Peter Bell: Hi, I'm Peter Bell and I'm here with Mr. Dean Nawata, VP of Omineca Mining and Metals. Hello Dean!
Dean Nawata: Hi Peter. Thanks for the opportunity to give an update here.
Peter Bell: You're welcome! This is the first time we've done an interview and I'm looking forward to it. I've enjoyed talking and tweeting with you for years now. Thanks for all the insight and perspective. Omineca has been an important one for me because I sniffed it out when it was very quiet and invested as it's come back to life. It's the first time I've been really early on a story like this and I am looking for big things. So far it's been frustratingly slow. Where are we at with things?
Dean Nawata: We're continuing to move forward on both fronts - the placer bulk sample and the gold exploration. Agreed, as you say, some things have been frustratingly slow. The key takeaway though Peter, is that nothing fundamental has changed to the game plan for either the underground bulk sampling and its economics nor the gold exploration program, but we have been delayed on all fronts. The delays are largely due to COVID-19 impacts. Incidentally, I had a meeting with Osisko’s President and Mine Manager this past week and they are experiencing the same struggles with assays as well as challenges and setbacks in garnering certified underground/surface personnel, services and equipment.
Peter Bell: Dean, they could be causing some of this tightness with their work at Barkerville. They closed a $33.6M bought deal in mid-March after $68.6M PP back in January. Apparently, they are permitting a 4,750 tonnes per day underground operation at Cariboo Gold Project with a feasibility study in H2-2021. How many drills do they have going?
Dean Nawata: From what I understand they have 14 or 15 drill rigs running at Island Mountain on their project. Just before PDAC this year they reported 181g/t Au over 0.8m within an interval that ran 63g/t Au over 3.2m at the Shaft Zone, which is just west of the town of Wells. They are doing more work than this area has seen in decades and it's impressive. The tremendous amount of work they have going on has created challenges for both of us - and others in the region in terms of sourcing equipment, certified personnel and Covid-19 compliant housing for exploration and underground operations, but it's shining a pretty bright spotlight on the area.
Dean Nawata: As you know, we have been drilling at the Mouse Mountain project we optioned from CanAlaska Uranium. We are bullish on that project as a copper-gold porphyry system within the Quesnel Terrane belt which runs NNW to SSE parallel and adjacent to the Barkerville Terrane where Wingdam and Osisko’s Barkerville project are located. Back on March 5th, we announced that we had completed 5 diamond drill holes for 2,000m in a drill program that fulfills our commitment to earn a 50% interest in the project. Last week, we resumed drilling at Mouse Mountain after 4 weeks of break. We look forward to getting results back for this one because these copper-gold porphyry systems can yield big discoveries like the Gibraltar and Mount Polley mines in the same belt. We have always been interested in the mineralization of the nearby Mouse Mountain especially as it relates to the geological events that created Wingdam.
Peter Bell: I was surprised to see a porphyry project come into Omineca at first, but I'm not mad. Some people say it's not a "discovery" of a porphyry until you've got +100 holes into it, but I always look to Seabridge Gold as what success looks like with these gold-rich copper porphyries; they got more ounces of gold per share of any public company in the world by drilling off a big porphyry-Cu-Au that in the Golden Triangle. Bullish stuff! What about exploration at WINGDAM?
Dean Nawata: Assay results for Wingdam have been severely delayed at the lab since last year as with everyone else. We are now getting them in and the geologists are inputting the data into our first phase exploration models. We have resumed drilling and hope to complete the maiden program in the first half of this year and have begun planning the 2nd drill program to start immediately after we finish this one. Incidentally, we have changed assay labs. The earliest convenience to do this was after the New Years' break, and we hope they can do better because a more prompt response time is essential for a maiden program like this. So far, it looks like the turnaround is quite a bit faster - the Mouse results started coming in before Wingdam’s!
Peter Bell: Absolutely. I'm doing more stuff with prospectors in recent months and I continue to be amazed by how hard it can be to get things done right now. It's essential to have local people to work with. The plan for Wingdam is to use a contract miner from Saskatchewan and I can imagine that's been a source of delay.
Dean Nawata: Ya, both BGM and us have been eager to utilize as much local talent as we can. Unfortunately, there are not enough certified miners locally - and with Covid-19 restrictions, bringing miners from further away has become a real challenge. Unrelated to our current challenge, speaking with ODV, they are looking into helping establish a mining certification program at a college nearby - great initiative on their part. We have been reluctant to put out play-by-play updates as there is so much going on - but suffice it to say that we are experiencing delays but definitely making progress.
Dean Nawata: For the underground bulk sample, there are 3 basic stages to the sampling program. First, dewatering the old workings and decline. Second, rehabilitation and setup of the old workings and decline/inspect grout plug system. Third, prep the first mine face for freezing and crosscut. I was at site last week supervising the work and I hope to have an official news release to update on the activities at Wingdam soon.
Dean Nawata: We successfully set grout plugs from surface and began dewatering. The grout plugs were successful resulting in the dewatering going substantially better and faster than we expected. We are currently holding the water level static at about two-thirds of the way down. Not necessarily intended, but the extended, slow pumping will provide long-term benefits as the bulk sample operations get into full swing.
Dean Nawata: The short of it is, to date, the other activities have not kept up with the dewatering. I'm referring to the rehabilitation of the decline, rehab of the workings, inspection of the grout plug and setting up of equipment like ventilation, heat, power, and pumps. These things are meant to be done simultaneously or in coordination with each other, but there have been several COVID-19 related delays. Things like equipment deliveries, service provider delays, getting the underground equipment updated or re-certified with new electrical code, required safety equipment, and getting certified underground personnel have meant that we've dewatered more than we've rehabilitated so far. We are busy setting up everything to "catch up” to the pump now.
Dean Nawata: Above ground, we have been continuously busy setting up the Wingdam site for the bulk sampling. We are doing ongoing work on electrical setup, generators, pumps, fans, ventilation, and safety/mine rescue etc. The equipment and parts have been arriving to site, albeit slower than expected. For example, there have been essential equipment like modified scoop tram, bolts, screens, generators, switchgear, and cables that have been slow to arrive at site. So, generally speaking all the various parts, pieces, equipment and personnel need to be in place for subsequent work with other important service providers and contractors, who are themselves subject to limited availability.
Peter Bell: I like to say that exploration is a terrible business, the only thing worse is production! Keeping things moving is a daunting task at the best of times and spinning up these days is subject to all kinds of extra challenges. Godspeed, Dean.
Dean Nawata: Thanks, Peter. I know that you appreciate the challenges that come with the territory here. Remember that the prospector who named Lightning Creek used that word "lightning" to refer to places that he thought were particularly treacherous in the Cariboo. We haven't found the Wingdam to be treacherous per se, but we are focused on safety and high-quality work. Things are moving more slowly than I'd like but the good news is that the economics continue to look fantastic here even if the gold price remains range bound in this area - in other words we don’t need higher gold prices to have this thing remarkably profitable. You may remember the gold price was around CAD$1600/oz when we decided to get this project back in gear because we thought there were sufficient margins to make it a winning project. We're looking at CAD$2,100/oz today, which makes us that much more bullish on this project.
Peter Bell: Me too, Dean. Keep working hard on it!
Dean Nawata: Well, thanks for your continued interest and support, Peter. I am determined to make this a win and I'm available anytime for questions. I hope to have a more substantial update for you in the near future.
Peter Bell: Until then! Thank you very much, Dean. Goodbye.
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