Ahead of The Herd With Planet Mining Exploration

Richard (Rick) Mills
Ahead of the Herd

As a general rule, the most successful man in life is the man who has the best information

 

Today I’m speaking with Christopher Taylor, M.Sc, P.Geo, President and Director of Planet Mining Exploration TSX.V – PXI

 

Rick: Tell us a little about yourself Chris.

 

Chris: I was a project geologist with Imperial Metals. I worked on their Red Chris and Mount Polley mines in British Columbia and ran an epithermal gold exploration project for them in Nevada for several years, the Sterling Gold Mine which is currently going into production.

 

Although I was familiar with the development and production part of the mining cycle I really wanted to get involved with junior explorers, the grassroots kind of work they do, that initial part of the development process where they secure a property, make a discovery and advance it to a resource.

 

With a partner I set up the Preakness Group, where we run mineral exploration projects and manage junior mining companies. Our annual exploration budget, across all the Preakness Group of companies, is $10-$15 million. 

 

Rick: How did Planet Exploration become involved with the Preakness Group?

 

Chris: The previous management of Planet got in contact with us and brought the company over. Planet had developed a resource of 360,000 ounces of gold at their Sidace Lake Project, in the Red Lake district of Ontario. It’s still open for expansion and Goldcorp acquired control with a 60% interest. 

 

Planet’s mandate is to bring advanced level exploration projects up to a resource level within a short time frame. So they were coming to us looking for a project that was ready to go to a resource in a short period of time.

 

We took over control of Planet in late 2010, it had $4.5 million in the treasury and we added a million by getting a few select major shareholders involved, then we found the Golden Loon Project and dropped it in. 

 

Rick: Tell us about the Golden Loon.

 

Chris: When I first saw the Golden Loon Project I was immediately attracted to it, it’s only an hour north of Kamloops, it’s right on the main highway that goes between Vancouver, Kamloops, Jasper and Edmonton, it’s got a rail line that runs just off the edge of the claims, less than a kilometer away and it’s got a power line that actually runs over one of the big mineralized bodies on the project.

 

From an infrastructure and access point of view, and all the other points you would look for, to aid in the development of a project, they’re all in place already. 

 

Which means that whatever you’re able to find on the Golden Loon has a much higher chance of going further into the development stage. With our mandate in Planet to find resource-ready properties and then to build the resource, it’s a perfect match for us.

 

Rick: The Golden Loon is an interesting story from another perspective, the property hosts two different types of mineralization.

 

Click for a larger clearer pictureChris: Yes, there is a very large bulk tonnage nickel-cobalt-silver-platinum mineralized ultramafic body and right along side of that the Geological Survey of Canada (GSC) mapped out multiple large gold mineralized structures that converge on the property. 

 

These gold mineralized structures run for tens of kilometers in all directions, but they come together almost like a crow’s foot pattern on the Golden Loon Project.

 

So we are in the enviable position of having two different types of mineralization, each of which would be interesting in its own right, coming together on the same property. What we’ve been doing with Planet is developing both of those assets simultaneously so that we can hopefully ratchet up the value of the project in a short period of time.

 

Rick: It’s an extremely interesting scenario.

 

Chris: You’re looking at two big systems that are mineralized over the space of kilometers, there’s enormous strike and depth potential involved.

 

Rick: Lets break down the two systems individually for our readers.

 

Chris: The first stage of exploration we did was 12 sq km of gold in soil surveying. That exploration initially defined an 8 sq km gold and soil anomaly system.

 

Now when you find a big gold system like that in soils in BC, everybody knows that it could have been transported from somewhere else, so my initial concern was that we’re looking at gold that might have originated in one area and, over time, been smeared around by glaciers. 

 

We followed up with a drill program, that initial program showed us that over 700 m of strike, everywhere that we drilled, had gold in the bedrock underlying the gold in soils. That’s what really showed us the size potential and the merits of the project.

 

Rick: You drilled one target out of…

 

Chris: Using the data we generated last summer and historical data that we got from past operators and assessment reports, we now know that we have a gold in soil system that extends for over ten kilometers of strike on the project.

 

And when you look at these gold in soils targets, that are the possible surface expression of multiple gold in bedrock zones, there’s more than 30 of these targets that we need to test this year. 

 

Rick: Let’s talk about the low-grade bulk tonnage ultramafic nickel-cobalt-silver-PGE system.

 

Chris: We’ve actually got an area of over 10 sq km of surface exposure of this body, where it sits up as a hill over the rest of the flat plateau that the property’s on. It’s a 150 m high hill with a gentle slope that’s about 7 km long, two km wide, the entire hill seems to be mineralized with nickel-cobalt-silver and PGE’s. 

