Please enjoy the transcript of my interview with Chris Paul of Ridgeline Exploration, which is managing Jiulian Resources' exploration program at the Big Kidd exploration project in southern British Columbia. Read the full interview for more important information about this unique junior mining situation. Note, this is sponsored content.
Also, consider an article I wrote with further notes on prior work done on the property here.
Peter Bell: Hello. I'm Peter Bell, and I'm here with Chris Paul to talk about Jiulian Resources, JLR on the TSX Venture. Hello, Chris.
Chris Paul: Hey, Peter. How are you doing?
Peter Bell: Very well, thanks. How are you?
Chris Paul: I'm pretty good. I'm pretty excited right now. We're just gearing up for a pretty big drill program down in southern BC. Finally get to work in my neck of the woods, in my backyard. I've been working hard up in the Golden Triangle all summer and it's remote up there. You're about five hours from the nearest town, so, being able to work in your hometown of Kelowna, having the core shack and everything based here is quite the luxury to say the least.
Peter Bell: Well, I wonder if it doesn't translate into better field work, too.
Chris Paul: I think so. I think there's always an element of distraction when you're trying to manage a camp of 20-plus people, and two drills and helicopters, and anytime you add that, there's always that element of trying to be more of a logistics manager than doing actual geology. It is a common problem, but one that can't really be avoided when you're working that remotely. You're right. It'll help us to focus a lot more on the actual drilling and less on what's breaking down in the camp.
Peter Bell: And you're not joking about the drilling either. There's been some good news from the company explaining what's coming and grateful to hear about the big rig. Do they call it the Hydracore?
Chris Paul: No, the Hydracore 2000 is the smaller rig. That was what we were employing at the Hank last summer on the Golden Ridge Project I was working on. That's heli-portable. It's a sort of a smaller exploration rig that is nice and light for the helicopters. Typically, they call it the 2000 because it's capable of drilling 2,000 feet. That is about 600 meters as your max, when conditions are ideal.
We've employed a new style of rig. We hired a new company of Smithers called Revolutionary Diamond Drilling. These guys are great. They're innovators. They're led by a fellow by the name of Trevor Hooper who is a fairly well-known, well-respected diamond driller in Canada. He's basically branched off to do his own sort of entrepreneurial thing. What they've done is actually get a grant from the Government of Canada. I believe they got around a million and a half dollars from the government to basically build a new diamond drill rig.
Peter Bell: Really?
Chris Paul: Yes. Diamond drills really haven't come a long way in the last 20 years or so. There's sort of the two main ones – you’ve got your Hydracore, which is the smaller one, and you’ve got the A5, which is the bigger one. There's lots of drilling companies out there, but no one's really tried to innovate. People just keep trying to sort of use the same old machines, and we'll call them dinosaurs because they just don't want to evolve. They just want to use what's already out there.
Trevor is an innovator. His drill is all digital. There's just a whole bunch more advancements on his drill rig. I could go on for about half an hour, but I don't want to bore you with all the details. Long story short, it's capable of drilling 3,000 meters if you really wanted to go that deep. And it's powerful, so it can drill quickly.
Peter Bell: Wow.
Chris Paul: It's lightweight. It's about the size of a Hydracore 2000. If you were to employ it on a helicopter drilling job, then it's the same number of lifts as a Hydracore. It's amazing. You look at these old drill rigs and it's just like a spider web of hydraulic hoses, like a Hydra going off in all different directions. Go to these guys' website – this thing's got four hydraulic hoses. It's as simple as can be and it's really great.
We're super excited to be testing out this new rig. It'll be a skid job in this case. No helicopters involved, but obviously if all goes well, then Ridgeline's gonna be working a lot with these guys and employing it on some of the other projects that we work on as well as some of the fly jobs.
Peter Bell: That's amazing. I didn't realize the significance of all that. Thank you. Is this one of the first campaigns that it'll be used on?
Chris Paul: Pretty much. We're trying it out and Trevor understands that and we're putting a lot of faith in each other. He's given us a pretty smoking rate, which works for both companies. It's winter work for him when times are typically quite slow in the industry, especially in British Columbia. There's not many places you can drill in the winter, except for Southern BC.
The only other people I can think of that are drilling this time of year is probably Westhaven, which is pretty close to our project that you called to talk about today which is the Big Kidd. We're just east of there.
Peter Bell: I've seen somebody posted online the link to one of the highway cams and it's looking back pretty close to the area around the bend in the highway where your project area is located. Pretty funny to see.
