It is my pleasure to share another interview with the Unknown Geologist on the Goldboro project owned by Anaconda Mining (TSX:ANX). Neither of us represent the company, but are interested in Anaconda's continued success advancing “The Beast”. Find another one of our interviews here.
Unknown Geo: Hello, Peter. What's on your mind today?
Peter Bell: It's been a few months since we talked last and I’d like to check in on Anaconda’s results from Goldboro. It seems like they're executing.
Unknown Geo: One thing is fantastic about their recent press releases and Dustin’s appearances on the Korelin Economics Report. I listened to that new recording today and the images with the last few holes are great.
There have been some comments online about the fact that the recent intercepts have narrow widths, but those are very typical of the East Goldbrook system. If you look at the 9100 East section, it's a beautiful image – one of the best images I've ever seen of the deposit. These guys know how to do things and their model looks fantastic. I wouldn't disagree with anything that they have there.
They're drilling way out on the limbs and targeting the hinge of the anticline. In doing so, they're finding the East Goldbrook System is pretty juicy far down the limbs but narrow. There was one intercept with 250 plus grams over 0.4 meters that led some people to stick up their nose and say, "too narrow to mine." but I disagree. When I saw that result, I was impressed. That's twice as good as anything they ever mined at Forest Hill Nova Scotia. The best results that we mined in Forest Hill over two years was one vein that was 20 centimeters wide. The vein probably had a grade of 120 grams, but we mined it over a meter and a half and it made a lot of money. I think the head grade was probably near 20 grams per tonne with all the dilution. It was diluted almost five to one.
All I can compare it to is my previous experience at Forest Hill. We were making money on anything with grades of six or eight grams over a meter and a half width – it doesn't matter how wide the vein is. If the vein is a meter and a half wide and it's giving you six or eight grams, then that's economic.
You just put a half yard scoop in there and blast away. If you go into the old Boston Richardson shaft itself on the 80-foot level, then you’ll see that they were following one vein for a short distance and the heading was only about a meter and a half wide. That's typical Nova Scotia stuff. All this other nice, thick, high-grade stuff, in the most recent press release is not typical for Nova Scotia.
I've been underground at three other places in Nova Scotia and I've never seen anything like this. Everything else in Nova Scotia is narrow vein stuff like Goldenville, just chasing one vein or a couple of veins that were close together. The East Goldbrook System is typical of Nova Scotia in parts, but this other high-grade stuff is something else. To see things around 11 grams over 13 meters is impressive. You don't see that in other places in the province that I know of. It's for those reasons that this Goldboro deposit is, based on my experience, better than anything I've ever seen. That's why I'm still beating the drum on this thing.
How come nobody's really ever mined this thing yet? It'll probably be the biggest thing in the province once these guys are finished here.
Peter Bell: And something like eight grams over 1.5 meters. That is high-grade over mining widths! How much of that is high-grade smearing?
Unknown Geo: Well, there was approximately 250 plus grams over 0.4 meters in the recent news release. The core width is 40 centimeters and it came back at 240 grams per ton. If you mine that over 1.5 meters, then you're only diluting it by approximately two-thirds so you're going to be over 80 grams per tonne. The tonnage is not as great as if you're mining 10 meters wide, but it's an economic heading. And the narrow vein technology that they're working on is interesting, too. If they can master that, then you can apply that everywhere in Goldboro. It's just exciting.
Peter Bell: I heard a bit about that from them at PDAC and was really intrigued by it. Sensors in the drill bit to create a pilot hole and then progressively drill wider holes out to get the ore out with minimal dilution.
Unknown Geo: I haven't even seen anything about the technology yet. They're keeping it under wraps because that can be a game-changer for the company in a whole different way with the leasing of that technology. If they patent it, then it could be huge because you can use it in any application.
If you're mining a vein that's only kicking out a six-gram intersection, you can mine it at a narrow width and get six grams at very small tonnage without diluting it. That's a big cost saving from the lack of dilution and thus less material to process. If you're going to mine a 20-centimeter wide vein, then you've got to take it 1.2 meters as a minimum mining width. Between the ventilation tubes, water, compressed air, and the half-yard scoop – you need room to lay a track and get the ore out! There's always some dilution involved.
I remember the senior geologist at Forest Hill saying, "If we can get a heading that's six grams or better, then you're going to make money." And I'm saying six to eight today, it should be roughly the same, because the price of gold is kept in stride.
Peter Bell: In an interview from last summer, Allan Cramm said that everything's changed for mining at surface over the last thirty years, but underground is still very much the same. The potential to take some of that narrow vein stuff underground is wild.
Unknown Geo: That combined with the recent drilling is just unbelievable.
