North Timmins Gold Project
Gowest’s North Timmins Gold Project (NTGP) currently covers one patented mining claim, 11 mining leases and 56 unpatented mining claims over a total of 10,942 hectares (109 square kilometres) in Evelyn, Gowan, Little, Prosser, Tully, and Wark Townships in the Timmins gold camp. This includes 26 unpatented mining claims held under joint venture with Transition Metals Corp. (Transition). The project is located approximately 32 km north-northeast of the City of Timmins, Ontario. Access to the main area of interest, the Frankfield Property, is gained along Highway 655 and then 13.5 km along an all-weather gravel road east off the highway. Gowest owns a 100% interest in all of the claims that are not part of the Transition joint venture.
The project is located within the Abitibi Greenstone belt, historically known as Canada’s most prolific gold district. More than 172 million ounces of gold have been produced from this district, representing almost half of Canada’s total gold production. Much of the project area overlays or is adjacent to the Pipestone Fault or the North Pipestone Break, two highly prospective gold-bearing structures.
Gowest’s NTGP covers numerous unexplored or underexplored areas with gold potential. In recent years, the Company’s primary focus has been on the Frankfield Property, where gold mineralization was discovered in 1974 before Gowest obtained title to the property.
Timmins Gold Camp
It was in 1909 that two prospectors discovered the “Golden Staircase”, a rich vein of gold that led to the first major gold mine in the area, the Dome Mine. Within days, what became known as the Porcupine Gold Rush began and a huge mining camp formed at Porcupine Lake, a few kilometres east of modern Timmins. Lying 680 kilometres north of Toronto, the town of Timmins was founded by Noah Timmins in 1912 following several gold discoveries and the founding of the Hollinger, McIntyre, and Big Dome Mines, still known a century later as the “Big Three.”
The rail system, which began to operate around Timmins in 1911, accelerated the growth of the Timmins camp. However, just two days after the first train arrived, the entire camp was destroyed by fire. Due to the importance of the gold discoveries, very few people abandoned the camp and the area was rebuilt within two months. The discovery of base metals in the 1960’s increased the value of the industry and today the city continues to prosper because of numerous additional gold deposits and important zinc, copper, nickel, and silver finds in the area.
In 1973, the provincial government of Ontario amalgamated all of the municipal jurisdictions in the area to create the Corporation of the City of Timmins, which later adopted the nickname “The City with a Heart of Gold.”
In the 1990s, the City of Timmins became a regional service and distribution centre for Northeastern Ontario. In addition to its business based on natural resources, new areas of manufacturing, high technology and a labour-intensive service industry including forestry and manufacturing value-added wood products, metal fabrication, retail, service industries, and government have emerged. However, to this day, mining remains the dominant industry in the area.
The Gowest NTGP, situated in the Abitibi Greenstone Belt, is underlain by Archean rocks of the Abitibi Sub province of the Canadian Shield. The belt contains a variety of geological terranes, including the Porcupine, Upper Tisdale and Kidd-Munro assemblages that are present in the project area. The eastern project area is cut by the regional northwest-trending Buskegau River Fault.
The Porcupine (sedimentary) assemblage (2696-2675 Ma) underlies the south and southwestern portions of the project area and unconformably overlies the Kidd-Munro (volcanic) assemblage (2719-2711 Ma). The Kidd-Munro underlies the central part of the project area and is in fault contact to the northwest with the upper Tisdale (volcanic) assemblage (2710- 2703 Ma). To the east of the Buskegau River Fault, the Kidd-Munro assemblage rocks underlie the southeast part of the project. Upper Tisdale assemblage rocks overlie the Kidd-Munro assemblage to the north, and possibly interfolded Porcupine assemblage rocks near the contact between these two tectonostratigraphic units. The project stratigraphy is interpreted to be cross cut by later north-south faults and northeast-southwest faults.
As with much of the Timmins camp, the area controlled by Gowest has had a long exploration history. The area was especially active during the Texas Gulf/Kidd Creek discovery period and still contains wide unexplored or underexplored areas.
Gowest has been exploring the Frankfield Property since 1983. A number of diamond drilling campaigns have been carried out on the property and semi-continuous diamond drilling has been carried out since 2004. Following a reorganization and change of the Company’s management team, Gowest has more than doubled the size of the original mineralized envelope at the Bradshaw Gold Deposit (Bradshaw) (formerly named Frankfield East) since 2010 when it contained an Inferred mineral resource of 510,000 ounces (oz.) of gold (Au) (2.4 million tonnes at 6.5 grams per tonne gold “g/t Au”).
In mid-2011, Gowest contracted a HELITEM electromagnetic and magnetic airborne geophysical survey (“the airborne survey”) covering what was then – before Gowest added more land to the project area – the entire NTGP to map the geology and structure of the area.
On June 9, 2015, Gowest announced the results from the Pre-Feasibility Study (“PFS”) completed for its 100% owned Bradshaw Gold deposit (“Bradshaw”), part of the larger North Timmins Gold Project (“NTGP”). In preparing to reach this critical milestone, Gowest has raised sufficient capital over the last few years to enable the Company to significantly advance Bradshaw by expanding the historical resource (through drilling and analysis in excess of 65,000 meters of core), developing a detailed mine plan and completing the work required to obtain the various mining permits. 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. Previous drilling has intercepted mineralization at a vertical depth of 1,350 m, indicating the deposit remains open for additional development.
