Rick Mills, Publisher/ Editor, Ahead of the Herd: Mike we’ve had a three-year journey, we’ve come up with 2 million ounces that’s open in all directions and it’s in Nevada, to me that’s something very special.
Mike Sieb, President, Getchell Gold Corp. (CSE:GTCH, OTC:GGLDF): You’ve hit the nail on the head Rick, that’s a lot to unpack.
Over those three years we’ve been phenomenally successful, from a realization of concept and initial discovery in 2020, with six drill holes hitting substantive zones of mineralization, in an area that hadn’t been drilled before, and continuing on through 2021 and ongoing through 2022.
The vast majority of the drilling has added to an already initial huge potential story, and it just culminated recently in the release of our mineral resource estimate, that completely validated and, not only validated, but exceeded all our expectations.
I mean you’re looking at in the indicated category 550,000 ounces of gold grading 1.56 [grams per tonne] and in addition to that an additional inferred 1.5 million ounces of gold at a grade of 1.23 g/t and as you stated that’s only a snapshot in time. We’ve continued to drill, there’s 9 drill holes that haven’t been included in the resource estimate and we’re going to drill a lot more in 2023.
The mineralization is open along strike, open downdip, starts at surface, and the resource estimate that we just published hasn’t even caught up to the drilling that we’ve done. So I say this is a developing story and it’s going to keep on getting bigger and better as we proceed here.
RM: I love Getchell having its own updated resource estimate out. But some people might kind of raise an eyebrow when they see that nine holes drilled in in 2022, FCG22-20 all the way through to FCG22-28, that’s over 3,400 meters of drilling completed after the cut-off for inclusion into the MRE [mineral resource estimate], and everyone of them was a great hole. Some people might say that the resource estimate that you just put out is outdated already.
MS: I mean that’s a wonderful statement and if you can say that, it just speaks to the potential of the Fondaway Canyon gold project.
RM: Absolutely, having that grade, starting from surface is exceptional in Nevada. I’ve been in this business 20 years, I’ve looked at a lot of deposits in Nevada, and most of them don’t have that grade and most of them don’t start that close to surface.
MS: If you want to analyze an exploration project there’s a few important factors to utilize for your evaluation, and Fondaway Canyon pretty much checks off all those boxes.
First off you talked about jurisdiction, jurisdiction is extremely important. What are the risk factors? What is the ease of pathway from discovery to development? Everybody knows that Nevada is one of the more pre-eminent jurisdictions in the world to follow that pathway.
Then you look at the asset itself. Fondaway has mineralization starting at surface, our drilling has realized extreme consistency in the mineralization and there are negligible misses from drilling. Every drill hole hit substantive zones of mineralization, up to and surpassing 100 meters thick zones of mineralization that are very consistent starting from surface.
And as for our drill program next year the geological model has connected the dots for about 800 meters downdip, roughly the same on strike, and completely remains open — not only external to the drilling but also in between the areas that we’ve drilled.
RM: In the news release it mentions the new resource estimate is focused on an open pit mine versus an underground mine, which the work by the previous operator seemed to indicate. Could you give us an idea of the importance of that, underground versus open pit?
MS: The previous operator modeled their historic resource estimate conceptually as an underground operation. What an underground operation entails is a higher cut-off grade, meaning less gold is captured, so you leave the mineralization behind below a certain grade. As well, if you continue on towards development it would be a higher mining cost.
So, because we converted the conceptualized mining scenario from underground to open pit, you get to, one, capture a lot more gold, and two, you decrease your potential mining costs. Under any circumstance viewing something for a potential open-pit mining scenario is much more attractive than looking at something as an underground scenario.
RM: So later then sooner you’re going underground.
MS: A portion of the published resource is classified as an underground mineral resource.
Under normal circumstances, at some point in time, you’ll hit your ultimate pit limit. At this point in time it’s not going to make either economic or operational sense to keep making your pit bigger and if there is mineralization left behind, the operation would then convert from an open pit to an underground operation to continue to capture the gold that’s still in the ground.
And that’s the scenario that we’re looking at for Fondaway Canyon, an initial fairly sizeable open pit that will then transition to an underground operation to continue on following the gold trends to greater depths. You want to optimize your extraction by open-pit mining methods, that is the best bang for the buck, it captures the most gold for the least mining cost, so you optimize the pit. When you come to the limits of that operation, then you will transition to and carry forward with an underground operation.