The only thing that I didn't agree with Dustin on in recent interviews is about this fault. I'm looking at the model from their news and they're talking about the faults being responsible for the high-grade.
I've logged a lot of core in my day, tens of miles in Nova Scotia, and anytime we ever saw fault zones we always sampled them. Generally, the only time that they give any values is when you've incorporated material that was there pre-faulting. Faulting in Ontario and Newfoundland is a big thing because the juices come into those fault zones and that's what you mine, but it’s slightly different here in Nova Scotia. The major faults related to what they call the Acadian orogeny when the Moroccan belt slammed into the North American belt and caused these deep fractures – that's probably when the gold bearing liquid came in. Then, these subsequent faults break that up later and incorporate some gold within the fault zones.
I see how they have the anticline offset in the image from the most recent press release and there are certainly faults in the area, but I really want to sit down and discuss with them next month how these thick zones may not by related to the faults. These thick ore shoots are there, but they're not big targets. They might go for a kilometer or more in length, hit surface, and plunge down to the east at 25 degrees but they're only about 20 meters high. They're smaller targets to hit with drilling and the geometry of these is key for Anaconda to understand…they will get there.
The Boston Richardson on the 250 level in the ramp is only a meter wide, but where they mined it out in the wide zone was eight meters thick in the ore shoot! It could be that they're just seeing an ore shoot causing a thickening of the belt where it's really good. I want to see the model at some point to check if they've got other holes in that same 3-dimensional orientation of where that ore shoot would be if it that’s the right interpretation.
The last time we were looking at some technical reports, Peter, and how you've got to poke the holes in the exact right spot to see the continuation of these juicy spots. They may be related to faults, but the faults probably don't go that far. If these spots are just a natural part of the belt where it thickens, then those sweet spots are going to go for kilometers. That's to be determined at this time.
As Dustin rightfully said, they're looking at both sides of the 9100 East section and trying to map things out. The trick is to see if you've got any holes on either side of it in that sweet spot that project up toward surface at 25 degrees. If not, you have a perfect drill target to test the theory. If successful, a new ball game for an already impressive deposit.
Peter Bell: Right, thanks. And they've done some work on the metallurgy too, which is great. They’re talking about 40-60% recovery from gravity with 80 percent below 110 microns. That’s in the ballpark of some stuff we talked about before, I believe.
Unknown Geo: Yes.
The way that Anaconda has done their models and everything has been very good. A couple friends of mine said, "Wow, they do a good job displaying what they're seeing." That’s important. In particular, I like that they're plotting the visible gold.
If you look at it, every single belt that they have on the image will basically have visible gold in it. All of those nuggets that you can see in core that you log will all come across the table when processing the ore. You'll probably get 75 percent of your minable material coming across the table, which is nice but it makes it difficult when you're trying to calculate the grade because you can drill two feet away and not hit anything. In the same belt, the grades will vary enormously based on the size of the nuggets you're getting.
It's just like the Bendigo deposit. I was looking at some of the stuff there and they showed a drill hole encountering an ore zone that they mined out. The grade of the ore zone was several ounces per ton, just crazy, but the drill results, which intersected this ore body said seven grams per ton. When they actually mined this area out, it returned ounces per ton but the drill indication was around seven grams as opposed to the 60 or 80 grams that that they got after the dilution. It's the nugget effect. Every time you take a bigger sample, you always get a bigger, better number.
What you're going to mill is going to be higher, in most cases, than what the drill grades are indicating because everything's cut. You have to cut the grades statistically, but what part of the population do you cut out? That's the tricky part.
It's a nice problem to have, but it makes it difficult to calculate the overall grade. Generally, when you start mining the thing, you get more than you had from fire assays or even the metallics. It’s a good problem to have.
Peter Bell: And Dolliver Mountain off to the west – still untouched?
Unknown Geo: When Osisko did the drilling out there, they did 100- or 200-meter spacings on the way out to Dolliver. They had an intersection of over 1,000 grams per tonne. If it was me when I was at Forest Hill and I had a 1,000 gram per ton intersection, then I'd be setting up a drill 25 meters on either side of it to try and see if it continues! Osisko was looking for a large wide orebody of a gram or better and thus was not chasing high-grade. Our win in some respects.
Anaconda's getting that concept. I spoke with Paul MacNeill recently and he said that they’re chasing these things.
In that one 9100 East section, they’ve got like 16 belts. To drill them all off is very difficult because there are so many targets. All belts have good grade in them somewhere, right? And really good grade in certain areas!
Again, it's a nice problem to have a lot of minable targets but drilling them all off to even to a measured category takes a month of Sundays drilling. I say “get going, generate some revenue, and continue expanding the deposit”.
