Snowline Gold Corp. (CSE:SGD) only came into being as a publicly listed company in March 2021, but this Yukon-focused gold explorer has actually been some 30 years in the making.
Father and son prospecting team Ron and Scott Berdahl, the latter now Snowline's Chief Executive Officer, spent years steadily building a land package in the territory’s underexplored Selwyn Basin. The company now holds 17 projects over 254,000 hectares. Nearby deposits include Kinross Gold's Fort Knox Mine and Victoria Gold’s Eagle Mine.
Exploration-wise, Snowline, which counts Eric Sprott and Keith Neumeyer as investors, is off to a flying start. It has completed initial drill programs at three never-before-drilled targets and hit visible gold at every one. It recently announced drill results from the Valley Zone target at its 11,000 hectare Rogue project, interpreted to host reduced intrusion-related gold systems (RIRGS), where one hole returned 2.55 grams per ton gold over 318.8 metres from surface.
Elsewhere, the company's Einarson project spans nearly 85,000 hectares and boasts both orogenic and Carlin-style gold targets.
Proactive spoke with Scott Berdahl in December about the company’s accomplishments to date and its plans for 2023.
What are the advantages of discovering a gold district as a junior explorer? Why is it so exciting?
It gives you the opportunity to continue to drive value creation through discovery. A lot of companies might have a single asset, whether it's a greenfield or brownfield target that they are able to find something new in, bring online or make a discovery and bring value to the table that way. But with a new district, there's just so much upside.
People talk about the Lassonde Curve, where discovery is an important value creation phase and then it peters out into that orphan period while development decisions are made and permits awaited. In the case of a district, you have the potential to just keep going out and making discoveries. And you never know – the first target you find is not necessarily the best in the district. So, we are trying to balance the discoveries we are making with exploration elsewhere to not lose sight of the forest for any single tree.
Obviously, the Valley target at your Rogue project is shaping up to be very exciting. Can you explain why it's so compelling?
Valley is particularly exciting because it's so high grade. It’s called a reduced intrusion-related gold system, which is traditionally a bulk tonnage target. What makes these systems work isn't grade, it's their scale, consistency and metallurgy. You have systems like the Fort Knox Gold Mine in Alaska, where they are currently mining material that is 0.3 grams per ton with a 0.1 gram per ton cut-off. That is in a gold-only system. And we're hitting large intervals of grades that are multiples to even an order of magnitude above that.
What are your next steps for Valley?
Well, first is getting the rest of the assays in. We're still waiting for 75% of the assays from Valley and 80% of the assays from drilling last season. We also drilled a similar target to the east called Gracie but, unlike Valley, that intrusion doesn't come to surface, so we're still looking to find it. Once we get those in, we will have a better handle on how we want to approach the target next season.
We would like to increase the density of drilling at Valley to get a better feel for the grade distribution, basically to demonstrate continuity and improve our grasp of a potential resource. And as I mentioned, moving forward, there is a lot of potential in the surrounding area. We have a cluster of these intrusions on our Rogue project, and we recently acquired another cluster of intrusions of a similar age and provenance to the south on our Golden Oly project.
Can you explain what the difference is between a reduced intrusion-related gold system like at Valley and the orogenic systems you have at Einarson?
There are a few differences. The key one is geometry. When you have a RIRGS, the mineralization is not in one vein, it's thousands of veins. In an orogenic system, you generally have one or several veins, and it might blow up to a wide, high-grade zone in certain areas and pinch out, but they can be quite inconsistent.
Don't get me wrong, orogenics can hold fantastic resources, but they require a lot more drilling to figure out what's there. And if you hit in one place and you hit 100 metres away, there's much less guarantee that there's anything between those two sites that's of substance.
In a RIRGS, you are also looking at veins, but thousands of them form basically a big cloud of mineralization, and they're much thinner veins than you would see in an orogenic system. They are often around a centimetre thick, but they stretch for hundreds of metres to a kilometre in length and tens of metres to hundreds of metres wide, down to depths of a kilometre. RIRGS are also more attractive from an exploration standpoint. In terms of being a cash-starved junior and trying to make your metres count, you don't have to drill with the same density as on an orogenic system to figure out what's there.
You have said that Valley hosts similar geology to Victoria Gold's Eagle Mine. What are the similarities and the differences?
They are both intrusion-hosted gold systems with mineralization hosted in arrays of sheeted quartz veins. The mineralogy looks to be very similar. The primary difference between this and Eagle, as well as Fort Knox and other reduced intrusion-related gold systems, is the vein densities.
Commonly, in a place like Eagle or Fort Knox, if you have three to five veins in a metre, you're looking at good-looking rock and good potential ore. At Valley, we're seeing big zones of 10, 20, even 30-plus veins per metre. And that really makes a difference when it comes to grade.
Of course, the veins themselves have to be mineralized, but getting that high density is really a strong driver for grade. At Valley, it seems like it's a more active geological system. It's a polyphase intrusion, so there was a lot going on, and it had a complex life and emplaced itself in the crust and cooled and that led to multiple pulses of mineralization. It's the same type of deposit formed multiple times on the same spot in very short order.
What news flow can investors expect from the company over the next year or so?
I think there will be two big phases. The first is getting the rest of the 2022 drill results in. We're still waiting for the vast majority of our samples from 2022, including from Valley. I think that system will really start to take shape.
At the same time, we're running metallurgical tests to get a better sense of how this mineralization will behave when it comes time to extract gold. I think that will be a big potential value add, but of course we don't know for sure until we get those tests back. But looking over the fence at similar kinds of systems, we have a lot of confidence.
The second phase of news will really come as we gear up and get into next season and continue to build on the success we've had. Hopefully, we will build out the Valley discovery and de-risk it further, as well as making additional discoveries on the many targets we now have. We have several dozen targets in our portfolio and a lot out there left to explore.
What's the aim here? Are you going to sell the project or partner it? Are you going to try and build a mine?
The aim is ultimately to create value for both shareholders and the Yukon. We will take it as far as we have to, and if an attractive offer were to come in, obviously, we would consider it. If it doesn't, and we continue to like what we see, we will continue to progress the project.
Building a mine sounds a little daunting, and it probably should. I think a lot of explorers have been burned trying their hands as developers but that doesn't mean that we couldn't restructure, rebuild a team or refocus at least part of the company on development while still not giving up on that exploration upside and the strong exploration team we have. I think there are multiple paths to drive value creation here. We will have to see what comes in the next few months and years.
Contact the author: giles@proactiveinvestors.com