Chris Paul: It’s funny you bring that up. People always ask, "What's the snow like? And is that gonna be a problem?" Well, actually, we need a bit of snow, ironically. This is something I didn't know until very recently that when you're winter drilling at night it gets down below zero degrees into the negative temperatures and the water lines will freeze up if you don't insulate them properly. It turns out that snow is a great insulator.
Peter Bell: Isn't that amazing?
Chris Paul: When you're winter drilling, you want to see at least a foot or a few feet of snow on the ground because that'll insulate your water line and stop things from freezing up on you. It's kind of perfect. We’re in a nice little rain shadow just east of Merritt, so it's very dry out there. You just get a few sparse pine trees and a few feet of snow. We couldn't ask for better conditions.
Peter Bell: Good. Well, I might mute myself here a second as they’re making announcements on the ferry.
Chris Paul: No problem, no problem. If you have any specific questions about the project you wanna talk about, I can go on a little rant here while you mute the phone. Yeah, ask away.
Peter Bell: I'm afraid they're gonna keep going. But maybe one quick question: the geology. Shovelnose versus Big Kidd?
Chris Paul: The geology – we're very close to each other. To speak on the geology of the Big Kid, I think it's important more to talk about the sort of Copper Mountain to New Afton story.
There's a belt of rocks called the Nicola Group. That belt of volcanic rock is divided into three main groups, you've got the West, the Central and the Eastern facies. The Central is really the important one, as that's where all these alkalic porphyries such as Copper Mountain, New Afton are located. Moving north, there's a whole bunch more as you go up north through the Quesnelia belt between Copper Mountain and Afton, there's a very important structure that's separating the western facies from the eastern facies, which travels right through the Big Kidd property called the Kentucky-Alleyne fault segment, which we're in. It's an extremely important structure because what it's done is controlled the emplacement of all these alkalic copper-gold porphyries. It's amazing the Big Kidd Project is sitting where it is, between these two major mines, and is so under-explored.
The last time it was actually drilled – the Big Kid breccia, which is the target that we're after – was 2003. It was first discovered, we'll say, when they were putting through the connector highway from Merritt to Kelowna. There was a road cut that sort of intersected across this important structure that I'm talking about that runs from Copper Mountain through the Afton. There was some really nice copper-gold mineralization in the early '90s.
In 1993, when it was discovered, it was picked up right away by Placer Dome. They did a little bit of exploration and it didn't take them long to find that there was a bunch of pipes on the property. The breccia pipes is about 600 meters long by about 400 meters in width. It's an intrusive breccia and those are very important structures, especially when you're looking for porphyries because it's evidence of very explosive hydrothermal mineralization. Basically, the rocks were under so much pressure at that depth that they basically exploded into a breccia of shattered fragments that were filled in by hydrothermal solutions bringing up copper-gold, potassic alteration, and all these sorts of things. It's basically evidence that there was so much fluid pressure from these mineralizing fluids that they actually exploded everything at depth.
When Placer Dome started drilling it in the early '90s, they put a few holes near this breccia and they were all very well mineralized. But, of course, they were just putting in shallow holes, 200 meter holes and whatnot. Interestingly, a junior called Christopher James Gold Corp came in right after that and were able to pick it up from Placer. They did a few drill programs of their own and sort of took it on from there. They drilled in '97, '99 and then 2003 was the last drill program. Pretty well all the holes that they put into this breccia pipe were mineralized all throughout the breccia but they just did these short little holes – angled holes. In 2003, they ran out of money. They were drilling and were basically on IOUs with the drillers. The drillers picked up and said, "We understand you guys are a really excited about this project, but without any money we're packing up shop and getting out of here." And that was the last time the breccia was drilled. Crazy that here we are in 2019, 16 years later, and this thing has somehow been orphaned, right? No-one's really looked at this thing.
Our group identified it a couple years ago and started talking to the management at Jiulian Resources, who ultimately ended up with the project. After Christopher James ran out of money, another small junior called Gunpoint picked it up and didn't do any exploration, but sold it to Jiulian. Jiulian got it for a really good deal with no underlying royalties and held on to it for a couple years. Xstrata, a major mining company, came in 2012 and instead of drilling the breccia pipe they went off into the far corners of the property. They had a young, recently-graduated geologist running the program and he wanted to drill these geophysical anomalies from some airborne surveying. They never even drilled the breccia. They went and drilled like five holes off in far reaches of the property, nowhere near the known mineralization then said, "Thanks, Jiulian, but we're not getting enough excitement out of this thing to keep going." And they dropped the option after that. Jiulian was sort of was dead in the water, holding onto this project that they were given back and didn't really do anything with it. That was the last thing to happen in 2012.
