Northstar Gold Corp (CSE:NSG) (OTCMKTS:NSGCF) (FRA:3WV) is excited about the potential of its flagship Miller Gold Property, and with good reason.
The property shares many important geological similarities and lays just 18 kilometers (km) southeast of Kirkland Lake Gold's (TSE:KL) Macassa SMC gold mine. Recent exploration drilling results from Northstar’s Miller included 6.6 grams per ton (g/t) of gold over a lengthy 117 metres (m) from drill hole MG21-56, starting from 14m.
Proactive caught up with CEO Brian Fowler to find out more about the project and the company.
PROACTIVE: Please can you give us a brief history of the company?
Brian Fowler: Prior to going public by way of an IPO in early 2020, Northstar operated on a private basis for seven years focused primarily on gold exploration in northeastern Ontario and then, more recently, in the Kirkland Lake District. During that time, the company spent about $7 million exploring three 100% owned exploration properties. In early 2019 Northstar augmented its board and management group, restructured its capital structure and positioned to go public by way of a $3 million IPO. I was approached in late 2018 to spearhead the initiative to take the company public. We engaged two prominent brokerage firms as sponsors and completed a $3 million, 30 cent IPO. That was closed on December 31, 2019, and we started trading on the Canadian Securities Exchange on January 1, 2020.
Could you sum up what's exciting about the Miller asset?
It's the site of the historic Miller Independence Mine and lays in an area that has been explored for gold since the late 1800s, early 1900s. The property shares a number of very important geological similarities with the nearby Kirkland camp, which is 18 km to the northwest. Exploration to date has been shallow in nature, with a number of shallow shafts and drifting along the Number 1 Vein on 2 levels. Unfortunately, the mine never achieved any kind of commercial production. I guess like a number of old mines this was hampered when the mill burned down and the property was essentially dormant until the late 1980s.
The property had a number of different owners over the years, and in 1987 a company drilled off a section of the No. 1 Vein at the Miller Independence Mine and calculated a resource containing 270,000 ounces of gold averaging 11.5 g/t gold. Not bad numbers at all. Northstar acquired part of that Miller Independence Mine and the Miller Gold Property by staking in 2012. This was a huge achievement - acquiring a resource-stage property by staking is pretty remarkable.
After acquiring Miller in 2012, the company drilled 27 holes in just under 5,900m in 2014 and 2015. In 2015 option partner Oban Mining (TSX:OBM) Corp. stepped out from the Miller Independence No.1 Vein and focused on drilling the Allied Syenite and the nearby planet Syenite. These are intrusive bodies that also localize gold mineralization on the property. The results were pretty good and provided the basis for the company’s 2019 IPO and public listing in 2020.
And what makes the geology exciting?
Like I said, the Miller property shares a number of very important geological similarities with the Kirkland camp, that being the style of gold mineralization, which is gold-telluride. Tellurium is a gold-rich sub-metal that occurs with native gold. It's rare and where it does occur with gold, it's in camps and deposits that are world-renowned. They're very large, like the Kirkland camp or the Cripple Creek in Colorado. So Miller and Kirkland gold have a very unique gold signature. The age of gold mineralization is the same as Kirkland Lake and the rock types are the same age and similar style. The Kirkland Camp is connected to the Miller camp by way of first-order fault structures. We've got what's called the Catherine fault that joins up with the Cadillac-Larder-Break and first-order structures off of that.
More than 30 million ounces of gold has come out of the Kirkland camp to date. All these geological similarities support the premise that we're tapping the same gold source at Miller as the Kirkland Camp - the only difference being at Kirkland, they've been mining a mile down and greater depths at Macassa, and we're just scratching the surface at Miller. So on the geological side of things, it's very compelling.
There's a lot of renewed interest in past-producing Canadian gold mining camps like Kirkland. Why is that do you think?
When you've got regions like Kirkland where there is historically high-grade gold, the margins are a lot higher so the exploration interest is a lot higher. The Kirkland Camp is undergoing some consolidation by majors with a focus to tie up additional prospective ground for future exploration and development. Kirkland Lake Gold recently signed an agreement with a couple of juniors that have pretty large land positions in the Camp - Orefinders Resources and Mistango River Resources (CSE:MIS) – whereby Kirkland can earn a 10% equity interest in each company and earn up to a 75% interest in any of their Kirkland area properties by expending up to $60 million in exploration. Orefinder’s large Mirado mine property is adjacent to our Miller Property which makes our ground position even more strategic.
