HighGold Mining Inc (CVE:HIGH) offers investors exposure to a suite of highly prospective assets in attractive, low risk locations. In Alaska, the company holds 100% of the Johnson Tract gold exploration project, which already boasts a 2020 indicated resource of 750,000 gold equivalent ounces at a grade of 10.9 grams per ton (g/t) gold and potential for more. And in the famous Timmins camp, last year, the company hit 190.5 grams per ton (g/t) gold over 0.5 metres (m) in one hole at its Munro-Croesus project.
HighGold says its Environmental, Social, and Corporate Governance (ESG) credentials are also worth highlighting. At Johnson Tract, HighGold was chosen by native Alaskan corporation Cook Inlet Region Inc (CIRI), to explore and advance the property. CIRI, in turn, is owned by around 9,000 Alaskan native shareholders. Proactive recently sat down with CEO Darwin Green (DG) to get the latest on the company.
PROACTIVE: 2020 was certainly a busy year for HighGold in terms of exploration, Darwin. What would you say did you learn from last year's work?
DG: Three big takeaways for us, Giles. One was that the deposit is open to expansion, particularly down plunge. We came into the program at the front end of the season thinking the deposit was constrained in terms of how much we could take it to depth....but that was the big 2020 breakthrough. We found that the deposit continued at depth and, by the end of the season, we had not yet found the bottom.
The second takeaway was all about the portion of the main deposit that was cut off at depth by a fault. Work done by earlier operators suggested the deposit was cut off at depth by a post mineral fault and displaced to the northeast, hence, the bit we called the Northeast Offset target. Chasing this was a priority for us last year and we drilled an area some 700 meters northeast of the main deposit area – where we anticipated the cut-off portion had slid along the fault. We discovered two things at Northeast Offset target: one - a different style of mineralization altogether, a zinc rich Volcanic Massive Sulphide (VMS) style of mineralization – different from the main JT deposit. We also learned that there is a second fault that affected the bottom part of the main deposit so we’ve recalibrated our geological model and in 2021 will be drilling to the east of last year’s Northeast Offset at a target we’re calling Northeast Offset 2.0. The Northeast Offset is alive and well, just slightly to the east.
We're going to follow up on that theme this year. The third big takeaway was the district extent of the highly prospective targets. There are a variety of other prospects out there that had not seen any work since the very earliest reconnaissance work in the 1980s. So, we got some work done on those properties and we think the odds are high that we’ll find multiple deposits on the property, within a few kilometers of the main Johnson Tract deposit. Really exciting stuff.
PROACTIVE: Is the whole thing developing into a much larger potential deposit than you thought or is that too simplistic?
DG: I think we always came in there believing that. I think now the market should have a better sense of that being the case, right? Last year, going in, the market probably felt there was one specific target. It was a bit of a binary story. Now, it's very clear that the deposit has legs to it and is growing. We also have this offset target, and what's really emerging is that this deposit sits within a property package and mineral trend that's more than 12 kilometers long. We're finding brand new vein fields and new discoveries. So the odds are high that we’ll find even more deposits. And so this year's program is going to be a combination of steady, systematic step-outs to the main deposit, and going out and testing some of these new district target areas.
PROACTIVE: What kind of work can investors expect this year?
DG: I think for an investor it offers a really nice combination of both a very high grade, very high quality deposit that we're steadily expanding to try and establish critical mass. At the same time, we've got some raw prospects that are brand new, never been drilled, but very exciting showings, like a vein field that's a kilometer long and 500 meters wide with high-grade silver and gold that's never been drilled. So we will be steadily growing the deposit and dedicating a lot of effort to drilling these other targets and making new discoveries. I think the market always likes that new discovery aspect.
PROACTIVE: What's the significance of the copper zone too?
DG: The Footwall copper zone we discovered at the main JT deposit last year definitely adds another dimension. One of the aspects of this new copper zone that we started delineating last summer, and that's open as well, is that it's told us a lot about how the deposit formed and it gives us a vector on how to keep exploring it. So from an exploration standpoint, it's important information. But from overall commodity budget standpoint, it's also very important. This is (JT), first and foremost, a gold project in that 50% of the value comes from the gold but we've always marketed it as a polymetallic deposit because that's what it is. It's made up of multiple metals: gold, copper, zinc, silver, lead. That makes for a naturally hedged deposit. There's a lot to like about that in terms of being able to ride different commodity prices up and down when you've got a deposit that carries all those metals.
But what's critical to that is knowing that the metallurgy is good and you can get good recoveries of all of those metals and we have that information so we know it's got good, clean metallurgy.
The discovery of this copper zone highlights that we're in a very dynamic mineral system. There's a little bit of everything going on. For the pure gold bugs, maybe all they want to see is gold, but I think if you're driven by the creation of value, there's a lot to like, because there's a lot of different elements and aspects to this property, where you're going to find a lot of different things.
PROACTIVE: In terms of the coronavirus (COVID-19) pandemic, has it slowed things down?
DG: Last year, it delayed us to get started and it certainly led to more challenging conditions for our employees because it was difficult to travel. So they were they were in the field long stretches and there was a lot of personal sacrifice there, for which I am very grateful. But going forwards, Alaska's got 50% vaccination rate right now. It's a great place to work. We don't see any issues. It's not going to be a major issue for us. We're coming out the other side.