We came along and said, "This is unreal that this breccia deposit's sitting there and is not getting looked at." You’ve got all these major mines in the area: Highland Valley to the West, Copper Mountain just to the South, and Afton just to the North. Infrastructure is incredible with the highway. Power-lines crossing the property. There's a cell tower on the property! Pretty much everything you could ask for. Quite subdued terrain, too. It's not like the rugged glaciers of northern B.C. It was pretty much a no-brainer. We came along, decided to take on the project, and here we are a year-and-a-half later. We've got permits in hand, five-year permits, and the drill's going to be spinning tomorrow. Exciting times.
Peter Bell: February 1st, 2019, here. Amazing. What a sleeper. It seems like a sleeper story in many ways. I appreciate what you said about Xstrata chasing this anomaly and that anomaly – it's nice that they left this thing that should've been followed up for whoever could find the time and make the effort to do it. Wonderful that it's you guys.
Chris Paul: We shake our heads, "How could anyone do that?" You’ve got this 600 meter by 400 meter surface showing where every hole they put into this thing has returned excellent copper/gold mineralization – and you're talking about short holes. When they got into it, you're hitting 120 meters of over one gram per tonne gold equivalent. When I say gold equivalent, that's just the copper and the gold component. There's about a four-to-one gold/copper ratio. You'll have, say, 0.2% or 0.3% copper and you'll be getting 0.8 to 0.9 grams of gold on top of that. It’s a really gold-rich porphyry system, which is something you don't see very often with ratios like that but we'll take it.
Peter Bell: And let's do some more exploration on all that to see maybe where's a more copper-rich zone, too. Is the gold still running high in part with more copper? Will we end up getting elevated levels of both?
Chris Paul: No kidding! That brings up a good point – if the 0.2% copper is carrying 0.8 gold with it, then you can just imagine if you start to get into some 0.5%-0.7% or 0.8% copper. If the ratio is consistent, then you're going to get into some really wicked-high grades. Especially for a porphyry deposit. In British Columbia, it's just not something you see very often. And to that end, you probably saw the recent IP work that we just did.
Before we went in and started drilling here, we wanted to do a little bit of IP work. Again, that's something that didn't cost us very much. We had SJ Geophysics, out of Vancouver. It was a short two-three hour drive from Coquitlam for them to get up there. They started the survey in the beginning of December and did a 3D array, which is a little bit better than your typical 2D array surveys where all the electrodes are along a single line. They actually offset the electrodes, so it's a special type of array. That allows them to see, not only in two dimensions as with a regular IP survey, but they offset them so you get that third dimension of data. When you actually do the 3D inversion, it's a more robust model because you actually are collecting data in all three directions instead of two, as you normally do.
And we did very tight-spacing. We did 50 meter dipoles, as opposed to 200, which we've done in the past. Fifty-meter line spacing centered over this breccia pipe – we wanted to know, "We have the information on the known mineralization that's already been drilled. Let's survey over that and let's see where it's going. Is there a plunge to this thing?" We don't want to do what Xstrata did and survey the whole property to go test all these funny anomalies. Let's start where it's known and let's work our way up from there.
Crazy enough, we got the results back and what you typically expect in a porphyry a nice copper/gold core, and then outboard of that you'll have a pyrite halo that will be very chargeable – the highest chargeability. In this case, the highest chargeability actually correlated directly with the known mineralization in the chalcopyrite. The pyrite halo isn't very large on this thing. It makes our job easy when you know that the mineralization has high chargeability. It helps with targeting.
That survey showed us, as you saw, that this thing has got the Big Brother zone at depth. On surface, we're getting chargeabilities greater than 40 milliseconds, which is incredibly high. Most people are happy with +20 seconds chargeability. At the Big Brother zone the highest reading we got was 136 milliseconds. That’s just incredibly, incredibly high stuff.
Peter Bell: A lot of metal holding it.
Chris Paul: That's exactly right. People get skeptical with that. How many times have you seen companies get excited and announce they've got this chargeability anomaly, then they drill it and it's clay, or groundwater, or graphite or something other than sulphides? The reality is that you're not going to get chargeability that high in anything other than sulphides, which is metal. You need sulphides to create 136 millisecond chargeability. We're fairly confident it's not clay or magnetite or something like that. We're fairly confident that there's at least quite a bit of sulphide down there. We'll see what the grades are.
