results of the remaining six drill holes from the Sam Otto advanced exploration target. This concluded the winter drilling program at Sam Otto with 34 holes completed. Highlights included 1.30 g/t gold over 50.6 metres, including 3.02 g/t gold over 9.0 metres in hole TSO20-083. Hole TSO20-081 returned 1.18 g/t gold over 51.65 metres, including 2.07 g/t over 11.05 metres and 2.03 g/t over 13.5 metres.
The Yellowknife City gold project encompasses contiguous claims immediately north, south and east of Yellowknife. The project lies on the prolific Yellowknife greenstone belt, covering 70 km of strike length along the main mineralized shear system that host the former-producing high-grade Con and Giant gold mines which produced 14 Moz from 1938 to 2005. The company’s exploration programs have successfully identified significant zones of gold mineralization with multiple targets remaining to be tested. For example the Campbell shear which hosted 90% of the Con and Giant mines represent only 8% of the main bearing gold structure.
In November 2019, Gold Terra released its first NI 43-101 mineral resource estimate for the Crestaurum/Barney and the Sam Otto/Mispickel gold deposits. The Inferred Resource estimate of 735,000 ounces consists of a pit-constrained Inferred Resource of 11.6 million tonnes averaging 1.4 g/t for 523,000 ounces of contained gold and an underground Inferred Resource of 1.2 million tonnes averaging 5.7 g/t gold for 212,000 ounces of contained gold. It is a start, and with 2020 drilling, updating the resources will come more regularly.