Another thing that really works in our favor at Miller is that, owing to nearby producing mines and infrastructure, we don’t need to find a stand-alone gold deposit at Miller to realize significant value and production potential. Miller could still be developed with a resource base of, God forbid, less than 1 million ounces under the right circumstances. Of course, we’re hoping for much more gold at Miller.
In 2016 Northstar collected a 1,000-tonne bulk sample from the No.1 Vein and processed it at the nearby Camflo facility. Back calculated grade was 5.1 g/t gold but, more importantly, the metallurgy was very positive and totally in line with recoveries established in the Kirkland Camp. There are no real nasties and 90/90% plus gold recoveries are achievable. This makes potential mill feed from Miller even more attractive.
You've consolidated your ground with the Searles acquisition. How does this deal affect plans for upcoming exploration?
Yes, Searles has been a long time coming. It is a privately-owned, strategic adjacent land parcel that overlays the eastern half of the historic Miller Independence mineral resource. Its acquisition is a key piece to our Miller Property consolidation strategy. We started earnest acquisition discussions with the owners when I joined the company, and after a lengthy period of back and forth we established trust, a relationship with the vendors and signed a deal.
Out of the historic estimate of roughly 270,000 ounces - just over 40% occurs on the Searles property. The historic estimate is now consolidated under one owner. Northstar is a committed partner focused on jointly advancing Miller and the Searles Property to the advanced resource stage.
As such, we've got exploration obligations to earn 100% interest in the property so we've had to ramp up our exploration plans to accommodate that. We plan on drilling a number of holes, probably 12 to 15, on the Searles property this year. They will be short holes, step-outs, primarily to validate and expand the current resource area. We'll also be putting in a few step out and deeper holes south of this resource area and at depth because the Searles property is right on the southern continuity of what we call the Allied Deformation Zone. This Zone hosts most of the known gold and has excellent potential for more near-surface Syenites and high-grade gold mineralization in sheeted vein structures to the south. This is pretty exciting. We've had to modify our exploration plans and we just announced a $2.5 million financing to accommodate this and future drilling on the Miller Property.
You mention capital. Do you need more to go on with work plans?
We'd feel more comfortable. We still have a healthy treasury but we would like to “fill our larder” so to speak as we are planning a fairly aggressive program - up to 4,600m of drilling in 27 holes - that's going to require a fair bit of capital. We expect to drill up to 15 holes in the Number 1 Vein, 5 holes in the Allied Syenite following up the high-grade drill hole MG21-56 intercept that we hit, the Planet Syenite - a couple of holes, and then we've got a few other targets that warrant follow up as well. So, we don't want funding to be an issue. We want to be able to carry this program out as it makes sense. On top of that, at the beginning of this month, we're going to commence a small surface stripping program on the Allied Syenite. We're fully permitted to do that. Surface stripping is very effective because the overburden is not that thick on the property. And with the near-surface gold on the Allied, we're very confident that we're going to be able to expose some pretty splashy stuff. So we're looking forward to that.
Are there any plans for your other projects?
The company, prior to going public, spent about $4 million on the Bryce property, drilling over 20,000m. The 100%-owned property is 35 km to the southwest of Miller, situated on what’s called the Ridout Break. Bryce is situated over an intrusive hosted gold system that appears to be much broader than the Miller. We've got a large land position at Bryce – some 4,500 hectares. It's a gold porphyry-style system but it also has some precious metal-enriched VMS characteristics. We've got some historic drill intercepts there - 0.86 grams over 80m, including 2 grams over 25.5m. So, it's an excellent property in its own right.
This year, we've earmarked a couple of hundred thousand dollars on exploration that includes geological mapping and sampling to follow up some active logging in the area last year that exposed some mineralized shear structures so we were anxious to get some numbers on those. We've done a LIDAR survey and we've also undertaken a data verification and validation program of all the drillhole data. And the idea is to integrate all of this into a NI 43-101 report.
We're very bullish on Bryce, however, we've been totally focused on Miller up until recently. If Miller is going to carry the day for Northstar, as we fully expect, we might be inclined to seek option opportunities for Bryce. If, for whatever reason Miller does not deliver scheduled results we could certainly try to advance Bryce alongside of Miller. They're both prime properties. Right now, we're just keeping our options open with our main focus on Miller.
Contact the author at giles@proactiveinvestors.com