Getchell Gold (CSE:GTCH, OTCQB:GGLDF) has been steadily expanding the resource through drilling at its flagship Fondaway Canyon gold project in Nevada, which is consistently rated one of the best jurisdictions in the world for mineral exploration.
Simply put, the upside potential of Fondaway Canyon is evident from the fact that Getchell just continues to find more gold.
The Nevada factor
As a reminder of how good an environment Getchell Gold is operating in, the Fraser Institute recently named Nevada the world’s number one jurisdiction for mining attractiveness — knocking Western Australia off its perch and reclaiming the top spot. The annual survey is closely watched by mining investors.
Nevada is host to the largest gold mining complex on Earth: the Nevada Gold Mines joint venture between Newmont and Barrick. Formed in 2019, NGM consists of as many as 10 underground and 12 open-pit mines, plus autoclave, roasting and heap leach facilities.
Total production last year from NGM reached more than 3 million ounces, about 3% of the world’s total.
Nevada owes its unique geology and prolific gold production to the complex tectonic history of the North American Great Basin, which gave rise to its widespread landscape of fault-dominated mountain ranges and valleys.
Most of Nevada’s gold deposits are now found within three northwest-trending belts. The most famous is the Carlin Trend, where sedimentary, disseminated gold appears near surface, often surrounded by smaller deposits of similar geology.
Estimated to contain up to 180 million ounces, the Carlin Trend is the second-largest gold endowment behind South Africa’s Witwatersrand Basin. The three major players operating mines in the Carlin Trend are Newmont Mining, Barrick Gold and Kinross Gold.
Barrick’s Goldstrike mine is one of the world’s most prolific. Between the Betze-Post open-pit mine and the Meikle and Rodeo underground mines, the Goldstrike mines have produced over 1.1 million ounces and have 8.1 million ounces of reserves.
Newmont’s Carlin operations have produced 944,000 ounces out of 15 million ounces in reserves. Kinross’s Bald Mountain mine, purchased from Barrick in 2016, outputted 130,144 gold-equivalent ounces, with 2.1Moz in reserves.
The other two trends, Battle Mountain-Eureka-Cortez (or just Cortez) and Walker Lane, also host some of the world’s most important gold mines, including SSR Mining’s Marigold mine in Humboldt County and McEwen Mining’s Gold Bar operation.
Together, the three major trends accounted for nearly 170 million ounces of the gold produced in Nevada between 1835 and 2018.
While Carlin-style mineralization is a common feature of these trends, Nevada also has epithermal, low-sulfidation gold deposits, which are generally smaller and are not unique to Nevada. Still, these deposits are often high grade, making them excellent targets for gold exploration companies.
Among the reasons for retaining its competitive edge are Nevada’s lack of income tax, the fact that mining is governed under the federal Mining Act of 1872, which would take an act of Congress to change, and that mining taxes are set out in the state’s Constitution.
Not only does Nevada produce a lot of gold from existing mines, it is also an excellent place to put a new mine into production. That’s because conducting exploration, constructing and building a mine in Nevada is relatively easy. The state isn’t the country’s number one gold producer by far without good reasons.
Getchell Gold is among the junior exploration companies hoping to take advantage of Nevada’s mining-friendly environment.
Over the past three years, Getchell has increased the mineralization substantially, decreased risk, and demonstrated that there is a lot of upside left to grow the resource at its Fondaway Canyon project.
After acquiring Fondaway Canyon in 2020, Getchell identified two priority areas. As they started to drill, Getchell kept hitting gold, and continued to hit mineralization in step-out holes. In its first year of exploration, Getchell outlined three new gold zones: Colorado SW, North Fork and Juniper.
The company has been focusing on the Central Area of a 3.5 km east-west gold trend.
This is Fondaway Canyon’s nexus of gold mineralization, with the structures providing not only pathways but traps for gold. Getchell has delineated quite a bit of gold in the ground, but, imo they are only just getting started.
The early wide-spaced drilling demonstrated the presence of high-grade shear veins enveloped in thick bands of mineralization and extended the mineralization model a remarkable 800 meters down dip from surface.
Five drill holes hit substantive zones of mineralization, between 50 and 100 meters thick. The company kept drilling in 2021 and 2022, upping the scale and capitalizing on its discoveries.
At the end of 2021, Getchell made a new discovery: a very high-grade zone that was running 10 grams per tonne over 25 meters near surface.
Substantive mineralization in four holes was highlighted by hole FCG21-08, the most northwestern hole, intersecting the Colorado SW zone extending for over 200 meters down hole, and hole FCG21-10, intersecting the North Fork zone extending 82 meters down hole.
The latter interval, hosting the highest-grade gold intercept in the 40+ year drilling history at Fondaway Canyon, and reporting 47 g/t Au over 1.5m, is a prime example of the structures that promote the high-grade concentration of gold at the project.
Partway through the 2022 drill program, an open-pit model mineral resource estimate was commissioned and published (see below).
Eighteen drill holes doubled the previous resource from 2017, with 550,800 ounces of gold in the indicated category and an additional 1.5 million ounces inferred, all at comparatively excellent gold grades for active Nevada operations (1.56 g/t Au indicated, 1.23 g/t inferred).