 

We’ve recently assayed 1400 m of drilling in eight different drill holes, very consistent grades, the key word being consistency, a consistency in the nickel mineralization, consistency in the cobalt mineralization. We assayed about 600m of the core for silver and the big upside surprise for us on this is the very consistent silver mineralization, it’s quite unusual with this type of system but half of the meters we assayed returned more than 5 g per tonne silver, with a high of about 91 g per tonne silver.

 

Rick: From what you’ve said the targets size potential must be immense?

 

Chris: We’re just getting started, but if you connect the dots between the drill holes, just in the area we’ve drilled, you’d be looking at our primary exploration target.

 

Rick: That’s more than a billion tonnes of nickel-cobalt-silver-platinum mineralization. Is Royal Nickel’s Dumont deposit an apple to apple comparision?

 

Chris: Yes it is. They’re looking at a dunite ore body and the Dumont deposit has similar grades on the nickel and cobalt.

 

They’ve proven up 1.4 billion tonnes, that’s going to yield a billion and a half pounds of nickel, quite a bit of cobalt and some PGEs. Based on their prefeasibility study they can produce a 30% nickel concentrate, that should be a nice saleable concentrate.

 

Rick: Any major differences?

 

Chris: They’ve got similar infrastructure to ours but they’ve got a long thinner deposit that doesn’t have very much surface exposure. I believe the strip ratios and other characteristics of our deposit could be better than Dumont’s.

 

Rick: Why is that, is it because of the difference in the two deposits geometries?

 

Chris: On the Golden Loon you’re looking at something that’s sitting up as a two km wide by seven km long hill, 150m above your nearest diluting rocks. If you think about it you’re looking at something that could have a perfect geometry for mining.

 

In a development scenario, your strips could be very low for a huge portion of the mine life. If it’s already sticking up 150m above the base elevation and you want a 300m deep pit you’re only looking at going 150m below the base level of the plateau. You take the hill away and you have a very manageable pit after that. 

 

Rick: This is proven metallurgy, it’s been done before, you’re not looking at anything new or having to reinvent the wheel.

 

Chris: We’re following in the footsteps of people that have already successfully shown viable metallurgy on these deposits. 

 

What most people are looking for on these deposits is the dunites being your primary host for mineralization. In our deposit, both the dunites and lherzolites, the two main ultramafic rock types, are mineralized in the same way with nickel, cobalt and silver. There was also platinum intercepts in both those rocks.

 

The nickel metallurgy looks good, we did ammonium citrate partial leach tests on all the rock. We’re getting good recoveries on what we’ve put through, we’ve got comparable deposits with good metallurgy and a good concentrate product being developed at Dumont already.

 

Rick: How fast are you going to move on the ultramafics and gold?

 

Chris: A big advantage for us is that our ultramafics deposit has massive surface exposure, more than 10 sq km of exposure right at surface of consistent mineralization, that’ll really help drive the economics on this deposit. 

 

SRK has already designed a resource drill program, we’re already doing the metallurgy. Within this calendar year, we want to get a resource out to the market.

 

Rick: And the gold side?

 

Chris: In parallel with what we’re doing on the ultramafic, we’re looking at showing the size potential of the gold system. I really want to be able to test more of our gold targets. The first drilling that we’ve done was very encouraging. We’ve got 30 targets to test and we’ve only tested one. We’re working with the drill crews to drill off a lot of these things in a short period of time. So, as soon as we’ve got the drill rig on site, we’re just going to hit it as quickly as possible, that’s going to start shortly.

 

Rick: The ultramafic, being right on the surface and with consistent grade to depth shouldn’t take much of a drill program to define a resource.

 

Chris: This is where we believe the value comes for shareholders, according to the preliminary discussions I’ve had with SRK, we can drill the skeleton resource with as little as sixteen or so additional drill holes. 

 

Say sixteen vertical holes down to 300 m, that’s going to give you a very good outline of your resource.  And then, if the consistency is like what we see now, you’d do some in fill work on that, likely another 15 or 16 holes, about two months’ worth of drilling to get to the resource level.

 

Rick: What were Royal Nickels economics like, and are there large scale mining operations here in BC we can look at?

 

Chris: In regards to Royal Nickel’s Dumont project when you have viable metallurgy you’re usually looking at very cheap mining costs. Royal Nickel has shown that each tonne of rock is worth about $20 and they’re looking at about $8 a tonne in terms of mining cost. 