Peter Bell: Absolutely. Again, great to hear another bit of innovation there along the way from you guys using new tech to do things better. One question I had from that 3D image that was published showing the geophysics was depth range of that Big Brother zone.
Chris Paul: I would say the top of the Big Brother is 200 meters below surface, approximately. It's not too deep. When you do 50 meter dipoles for really tight-spaced, high-resolution IP surveying, you're not going to get as deep. When you do 50 meter dipoles, you're looking down confidently about 500 meters. That's all we need to see in the first stage of drilling, as we just want to use that IP to show us where this thing is plunging. What direction is it heading? And if we can get down 500 meters of mineralization with the drill, it's basically "hallelujah," right? You just have to keep tracing it down-dip with a drill. We don't really need the IP to show us what's at 1,000 meters – that's the drill's job, at that point.
Peter Bell: The beauty is, again, that rig you have will be able to keep putting casing down the hole and keep that hole going.
Chris Paul: That's right. We're certainly not limited by depth with the new Revolution drill, that's for sure.
Peter Bell: What a scenario you've found here. It's amazing. And then, to put it into a company that was valued by the market there by a very low number. I was looking at one of the decks from December, I believe, and the enterprise value at the time was just under $1 million. And that was with $1.2 million dollars cash in the treasury at the time. I think there's been more come in with flow-through since then. It’s all a very unique setup for a BC exploration story in February here – unheard of.
Chris Paul: That's right. And I'm not in management of Jiulian Resources. I’m with Ridgeline, I should clarify. Our services company has been contracted to do the work here, but from what I understand, I believe there's around $1.5 million in the bank. I was talking to the Directors and I know some warrant exercises have already started to come in. I saw we had a pretty good trading day today, I think it closed around 14 cents. When I was talking to people at Roundup, the market cap was $2.8 million dollars. With $1.5 million bucks in the bank, you’ve got a $1.3 million dollar enterprise value. You could consider the value of a shell as just $1.3 million on its own, so you're kind of getting the property for free as it is right now.
Peter Bell: Well, people don't know what to make of it. And I think that's a thing around Ridgeline Exploration itself – people still wondering, "Who are you guys? What are you doing? What's going on?" Being able to help execute this field program will help put you guys on the map for 2019 in a big way.
Chris Paul: I sure hope so. Obviously, Ridgeline was working on the Hank Project this summer for Golden Ridge and certainly had a pretty nice success story this past summer with the discovery of the Williams Zone. It sure would be nice to go back-to-back here, right from the summer Golden Triangle discovery into a winter discovery down in Southern BC. Then, of course, back to it in the summer in the Golden Triangle at the Williams Zone.
Peter Bell: I wonder about potential risks with the new drill. Do you foresee any headaches? I guess that Revolution Drilling wants to see it work!
Chris Paul: It's a good question. It’s something we were concerned with, too. Anytime you're testing out something new there's always potential for bugs. We addressed that with Trevor by creating a contract where we're paying an all-in-rate. Instead of your typical drill contract where you pay so much for core, but if the drill has to ream the hole or stabilize – all these other things – you’re typically paying for that as well. All the muds that are consumed at the drill – you're paying for that, as well. Unfortunately, it's always been a system of trust. The way it works is, at the end of every shift, the driller has a paper time sheet where he writes down, "I used one bucket of this $500 mud, and another bucket of this $300 mud." Realistically, did he really use a whole bucket? Who knows?
The Revolution drills, as I was saying earlier, is all digital. What it's doing is actually recording – to the drop – how much mud was used, how much diesel was used, how many minutes of stabilizing was done. At the end of every shift, you get it sent digitally to you on your computer. You can see exactly what the drill production was from the shift. They were coring from 7 P.M. to 9, and then they had to do 20 minutes of stabilizing – all this and that eliminates the need for trust anymore on those drillers' paper time sheets.
You get charged for all that stuff. In this case we said, "Look Trevor, you guys are new, and this is a great-looking system, but let's do an all-in rate for this first one." And Trevor agreed with that.
Basically, we're only paying for core that's delivered. Let's just say, God forbid, that there's something that isn't working correctly on the drill for three days straight – that's no cost to the company. We're only paying for what gets delivered to us as core and nothing else. They're taking care of their own accommodations and everything else. It's a great contract. It all gets back to the old thing of more meters in the ground. The less we're spending on everything else is just more meters in the ground.