Note, however, that this resource estimate is already out of date. There are nine holes that were excluded in the resource estimate because they missed the cut-off date, and Getchell plans to do a lot more drilling on its wide-open deposit in 2023.
Also worth noting is that Getchell hit mineralization in all 18 holes, which is almost unheard of in mineral exploration.
To date, the gold mineralization at Fondaway has been traced for a half a kilometer on surface and half a kilometer down dip. It remains open as the drilling has yet to encounter any limits, with the potential size and ultimate scale of the mineralization unknown.
Getchell Gold is working to expand its resource estimate through drilling. Preparations for a much larger drill program than previously are underway; a steady stream of results are expected throughout the second half and into next year.
Getchell plans to keep on expanding the mineralization, drawing it along strike and down dip, thus enlarging the conceptual open pit.
“We’ve been increasing the drill meterage into the ground from 2020 through 2022 and this year we’re targeting two drills turning all year long to continue to expand and increase the resources at Fondaway Canyon and also perform just enough infill drilling to take all that inferred and put it into the indicated category,” says Getchell’s President Mike Sieb.
The chief executive added the market can expect an updated resource estimate and the completion of Getchell’s next major milestone, a preliminary economic assessment (PEA), in the first half of 2024.
“We’re moving up the tiers of de-risking and adding confidence to the project as we go,” he said.
As part of the 2023 drill program, Getchell last month announced it is applying for an additional 12 drill pads.
“After three years of drilling and delineating a sizeable Mineral Resource 600 metres down dip from surface and 600 metres along strike, the gold mineralization remains fully open for further expansion. Exploration of these ample and very evident priority targets requires the Company to permit more drill pads than previously anticipated based on the past three years’ drilling success,” Sieb stated in the May 24 news release, adding: “The 2023 drill program and drill hole sequencing will be finalized after permit approval is received.”
The company reiterated the fact that 18 of 27 holes drilled into the Central Area were responsible for doubling the 2017 resource, and that the remaining nine holes, completed in the latter part of 2022, didn’t make it into the resource estimate (RE). These nine holes, says Getchell, “all intersected substantive mineralization, fully supporting the mineralizing model and attest to the upside potential and strength of the Fondaway Canyon gold project.”
The latter bodes well for an updated RE, expected in H1 of next year.
It is also important to emphasize that the current RE conceptualizes an open-pit mine model — much cheaper than mining underground — although the minor amount of contiguous mineralization currently extending beyond the open pit limits has been categorized for potential underground mining. Getchell’s plan is to expand the mineralization to grow the mineral resource and, in the process, support a larger open-pit model which can then convert the current underground mineral resources to open pit mineral resources.
Getchell expects the majority of inferred resources, currently sitting at 1.5 million ounces, could be upgraded to indicated with continued exploration.
Getchell Gold is financed to complete its next round of drilling and get to work on advanced studies. The company just closed the first tranche of a private placement that offered investors 4,287,500 units at $0.20 per unit, for total proceeds of $887,500.
Getchell Gold Corp.
Shares Outstanding 106m
Market cap Cdn$16.3m
Legal Notice / Disclaimer
Ahead of the Herd newsletter, aheadoftheherd.com, hereafter known as AOTH.
Please read the entire Disclaimer carefully before you use this website or read the newsletter. If you do not agree to all the AOTH/Richard Mills Disclaimer, do not access/read this website/newsletter/article, or any of its pages. By reading/using this AOTH/Richard Mills website/newsletter/article, and whether you actually read this Disclaimer, you are deemed to have accepted it.
Any AOTH/Richard Mills 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.
AOTH/Richard Mills has based this document on information obtained from sources he believes to be reliable, but which has not been independently verified.
AOTH/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 AOTH/Richard Mills only and are subject to change without notice.
AOTH/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, AOTH/Richard Mills assumes no liability for any direct or indirect loss or damage for lost profit, which you may incur as a result of the use and existence of the information provided within this AOTH/Richard Mills Report.
You agree that by reading AOTH/Richard Mills articles, you are acting at your OWN RISK. In no event should AOTH/Richard Mills liable for any direct or indirect trading losses caused by any information contained in AOTH/Richard Mills articles. Information in AOTH/Richard Mills articles is not an offer to sell or a solicitation of an offer to buy any security. AOTH/Richard Mills is not suggesting the transacting of any financial instruments.
Our publications are not a recommendation to buy or sell a security – no information posted on this site is to be considered investment advice or a recommendation to do anything involving finance or money aside from performing your own due diligence and consulting with your personal registered broker/financial advisor.
AOTH/Richard Mills recommends that before investing in any securities, you consult with a professional financial planner or advisor, and that you should conduct a complete and independent investigation before investing in any security after prudent consideration of all pertinent risks. Ahead of the Herd is not a registered broker, dealer, analyst, or advisor. We hold no investment licenses and may not sell, offer to sell, or offer to buy any security.
Richard owns shares of Getchell Gold Corp. (CSE:GTCH). GTCH is a paid advertiser on his site aheadoftheherd.com