Highlights of PFS (100% Equity, All figures in USD):
|Exchange Rate||CAD $1.00 = US$0.80|
|Pre-tax Net Present Value (“NPV”) (5%)||$39.8 million|
|Pre-tax Internal Rate of Return (“IRR”)||32%|
|After-tax NPV (5%):||$29.2 million|
|Initial Capital||$21.5 million|
|Sustaining Capital||$21.4 million|
|Pre-tax Payback Period||3.5 years|
|Life of Mine (“LOM”) Operating Cost||$821/ounce (“oz”) gold (“Au”)|
|All-in Sustaining Cost1||$891/oz|
|Ore Mined||1, 787,295; tonnes (“t”)|
|Avg. Mineable Ore grade||4.82 grams per tonne (“g/t”) Au|
|Development Rock Mined (additional mineralized rock)||666,253 t|
|Avg. Development Rock grade||1.31 g/t Au|
|Initial LOM (includes bulk sample)2||8.5 years|
|Total Gold (extracted in initial phase)3||305,058 oz|
|Total Gold Recovery||93%|
|Avg. Annual Recovered Au Production||40,500 oz|
|Gross Revenue to Operation||$341 million|
- All-in Sustaining costs are inclusive of LOM Operating Costs and Mine Sustaining Capital Cost as described in the Capital and operating costs highlights section in this release.
- Initial LOM includes 1.5 years of pre-production and 7 years of full production.
- Total gold ounces is mineral reserve ounces plus development rock ounces
The Company notes:
- The PFS includes the ounces contained in the reserve derived from the updated measured and indicated resources of the gold mineralization at Bradshaw and does not include any of the inferred ounces of gold mineralization;
- Additional mineralization that does not qualify as a reserve for these calculations has been identified in the development rock which is recoverable at a profit by using rock sorting technology and is expected to generate additional gold production;
- The PFS is based on using third party mining, milling and refining;
- The Company plans to use advanced rock-sorting technology to increase gold production beyond the scope for this PFS.
Mineral Reserve Estimate
The defining of probable reserves is a significant step forward for the Bradshaw, which has previously reported only mineral resources, while useful, were estimated using less critical and non-economic technical parameters. The PFS mineral reserve is based on an economic analysis of the updated mineral resource using the costs developed during the PFS, and the metallurgical and ore sorting test work to estimate the recovery factors.
The updated resource estimate as part of the PFS for the Bradshaw is as follows: Indicated Resources 2,121,866 tonnes grading 6.19 g/t Au and Inferred Resources of 3,629,097 tonnes grading 6.47 g/t Au using a 3 g/t Au cut-off grade, effective January 12, 2015. Mineral resources were defined using all drill hole results up to December 2014, a minimum 2 m core length, a bulk density of 2.89 g/cm3 and a gold price of US$1,200. It is reported in accordance with the requirement of National Instrument 43-101 – Standards of Disclosure for Mineral Projects and CIM Standards on Mineral Resources and Reserves. This resource estimate and block model was used by Stantec for this report. While the Indicated Resource has changed from the 2012 report (Gow, November 15, 2012) due to implementation of more rigorous modelling parameters such as improved wireframes, reduced search distances and removal of non-compliant historical drill holes, it has also shown an increased average grade of 6.2 g/t and the emergence of two additional hanging wall zones, as well as an average drill hole spacing of 25 m.
Indicated Resources at the Bradshaw were identified above 500 m vertical depth for the Main Zone (“MZ”) 1 and MZ2 and above 400 m vertical depth for the Hanging Wall Zones (“HWZ”), where drill hole spacing is approximately 35 m or less. Inferred Resources occur directly below the Indicated Resources and the deposit remains open along strike and at depth.
The mineral reserves were estimated using engineering and operational design parameters described in the PFS conducted by Stantec. The deposit is planned to be mined using blast hole stoping with delayed backfill methods with 30 m sub-levels in the majority of the mining areas. Internal dilution has been included in the final mineral reserve estimate. Stantec is of the opinion that the mineral reserve estimate derived in this PFS reasonably quantifies the economical ore mineralization of the Bradshaw. The mineral reserve and PFS are effective as of June 5, 2015 and the mineral reserves derived for the Bradshaw are presented in the table below.
BRADSHAW MINERAL RESERVES (at a 3 g/t Au cut-off)
|Category||Tonnes||Average Grade||Ounces of Gold|
|Probable||1, 787,295||4.82 g/t Au||277,101|
The expected amount of gold (305,058 oz) to be mined from the Bradshaw during this phase of mining consists of the mineral reserves (277,101 oz) and mineralized development rock (27,957 oz). The mineralized development rock will be excavated as mining drifts are driven along the mineralized zones to access the mineral reserves. This development rock was estimated to be 666,253 tonnes grading 1.31 g/t Au. The utilization of advanced rock sorting technology will allow the economic recovery of the gold mineralization contained in the development rock that would normally be disposed as waste, for shipping to the mill for processing. Rock sorting technology is a highly effective process, which as demonstrated in bulk-scale testing of Bradshaw material (see Gowest release dated September 10, 2012), rejects over 50% of waste rock increasing the gold grade and reducing tonnage to be transported to the mill.