By Peter Kennedy
Nighthawk Gold Corp. [NHK-TSXV; OTC-MIMZF] on Wednesday June 13 released an updated inferred mineral resource estimate for its 100%-owned Colomac Gold Project in Canada’s Northwest Territories.
Nighthawk Gold is focused on Colomac as it bids to show that former operator Royal Oak Mines may have misinterpreted the geology and therefore vastly underestimated the potential around a former open pit mine that produced 528,000 ounces of gold between 1990 and 1997.
The claims and leases that contain the former Colomac open pit gold mine are part of the much larger Indin Lake property, which covers 90,000 hectares and is thought to contain 20 gold deposits.
Five of those deposits are located on the Colomac leases, which were previously estimated to host a NI 43-101 compliant inferred resource of 2.1 million ounces of gold, grading 1.64 grams per tonne.
However, on Wednesday the company said the inferred resource has increased by 24.4% to 2.61 million ounces (50.3 million tonnes), with an average grade of 1.62 g/t gold.
The updated resource estimate incorporates 1,088 drill holes or 141,013 metres, including 913 historical holes or 85,178 metres, and 175 drill holes or 55,835 metres completed by Nighthawk between 2012 and 2017. Since the previous resource estimate in 2013, Nighthawk said it has drilled 145 holes or 44,600 metres. The results have been captured in the latest resource estimate.
The Colomac Gold Project contains at least five separate gold deposits that are open in all dimensions, including Colomac Main Sill, Goldcrest Sill, Grizzly Bear, 24 and 27. Only one of those deposits, the Colomac deposit, was historically mined.
Intermittent mining from 1990 to 1997 was limited to three shallow open pits developed on a steeply-dipping differentiated mafic intrusion (Colomac Main Sill).
The company says mining activities impacted only a small portion of the sill’s 7-km mineralized strike length.
The high-grade zone 1.5 at Colomac, which Nighthawk discovered in 2014, adds 317,000 ounces of gold to the new resource estimate at a grade of 1.85 g/t gold.
“We are very pleased to see that the consistent strength and continuity of mineralization hosted by the Colomac and Goldcrest sills continues to deliver strong resource growth,” said Nighthawk President and CEO Dr. Michael Byron. “It is notable to date that the deposit has only had 141,013 metres of drilling, yet is tracking to exceed 3 million ounces with an abundance of real estate not yet explored,” he said.
“Given that the current resource contains over 50 million tonnes of mineralized material, a number that may only account for half of its near surface potential, we believe that assessing a heap leach opportunity for Colomac is not only warranted, but if proven, could drastically change the nature of the opportunity.”
Nighthawk is backed by a number of high profile investors, including Kinross Gold Corp. [K-TSX; KGC-NYSE], Osisko Gold Royalties Ltd. [OR-TSX, NYSE] and financier Robert Cudney’s Northfield Capital.
On Wednesday, Nighthawk shares eased 4.08% or $0.02 to 47 cents. The shares are trading in a 52-week range of $1.06 and 47 cents.
Looking to the next steps for the project, the company said a drill program that will feature a minimum of 25,000 metres was initiated in early March, with three drills to be active on Colomac area resource expansion targets as well as several of the company’s regional deposits and prospects.
The exploration budget for this year has been set at $11 million, the company has said.
At Colomac, exploration for additional high-grade zones is ongoing, as is drilling to infill areas in the current resource in preparation for a future resource update.
With a cash balance of $25.2 million, the company has said it is fully funded for the next two years.
During its 2017 exploration campaign, the company said it drilled its first two holes at the Grizzly Bear deposit on the Colomac leases, and four holes on the North Inca gold deposit. The Grizzly Bear gold deposit lies 4 km south-southwest of Colomac high-grade Zone 1.5.
The company committed to drilling at Grizzly Bear last year because of its proximity to the Colomac Main Sill (which hosts the majority of the ounces in the current resource estimate), it’s vastly under explored condition, and historical high-grade intercepts.
Nighthawk has described the Northwest Territories as a Tier 1 jurisdiction for gold exploration, one that features supportive governments and First Nations, a remarkable metal endowment, well established support services and an efficient permitting process.