Frequently Asked Questions
1. What kind of a company is Gowest Gold Ltd.?
Gowest Gold Ltd. is a Canadian gold exploration and development company focused on the delineation and development of its 100% owned Bradshaw Gold Deposit (formerly known as Frankfield East), as well as on the exploration of additional gold targets on the North Timmins Gold Project area, part of the prolific Timmins, Ontario Gold camp.
2. What is the difference between an exploration company, a developer and a producer, and are there degrees within each of these?
An exploration company has no mining operations and, through its ongoing need to search for a mineral resource or deposit, is regularly required to raise capital with which to drill etc., without assurance of a positive return. An advanced explorer has defined a mineral resource under the terms of National Instrument 43-101*. A developer is a resource company that is developing a mineral deposit,* which it plans to take into production. Generally, a junior gold producer has annual production of less than 200,000 ounces of gold; a mid-tier producer mines up to 1,000,000 ounces; and, a major producer more than 1,000,000 ounces.
* Gowest is currently in advanced exploration and is working toward development of its Bradshaw Gold Deposit.
3. Where do Gowest’s shares trade?
The Company’s shares trade on TSX-Venture Exchange under the ticker symbol “GWA”.
4. How many shares are outstanding? Fully diluted?
As of October 2016, the Company had 284.9 million shares outstanding and, with 4.0 million warrants and 12.9 million options, there are 301.8 million shares fully diluted.
5. What is the Company’s “Vision”?
Gowest is focused on building a gold mining company through its advanced exploration and development of the Bradshaw Gold Deposit (formerly known as Frankfield East) into the next new gold mine in the prolific Timmins, Ontario gold camp.
1. What is Gowest’s key asset?
The Company’s key asset is the North Timmins Gold Project (NTGP), where the primary focus is on its 100% owned Bradshaw Gold Deposit.
2. In addition to the geology, what are the other reasons for being focused on the Timmins area?
The Timmins area is one of the most prolific gold districts in Canada. Historically, more than 65 million ounces of gold have been produced here, almost half (48%) of all the gold mined in the country. In fact, given its historic experience, strong community support and excellent mining infrastructure, this is one of the world’s most attractive mining areas.
3. How large is Gowest’s land package?
Gowest’s NTGP now covers 109 square km in the Timmins gold camp, consisting of 1 patented mining claim, 67 unpatented mining claims and 8 mining leases in Evelyn, Gowan, Little, Prosser, Tully, and Wark Townships. This includes over 20 km along the Pipestone fault. This is a major geological structure, which is an offshoot of, and, from the same time period as, the Porcupine-Destor fault to the south, where over 65 million ounces of gold have been produced.
4. Is there one part of the NTGP that is more promising or advanced than the rest?
The largest portion of our focus over the past several years has been on the Bradshaw Gold Deposit, which was previously known as Frankfield East. We have drilled out a significant deposit here that we feel confident we will be able to continue to grow, even as we expand our plans to turn it into our first gold mine.
5. How big is the deposit?
Currently, Bradshaw contains a National Instrument 43-101 Indicated Resource estimated at 2.1 million tonnes (“t”) grading 6.19 grammes per tonne (g/t) gold (Au) containing 422 thousand ounces (oz) Au and an Inferred Resource of 3.6 million t grading 6.47 g/t Au containing 755 thousand oz Au. Further, based on the Pre-Feasibility Study produced by Stantec Mining and announced on June 9, 2015, Bradshaw contains Probable Mineral Reserves, using a 3 g/t Au cut-off and utilizing a gold price of US$1,200 / oz, totalling 1.8 million t grading 4.82 g/t Au for 277 thousand oz Au. The PFS was conducted by Stantec Mining (“Stantec”) through their Mississauga, Ontario office. The PFS was focused on mining the upper 500 vertical meters (“m”) of mineralization at Bradshaw. The scientific and technical information contained here has been reviewed and approved by the following Qualified Persons under NI 43-101 who consent to the inclusion of their names in this release: Mr. Kevin Montgomery, PGeo. (Mineral Resource), Ms. Peimeng Ling, M.Sc., PEng. (Mineral Processing), Mr. Michel St. Laurent, PEng. (Mineral Reserve and Mining Development).
6. What makes management think that this is not the full extent of the Bradshaw Gold Deposit?
As much drilling as we have done, we have yet to fully define the limits of this deposit. Inferred Resources at Bradshaw extend to a vertical depth of 1,000 m, with mineralization intercepted at 1,350 m , indicating the deposit remains open for additional development vertically. The resource also remains open laterally (east and west.)