RM: Earlier you made a great point about the mineralization remaining open. I’ll repeat it; “the geological model has connected the dots for about 800 meters downdip, roughly the same on strike, and completely remains open — not only external to the drilling but also in between the areas that we’ve drilled.”
MS: Rick we don’t know how much gold is there. We’ve been drilling for three years and we have yet to hit the extents of the mineralization either along strike left-right or downdip, the mineralization still carries on.
Our last deepest drill hole, downdip, is still as strong as some of the drill holes that you see at surface. As yet there is no indication that the gold mineralization is coming to any sort of truncation at Fondaway Canyon.
RM: Tell me about 2023. What’s the thinking?
MS: Our mineral resource estimate is just the first milestone. We believe it really places us on the map and puts us in perspective with not only gold projects around the world but specifically in Nevada. We think it brings us up to the more elite category of mineralized bodies.
As we move forward in 2023 we’re going to jump from delivering the MRE to an extremely aggressive and more ambitious exploration program next year.
You’re going see more drilling than in any preceding drill program with the goal of delivering a preliminary economic assessment by the end of next year. Beyond that we’ll continue to derisk the project towards potential development.
RM: It’s interesting to note that the money spent has been minimal. You’ve conserved the share structure @ 122 million shares fully diluted and we have over 2,000,000 ounces open in all directions plus nine holes that aren’t in the resource estimate, congratulations on conserving the share structure.
MS: I think if anybody wants to really take a look at us, and they see what we’ve accomplished in three years, the increase to the inherent value of the project versus the dollars that were spent, they would be very impressed.
RM: Mike I’m going to tell you a short story. We were hiking through Jasper National Park. It was a beautiful day, sunny, lots of animals around, the scenery was incredible, the people we were with were outstanding, all a sudden it started raining. I looked up and there was this one tiny little black cloud, but there it was raining on us, this little 200-meter circle of rain. We pushed on and we actually walked out of the rain.
I’ve always thought of the Stillwater Wilderness Area survey as Getchell’s little black cloud.
In your news you had a piece about it, it appears our little black cloud has drifted away without raining on us?
MS: It’s a Wilderness Survey Area being evaluated for a wilderness designation. The designation can go two ways: it can go towards wilderness or it can go back towards the way the back country is there, Bureau of [federal] Lands for multi-use purpose.
The provisions for the release of the Stillwater WSA is in the current U.S. National Defence Authorization Act that has not only passed through the House [of Representatives] but has just passed through the Senate, and all it’s waiting for is the year-end signature of the president to enact the act, and within that the abolishment or the release of the WSA.
It’s taken some time for the wheels of the government to come around and take that designation off the map and that’s where we sit today.
RM: It could be that there was big institutional money looking to finance Getchell, if they saw the WSA on the map as an impediment, they would hold back. I feel that institutional money is free to flow into Getchell, do you agree with that?
MS: I totally agree, it’s critical to let’s say an outside group or individual taking a look at the Fondaway Canyon project, they may have perceived an impediment in regards to that, and critical to that external review, that impediment, i.e. that risk, has completely disappeared.
RM: We have proven management, and by that I mean we have a track record with management that has got the job done to this point, and you just can’t find fault with the way things have worked out.
We’ve got 2 million ounces open, they’re advancing the deposit in a very reasonable manner, they’re preserving the share structure, they’re managing the money quite well, it’s derisked about as much as a development project could be.
Maybe you could kind of sum up the investment story. What do you see Getchell offering an investor?
MS: What we did from the very first day was set up for ourselves a very well-defined pathway of advancement. We really capitalized on the resources that we put into the ground, and I’m talking about dollars and effort, so we’ve had a phenomenal return to investment on this project.
But right now Getchell Gold and Fondaway Canyon are at a major inflection point. Once the essence of our last news release reverberates through the marketplace, they’re going to realize how impactful our latest news really was.
You’re talking about a very substantial resource estimate in a premiere jurisdiction in the world as well as a complete derisking from any sort of overhanging presence of the Stillwater WSA.
So if somebody realizes the actual assets and impact of that news to opening up the doors for future value increase, as well as opening up the doors to major investments in Getchell, they’ll realize that we’re just at the first step of a major climb up the ladder.
It’s a game changer and I appreciate that you understand the import of the news that we put out, and what that means to the potential of the company and the Fondaway Canyon gold project.
RM: Mike, we’ll end it there. As always, it’s been a pleasure talking to you.
MS: Thank you Rick, I appreciate your interest.
Getchell Gold Corp.
Shares Outstanding 105m
Market cap Cdn$42m
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