Peter Bell: And for Anaconda shifting over from Pine Cove to Stog’er Tight and Argyle, that adds some complications for them. They don't want to spend too much money drilling at Goldboro in case things are delayed and they get into liquidity problems during that transition.
Unknown Geo: Yes. The previous mine pit still has a bit of ore to process while they open Stog’er Tight, but that new pit is twice the grade! I think it's over three grams versus one-point-four in the previous pit. That additional revenue will be a nice springboard for them.
If they can get a pile of ore and start going from four or five thousand ounces a quarter to seven or eight, then that would be a big game-changer for them providing they can keep their costs down to leverage the extra cash and build a company that'll produce 100,000 ounces.
Especially if they get Maritime. That would be a wonderful deal for everybody. Dustin's got his head on his shoulders there when he's talking about bringing that online instead of tracking it 50 kilometers further north to the other mill. Plus, Anaconda has already made all the mistakes six or eight years ago to figure out how to mine this stuff.
They know how to do it. I still can't understand how this company has 65 employees, they're paying all the bills, and they own a mill but they're so cheap! I guess it's just because it's small potatoes. Just watch for a couple years from now, when Goldboro comes online and if they get Maritime. I have a suspicion they're sniffing around elsewhere to get to their 100,000 ounces a year, too. It could be another Atlantic Gold as far as the stock price is concerned. That's how I'm looking at it.
Peter Bell: And Rattlingbrook? Any thoughts on that?
Unknown Geo: That's a new acquisition of large piece of land. As long as they can maintain the claims without having to spend too much money then it's a good thing to get it. I believe I also read that they are looking for a partner to advance these properties…once again an excellent management decision. Once they have Goldboro online in a couple years, they'll have all kinds of profit to throw at those claims. It has a bunch of great showings and is a good strategic move.
The price is right today and some of the others are struggling. Orex is a good example, it just didn't have the right management team behind it until Jonathan Fitzgerald came along with Dustin and they picked up Goldboro.
I wouldn't be talking to you today if I didn't think Goldboro had the potential that I think Anaconda is now seeing. It's going to be over 2 million ounces in Goldboro before it's all said and done. I think Dustin's definitely sees the potential at Goldboro. I heard him talking about expanding the resources and how it's open in every direction. Well, West Goldbrook to Dolliver Mountain is another two kilometers of the same signature and Dolliver Mountain was the biggest stampmill in the province! That's just two-and-a-half kilometers away from where they are drilling now along strike of the same anticline. I see an interesting future there. It won't be a nine-year mine life – it'll be my lifetime.
Peter Bell: There really is the potential for that. Especially if they keep the scale pretty small to begin with and take some really high-value ounces to feed into the Pine Cove mill.
Unknown Geo: The 123 Belt is basically exposed on surface like everything here – all this high-grade comes to surface because of the geometry with the 25 degrees plunging to the east and everything. I know that the 123 Belt is 10 meters thick on one limb in the decline ramp.
We've seen indications from drilling and bulk samples that it is somewhere around three to four grams, which is good for an open pit. If they start open pitting on that, they can generate some quick cash and a better understanding of the deposit. I don't know what sort of circuit they're going to set up in Goldboro, but they could just concentrate it and put all the nuggets together in a bag with the heavy separated material.
Peter Bell: They could get creative! Take what you get from the table and send it to Pine Cove, then stockpile the rest? It’s not just a standalone operation.
Unknown Geo: I don't know if the concentrator that they talked about at Goldboro will include a table or not, but you can get 75% right off the table (nuggets) at Goldboro and then throw the rest of the heavy concentrates into an additional grinding circuit to get it ready for the next stage of processing.
Peter Bell: Thank you very much, Dave, anything else?
Unknown Geo: No, I'm just more intrigued every time Anaconda puts out a press release. They really seem to be understanding this deposit and open to talk to me, which I think is a great thing. They're not trying to do it all by themselves, they're putting all the different people together to try to figure this out.
I will be chatting with them again shortly to review progress. What I'm seeing them talk about now shows that they might be onto the fact that these sweet spots are continuous and are just the fattening of the belt. I think they're understanding that well now. All good, Peter!
Peter Bell: As you’ve always said, it all comes to surface.
Unknown Geo: That’s right. All the material on the limbs will come to surface. For comparison, Forest Hill was only ever mined on one limb. We had both limbs here, obviously. This is a deposit that people will realize is probably the best thing in the province that we know about. Especially from a high-grade perspective. Everything that Atlantic Gold is seeing at Cochrane Hill, Beaver Dam, and Fifteen Mile Stream are all one point something grams. You can make money at one point something, but you can make a lot of money at 10! It may take time for people to understand that, but its’ coming.
Peter Bell: Wonderful, thank you very much.
This is not investment advice. I was not compensated to prepare and distribute this material.
