As an experienced geologist, Gold Basin Resources Corporation (TSX-V:GXX) CEO Colin Smith was first drawn to the company as an investor before taking up his management role at the start of 2023.
Smith has over 18 years of experience advancing exploration and mining projects in North and South America, ranging from early-stage project generation and exploration to M&A takeover, so clearly he should know what he is talking about.
Gold Basin, listed on the TSX-V and OTCQB, is a member of Discovery Group, an alliance of public companies focused on the advancement of mineral exploration and mining projects worldwide. The company is 100% owner of the Gold Basin property located in the Gold Basin Mining District of Mohave County, north-western Arizona, which comprises a total land footprint of 42 square kilometres.
The Gold Basin project is located within the transition zone between the highly prospective geology of Walker Lane and the southern copper belt, and is extremely well-situated with respect to access and infrastructure, in a tier-one mining jurisdiction. The project is located just 1.5 hours from the mining hub of Las Vegas via the I-93 highway, hosts excellent access throughout the tenements via pre-existing secondary roads, and is served by hydroelectric power direct from Hoover Dam.
Recently, the company announced preliminary results from a Phase 2 resource definition reverse-circulation (RC) drill program, which showed multiple at- or near-surface oxide gold intercepts at the Red Cloud target over 40 metres (m) in thickness with grades exceeding 1 gram per ton (g/t) gold (Au).
Proactive: You only took over as Gold Basin’s CEO at the start of this year, what drew you to take on the position?
Colin Smith: I was introduced to the story about a year ago by John Robins and Jim Paterson, who are principals of Discovery Group and current directors of Gold Basin. It was an asset that fit perfectly into the mould of a Discovery Group company, offering the opportunity to add tremendous value through exploration by leveraging both an extensive and underutilized historical dataset, and modern-day exploration techniques. As an investor, I want to invest in companies that have an exit strategy, be it a sale, merger, or development into a mine – major catalysts that can add tangible shareholder value. Gold Basin absolutely has that path, I believe.
To give context to my belief in the project, when I first heard about the story from John and Jim last year, I immediately went out to the open market and started buying shares. So as a private investor, well before I knew I'd actually be involved in the company as management, I bought in. I was a big participant in the recent private placement, and everybody in the management team is a significant shareholder. So, we all believe in the project and are working hard to develop Gold Basin into an attractive take-out asset.
As an experienced geologist, can you tell us what is exciting about the Gold Basin project?
I am just back from the field at Gold Basin, having been there with a group of team members, and I am more compelled than ever about the upside potential of the project. It is a large land package, with over 42 square kilometers of contiguous ground which has seen very little modern day exploration. In fact, the project saw about a 20-year exploration hiatus. The previous owner had the project fully permitted as an open pit heap leach gold mine in the mid-1990s. Unfortunately for them, Bre-X happened, which destroyed the gold market at the time, and that company ended up de-listing, and then the project sat idle for about 20 years. It wasn't until 2016 that modern-day work really recommenced at Gold Basin. The upside potential is two-fold: continue to prove up the growing at-surface oxide gold deposits, which were historically drilled but of a vintage that can't be used in a compliant NI 43-101 resource.
Contemporaneous to resource definition drilling, we will be commencing property-wide targeting, and the regional exploration potential of the project is quite staggering. You cannot drive more than a quarter mile down the road without seeing multiple old mine workings, be it old adits or small pits, and then you look at the database and there's no drill holes anywhere near that site. So, there is incredible mineral endowment that I think is yet to be found, in addition to what is being defined right now. For us to be able to leverage the historical data and then add to it with modern-day exploration techniques such as geophysics, WorldView spectral, LiDAR, and of course quality boots-on-the-ground geology, I think we’ll see real growth in the asset. So preliminary assays from the first drill program at the Red Cloud target, which were released recently showed some of the best oxide gold results.
What does this tell you about the project overall?
It further confirms the presence of at-surface high-grade oxide gold zones, which largely remain open along strike. Some of these were historically drilled, as I said, but in the case of Cyclopic, which sits on one of two regional northwest-trending structures, we increased the strike length of that deposit from about 700 metres to 1.7 kilometres (km). It was drilled to a certain extent, but we have stepped out and really grown the breadth mineralization. On a sub-parallel structure to the Cyclopic Fault is what is called the Stealth Fault, which hosts three high-priority target areas - Stealth, Red Cloud, and PLM which is further down the structure by approximately 3 kilometres from Red Cloud.
