Golden Predator rallies on Yukon gold estimate

Exploring the Brewery Creek Mine property in the Yukon. Source: Golden Predator Mining Corp.

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Golden Predator Mining Corp. [GPY-TSXV; NTGSF-OTCQX] on Wednesday January 15 released an updated technical report for its Brewery Creek gold mine in the Yukon. The report is highlighted by a sharp increase in the estimated oxide gold resources in both the indicated and inferred categories.

The announcement comes after Golden Predator recently said the Yukon government is allowing the company to proceed with the restart of the Brewery Creek gold mine without having to re-enter the permitting process. However, the company has not said when production will actually resume.

According to the updated estimated, the indicated oxide resource now stands at 21.14 million tonnes at 1.125 g/t gold or 765,000 ounces. That marks a 55% increase from an earlier estimate announced in a 2014 Preliminary Economic Assessment.

On top of that is an Inferred Oxide Resource, which now stands at 14.12 million tonnes at 0.967 g/t gold or 440,000 ounces.  That’s up by 78% from the 2014 estimate.

Also noted in the report is an additional 8.57 million tonnes of Inferred Sulphide Resources grading 0.985 g/t gold or 270,000 ounces.  The estimate utilized cut-off grades calculated separately for each deposit, ranging from 0.42 to 0.53 g/t at a gold price of US $1,325/oz reported within a pit shell calculated at US $1,600/oz.

Golden Predator shares rallied on the news, rising 11.8% or $0.04 to 38 cents on active volume of over 1.5 million. The shares are trading in a 52-week range of 18 cents and 50 cents.

“We are delighted by the substantial increase in oxide resources, which offer a significant impact on the longevity and economics of the Brewery Creek mine,” said Golden Predator CEO Janet Lee-Sheriff.

Brewery Creek is a former open pit, heap leach mine located 45 km from Dawson City. From 1996 to 2002, approximately 280,000 ounces of gold was produced from seven near-surface oxide deposits along the property’s reserve trend. The mine was put into temporary closure in 2002 following a collapse in the price of gold below US $300/oz.

However, Golden Predator said the Yukon Government has confirmed the validity of the existing quartz mining and water licenses for the Brewery Creek Mine

The company said it is authorized to restart mining activities that follow the previously assessed mine plans without further assessment and review. In addition, the company said it has received Indigenous community backing from the Tr’ondek Hwech’in, which has passed a formal Council Resolution in support of resumed mining and processing at the Brewery Creek mine under existing licenses.

Kappes Cassiday is currently conducting a feasibility-level study to determine the parameters for the Phase One plan to reprocess material on the heap leach pad. The study is focused solely on remediating and reprocessing the heap leach pad as a means of fast-tracking revenue and redevelopment of the site.

Any production decision would be based on the outcome of this feasibility-level study demonstrating technical and economic viability.

Brewery Creek is one of two key assets in the Golden Predator portfolio. The other is the 3 Aces gold project, which is also located in the Yukon. The 3 Aces property hosts an orogenic gold project and is located northeast of Watson Lake.

The company made an early decision to bulk sample at its 3 Aces Project when it realized that much of the gold contained in its veins is high-grade and nuggety. The ‘nugget effect’ occurs when the gold is not distributed evenly throughout the deposit but rather is accumulated in clumps within the veins with visible gold often sitting loosely in open spaces and along fractures.

To eliminate the cost of shipping bulk sample materials outside of Yukon, and to effectively manage the processing costs, Golden Predator built its own closed system processing plant.

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