Peter Bell: I wonder core diameter. Do we have a sense?
Chris Paul: We're going to start with HQ – we'll collar all the holes with HQ, which is your wider diameter core. Once the ground conditions are good – typically in the the top, say, fifty meters of the hole the ground will be quite rubbly and broken with bad ground conditions – once the ground conditions are good then we connect it down to the smaller core size, which is NQ. Having that sort of HQ casing go down whatever it is, call it fifty meters, allows you to go deeper with the NQ. We'll be using the two different core sizes in conjunction.
All of it's going to be oriented, so we'll be able to get the true strike and depth off all the off all the structures in the core. All your mineralized veins and contacts – everything. We'll have a really good idea after this program of where things are plunging and trending, and how we're going to step-out on this thing. And if there's a resource to be built, how we're going to orient the holes sections to build that resource.
Peter Bell: Wonderful. And that breccia zone shows at surface there – it lit up on the 3D Geophysics bit as well. A nice low-risk target to begin with.
Chris Paul: No question. Like I said, we're going to start in the known stuff and we're going to test a few different orientations.
The great thing is the past operators have done all the legwork for us. They narrowed it down for where to start. The only thing that they didn't provide is what the orientation of the mineralization might be, whether that's mainly sets of mineralized veins trending northwest or northeast, say. We don't know that yet.
The first few holes are designed to test a few different orientations and figure out, "With the oriented core, what is the optimal orientation for our drill holes?" Once you establish that, then it’s a matter of stepping-out at depth, along strike, and building it out.
Peter Bell: Some geology to figure out there, too. I wondered about that breccia at surface, and then the Big Brother at depth. They seem to kind of be pointing towards each other in some way, but weren't showing up as being connected on the chargeability there.
Chris Paul: When we showed them in the last press release with that video fly-by of the 3D model, we clipped the chargeability for that model at, I believe, 43 milliseconds. What you're seeing there is everything's greater than 43ms. Now of course, you could put more info in there but it just gets too noisy for people to understand. If you click it to say 20 milliseconds, then you start to see a bit of a plunge – starting at surface and plunging southwest to connecting with the Big Brother. I think it's better illustrated if you look at the 2D section that we put out, I think we have one section on the news where we show where the historic drilling is and then where the yellow or orange colors are plunging to the west on-section with Big Brother. That's where things really light up – at the Big Bother.
Peter Bell: Thank you.
Chris Paul: Our hope is to get some nice mineralization at the surface that might bode well for a potential starter pit situation, then possibly the grades might get better at depth in Big Brother and you'd be looking at somewhat of a block-cave type scenario, like Afton.
You look to Copper Mountain to the south as an open pit operation, that gives some idea of what sort of tonnages and grades are needed to justify an open pit. Then, Afton to the North is a block-cave operation. Again, another idea of what the economics are in this part of the world. What sort of grades and tonnages are economic for underground operations – Afton is somewhere around 0.8 gold equivalent. That's enough to justify a very deep underground operation there. Their pay-zone is 1,400 meters below surface. Sometimes you hear people saying, "Big Brother, great – but how deep is it? How you guys gonna mine that deep?"
The mine in Kamloops – their deepest deposit is 1,400 meters below surface at 0.8 equivalent. So, 0.4% copper and 0.4 grams gold is working there. They’re making money.
Peter Bell: Wonderful. Thank you so much for all the introductory information here. A lot of stuff I didn't know that I didn't know!
Chris Paul: You've got it, Peter. Always happy to talk about the project and obviously there's still a lot that we don't know ourselves. It’s gonna be revealing itself over the next couple of months here.
I hope that we should have some good drill results hopefully in March. We're gonna have very fast turn around on the assays. Of course that was a big problem in the summer, especially in the north where you have so many companies all drilling at once in one small part of the world the labs get pretty back-logged.
We're gonna be using ALS in Kamloops. That's one of the biggest labs out there. Their capacity in the winter is wide open, things are slow. They're promising some very quick turnaround times for us. We've also done some negotiations with them for even faster turnaround times, so there's always the option for getting rush assays. They like to charge double the price for rush assays, but we negotiated a better rate – they're gonna give us 1.5x the price. We should get turning turning around in a week if not less, so we should be able to have some drill results pretty quick.
Peter Bell: Amazing, thank you very much Chris Paul.
Chris Paul: Anytime Peter! Great talking to you.
Learn more about JLR on their website, http://jiulianresources.com