We have received and released assays for 29 of 41 RC holes drilled in 1Q at Red Cloud and PLM, which included multiple 100-plus gram per meter holes from surface of oxide gold. This is an area that's highly explorable and in the case of both Red Cloud and Stealth there is large openness along strike. Furthermore, these two showings share the same structure, separated by a 600-metre gap, and there are also a couple of historical holes in that gap which hit gold.
So, one of our priority targets for follow-up 2Q drilling is to test that gap for continuity. If Stealth and Red Cloud are indeed connected at depth, that would establish a 1.5-km-long at-surface oxide gold deposit on a sub-parallel structure to the 1.7-km-long Cyclopic Deposit. So, from a maiden resource point of view, we really like what we're seeing, and all this drilling is ultimately going to support a maiden NI 43-101 compliant resource in 2023.
Gold Basin closed a financing earlier this month which was oversubscribed, indicating that investors are very interested in the company. How will these funds be deployed?
First and foremost, we're waiting on the final 12 RC drill holes, the assays of which are due in probably the next month, give or take. Subsequent to that, based on the encouraging results from Red Cloud in particular, we are going to get the RC drill back onto site and drill probably another 2,000 meters, stepping out into that gap, and along the open strike. It’s also worth stating that these two northwest-trending structures that I've been referring to as the Stealth Fault and the Cyclopic Fault are each about 10 kilometres in strike length, and have only been drill tested over about 20% of their trends.
So, as we move away from the areas of known gold zones, we're going to start testing these regional structures. An example of that is the trend from Red Cloud to PLM, which we're interpreting to be on the same structure, with about a 3 km gap between the two targets. As you move to the southeast from Red Cloud, the topography goes from an area of high relief into an area of low relief, and bedrock goes undercover. Then, sure enough, there is bedrock exposure at PLM, 3 km to the southeast, and sure enough there is a historical mine shaft and positive drilling results. One of our 2023 holes from PLM hit 24.4 meters of 2.22 grams per tonne gold from surface, or thereabouts. We know there is high-grade oxide gold at PLM, and that there is no drilling along that 3-km-long trend in between Red Cloud and PLM.
So, we are really excited to start testing some of these regional features as we move through the year. Ultimately, in the near term, the aim is to get the RC drill back to site and step out from these areas of open mineralization.
The company is focused on just the one project currently, would you consider looking at other opportunities in the future and in what areas?
Absolutely. We're quite open to M&A opportunities in the southwestern US, particularly in the gold space. There are few better exploration and mining jurisdictions than Nevada and Arizona – locales which, for the most part, can be readily permitted from an exploration standpoint and, ultimately, as was the case for Gold Basin in the mid-1990s, can be fully permitted as an open pit heap leach gold mine.
One of the other advantages of Gold Basin is the excellent in-place infrastructure and access. Being 1.5 hours from Las Vegas on the I-93 highway, with high-power electrical lines literally crossing the southern portion of our project area – these substantial prior investments facilitate major CAPEX savings down the line in a development scenario. So, we are always drawn localities with extensive infrastructure, and of course, and southwestern US is very well-endowed on that front.
So, what should investors expect from Gold Basin in the near to medium term?
Assays from the pending 12 holes of our 1Q RC drill program are due back in April, and as I said, we'll be mobilizing at least one RC rig back to site in 2Q for around 2,000 metres of follow-up drilling. We will also be ramping up the property-wide exploration, aided by some recently-flown LiDAR data, which will be hugely beneficial for regional structural interpretation. Most importantly, we have engaged two highly experienced field geologists who have worked in the Discovery Group for many years and have significant gold discoveries in their credentials. Ultimately, we are finally getting boots back on the ground at Gold Basin to investigate some of these old targets that haven't been drilled or explored with modern means.
We're pretty well cashed up after the oversubscribed private placement in 1Q, which was originally looking to raise a little over $1.2 million but ended up being upsized to $2.5 million. These funds will support significant exploration through much of 2023.
As I said, Gold Basin drilling from 2019 to present day is largely to support the maiden NI 43 101 resource, planned for this year. From a regional context, we have extensive historical data to leverage and reinterpret with our new data, and knowing that these gold-bearing structures have only been drill-tested over maybe 15-20% of their collective strike lengths, there is real blue-sky potential for a multimillion-ounce gold system here and we'll do our best to prove it.
Contact the author at jon.hopkins@proactiveinvestors.com