PROACTIVE: And from your projects in Ontario, what's the newsflow likely to be?
DG: I think for our shareholders to date, Timmins has been a nice secondary story but it's been very heavily overshadowed by Alaska. But if you actually took the assets we have in Ontario and you pulled them out and made a standalone company, most people would go 'Hey!' that's a really nice portfolio of assets and you can support a company on those alone. When you stop and think about it, Timmins is Canada's number one gold-producing jurisdiction. And we are one of the larger junior gold explorer landholders within that camp. It’s ground that was assembled over quite a long time and we believe it’s highly prospective ground
More recently, where the spotlight is for us in Ontario, is on the east half of the Timmins camp. So our neighbors include Moneta Porcupine who have an eight and a half million ounce gold endowment. McEwen Mining's Black Fox mine which is sort of a two to 3 million ounce inventory and a newer issuer called Mayfair Gold that have the Fenn- Gib deposit, which is 2 million ounces and growing.
We’re sandwiched in the middle of all that. And at the core of our property is what's called the Croesus mine. It was a past producer between 1914 and 1930. It produced absolutely outstandingly high grade gold - some samples up to 27% gold. Beautiful stuff. It was small scale and they and they mined it out but that's at the core of our property.
The big development for us over the past year is we've gone and consolidated a lot of the ground surrounding that core land position. We've done ten separate deals now and most of these claims, many of them anyway, date back to 1911, 1920s, 1930s and have had no work done on them since. So the story there is we've consolidated that land package and it's very, very prospective ground surrounded by multi-million-ounce deposits that's essentially hasn't been explored in nearly a century. We've done airborne, we've done a big structural study, we're doing a targeting process right now to ready that project for drilling in the fall. That's our current plan.
PROACTIVE: There is a lot of interest in Canada gold exploration at the moment. Is it fair to says there has been a resurgence of interest?
DG: For sure...particularly in what we call the Greenstone belts. So in Ontario, Quebec, there's a lot of exploration going on in the Greenstone belts. And so Timmins, the Abitibi greenstone belt - Timmins and Val d'Or - those are the real centers of that kind of work. What's happened more recently is companies keep going further and further north, checking out these underexplored Greenstone belts but obviously they don't have a lot for infrastructure so the threshold to make something that will become a mine is a lot higher there to overcome the cost of developing.
What we have is projects that almost have that same sort of grassroots early stage feel opportunity but we just happen to be right in the heart of where all the gold's actually been mined. It's a pretty rare opportunity and it's a side of the story that we're going to continue to promote and build because I think it's a very good opportunity to create some value for shareholders in Ontario.
PROACTIVE: What's it like exploring in Alaska and what are the advantages of working there?
DG: In a place like Alaska, it's as though no one's been there before in some areas and it's a really, really neat opportunity. Traditionally, you'd have to go to the real frontier regions to find those types of deposits, In this case, we have it right there, we're on the coast only a few kilometers from deep tide water for great transportation of concentrates and we're on First Nations land.
The world is becoming ever more ESG focused - the metrics that you've got to look at before investing and we really like that aspect. One, the copper is really nice, because it's probably the foundation of the green economy is copper. But on the social side of the ESG - particularly on the indigenous side - you can't do any better than how Alaska has set things up, in particular our project.
They settled the land claims in the 1970s. Twelve land-based native corporate entities were created. They were called Alaska Native regional corporations. Those corporate entities were able to select lands for their natural resources. So they're the actual land owners. They own the title to the mineral resources and the trees and other resources in these areas. And they're choosing to develop their natural resources. So we were approached by the native Corp, which in this case is called CIRI, and it's a fantastic arrangement for them and for our investors.
Any revenues and royalties that will ultimately come from mining will flow to the indigenous people that live in the immediate area as well as the surrounding regions. . There’s an awful lot to like about that, from a political support, and social support there's a lot to like as well. I think it is a trend in our industry. And I think, as a criteria when you're investing, it's just going to become more important.
PROACTIVE: Anything else, Darwin, you want to flag up to investors?
DG: Just to remind people of what our starting point is at Johnson track. We have a resource that is just under 900,000 ounces of gold equivalent at about 10 g/t gold-equivalent. So it's one of the higher grade, undeveloped gold resources out there in North America. There are a few higher but it's right up there near the top.
But more importantly, really what establishes and sets this deposit apart, is the fact that we have that kind of grade over true widths that are anywhere from 20 to 30 to 50 meters wide. And most 10 gram systems are two or three, or maybe four meters wide. And I'm sure you can appreciate a vein that's two or three meters wide is a lot more expensive to mine than an orebody that's 20 to 30 meters wide. And so that is what sets this deposit apart - both grade and width - which is a rare combination that should translate to attractive economics.
And so we've got a really good start. Last year, we didn't update the resource, but we certainly expanded the footprint of mineralization. And the next time we do a resource update, it will be larger. It is our intent this year to significantly move the needle further to establish that critical size threshold. We believe it will become obvious to everyone that this will be the next mine.