 

You end up looking at good margins per tonne of rock, and you’re moving a lot of rock. You’re looking at something in scale of operation that potentially looks a lot like a Highland Valley. They are very profitable operations once you get them rolling because you’re making good money on each tonne of rock, and it’s not costing you very much money to move it compared to other deposits. 

 

Rick: We’re talking critical metals. Nickel isn’t listed as a strategic or a critical metal, but when you consider that it’s extremely important in the production of cobalt and the platinum group elements, the PGEs, it’s pretty much a critical metal, and then you look at cobalt, that is a strategic or critical metal, and as well as the PGEs, and even more important is the source of a lot of these metals. 

 

A lot of nickel comes from Canada, of course, but a lot of nickel also comes from Zambia, the Democratic Republic of Congo (DRC), you look at cobalt, most of the supply comes from Russia, it comes from China via the DRC. You look at the platinum group elements, and they come mostly from the Bushveld for platinum in South Africa. Palladium comes from Russia and some of these countries, we’re not talking about countries that are always real friendly to the US.

 

Chris: As soon as we put out the initial news about the fact we had one of these large nickel mineralized systems on the project, we immediately had a number of phone calls from Asian investment groups that are looking for sources of nickel and cobalt in infrastructure rich areas in Canada, a friendly jurisdiction that’s going to have a stable supply over a long time period.  So, it’s very attractive to a number of investors from that point of view.

 

Rick: There was a time when people thought that BC’s porphyry copper/gold deposits were uneconomic because they were only 0.3% to 0.5% copper, maybe a quarter gram or a bit better gold. And of course they said the same thing regarding Carlin Trend and its one gram per tonne gold.

 

Chris: Yes, and here we are now looking at a type of deposit which has excellent potential economics, a very big bulk tonnage system with reliable grades of mineralization, in good areas that are going to be cheap to operate in and are going to produce a valuable product.  So, anybody that has the ability to invest based on fundamentals is going to be very interested in this project.

 

If you’re making money, and you’re making good money off of what you’re mining out of the ground, you should be open to different investment opportunities.

 

Rick: Investment decisions should be based not on profit but on sustainable margins.

 

We’re not mining a copper-gold porphyry, but the historical long-term average, the all in cost in BC of mining these copper/gold porphyries is less than $10 a tonne.

 

Chris: People have studied the comparables to what we’re working on. Because they’re big, because they’re on surface, or near surface, in our case it’s on and above surface, you’re looking at mining costs that tend to be anywhere between $7 and $10 range.

 

Rick: Your working on the project now.

 

Chris: Yes. We’ve got about six weeks of drilling in so far and results are starting to come in. We’ve been drilling the gold system because we did a lot of re-assaying on the nickel. We took one meter intervals out of the core for 1,400 m of core, that took months to get the assay data back from the lab. 

 

We’re working with that data, that’s going to be concluded within the next couple months, and then we’ll be resource drilling.

 

Rick: How’s the money holding out?

 

Chris: Money’s good.  We have $3.8m in the treasury and because of the low cost, it’d be somewhere around a million dollars, to drill off the nickel resource. That leaves us a lot of cash in the bank to do the necessary work on the gold system. 

 

Rick: Anything else you’d like to add Chris?

 

Chris: The area around and the Golden Loon project has been exploited for resource extraction the last 50 or 60 years, there’s been a lot of commercial logging activity in the area. The local people, Little Fort is the nearest community, are very supportive of the project. They’re looking for benefits and we are going involve them in every way that we can.

 

It’s one of those projects where I could pop into my car and drive to the drill site in five hours from Vancouver. When you’re there you stay at the motel in Little Fort. It’s cheap for us to operate, which is great, and comfortable for all the people working on the project.

 

The city of Kamloops is just an hour south of the project, the city has a large, well trained experienced mining workforce. They understand mining. They like it. They realize how important resource extraction is to their economy, and they’re a major supply center for mining in central BC.

 

Rick: Thank you Chris, it’s been a pleasure.

 

Richard (Rick) Mills

rick@aheadoftheherd.com

www.aheadoftheherd.com

 

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Richard is host of Aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 400 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell, Uranium Miner, Casey Research, 24hgold, Vancouver Sun, CBSnews, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, Mining.com, Forbes, FNArena, Uraniumseek, and Financial Sense.

 

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Legal Notice / Disclaimer

 

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

 

Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

 

Richard Mills does not own shares of Planet Mining Exploration TSX.V – PXI

 

Planet Mining Exploration TSX.V – PXI is a sponsor of Richards website www.aheadoftheherd.com

 

 



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