Gowest’s highly experienced technical team note that drilling has continued to demonstrate that the deposit has the potential to be the next multi-million ounce gold deposit in the Timmins gold camp.
7. What are the next steps and how long do you expect them to take?
As at early November 2016, the Company:
- has received all of the permits required to begin Advanced Exploration (“AE”) work at Bradshaw;
- is advancing discussions to secure all required contracts and funding to allow for the mining and processing of the AE bulk sample; and,
- is progressing on detailed engineering work in advance of the start of the AE bulk sample collection.
The Ontario Ministry of the Environment and Climate Change (“MOECC”) has completed its Environmental Assessment of Gowest’s AE program and issued the final permit required for the Company’s AE work that includes the removal of a bulk sample. Permit approvals have also been received from the Ontario Ministry of Northern Development and Mines (“MNDM”) and the Ontario Ministry of Natural Resources (“MNR”).
The Company’s detailed engineering work is ongoing in advance of the site preparation, ramp construction and underground development work required to extract the bulk sample. This includes optimizing the methods and route to most efficiently mine the bulk sample.
The Company has ongoing positive discussions with lending groups to fund the removal and processing of the bulk sample from selected portions of the underground deposit. The Company is also in discussions with contractors to participate in the development of the mine, reducing start-up cash requirements by deferring a significant portion of mining costs until revenues are available from the sale of gold produced from the bulk sample.
Although it is impossible to accurately forecast how quickly any developmental mining company will achieve its operational goals, Gowest hopes to complete the AE bulk sample work in late 2017.
Technical & Geological
1. What type of gold mineralization is found at the Bradshaw Gold Deposit?
The Bradshaw Gold Deposit contains what is known as refractory gold as it is present as fine particles encapsulated (surrounded) by the sulphide minerals pyrite and arsenopyrite. Although this type of gold cannot be extracted directly with cyanide, the correlation between gold and the sulphide minerals allows for the Bradshaw mineralization to be ground to a fine powder before being processed using flotation to produce a very high grade gold concentrate (up to +90 grams per tonne gold) that comprises less than 10% of the original weight of mined rock. The remaining 90% of the rock can then be removed from the process, allowing for a significant reduction in the size and cost of the remaining gold recovery equipment.
2. What is refractory gold?
Gold deposits are generally grouped according to two broad categories – free milling and refractory. The majority of the historic gold production from the Timmins camp has come from free milling deposits where the use of gravity and basic cyanide leaching techniques can extract greater than 80% of the contained gold. As the quantity and quality of new free milling gold deposits around the world declines, refractory gold resources are becoming increasingly important. The term refractory simply means that gold recoveries are lower than what would be expected with free milling ores without the use of additional, and now common, processing stages to “free” the gold particles. Refractory gold particles are typically contained within a matrix of other minerals (primarily sulphides like pyrite and arsenopyrite) that prevent leach solutions from effectively contacting the gold. Although refractory gold is typically more difficult and costly to process, modern technologies and processes can make mining the right refractory deposit highly profitable. It is worth noting that Barrick Gold, which today is the largest gold producer in the world, got its real start when it built a processing facility in Nevada to treat refractory gold ore.
3. Does Gowest see a particular business opportunity in the fact that it has refractory gold in its deposit?
The Timmins Gold Camp contains a significant amount of refractory gold, which requires additional processing, making it slightly more expensive to produce. Gowest is currently working with an established third party processor on a plan that is believed to enable the Company to begin producing gold in 2015.
Further, approximately 8 to 10 million ounces of refractory gold are estimated to have been found between Timmins and the Quebec border. Whoever is willing to finance and build a major processing plant in the Timmins area to handle refractory gold could do extremely well. It is an undertaking that has the potential to create tremendous benefits and opportunity for the region and for the investors.
4. What are Gowest’s near term plans for dealing with the refractory gold in its deposit?
Gowest has identified pressure oxidation as the best and most economical solution to deal with the particular challenge of the Bradshaw Gold Deposit’s refractory gold for a number of reasons:
- The ability to process a small quantity of high grade gold concentrate so that the size of the pressure oxidation equipment can be minimized;
- The excellent gold recoveries (+98%) achieved using cyanide on the product from the pressure oxidation stage;
- The pressure oxidation process is understood, well proven, and provides a robust solution to the treatment of these types of ores; and
- The residues produced from pressure oxidation are extremely stable when discharged to the environment for final disposal.
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