Did you know there were a couple recent news items that didn't make it to the newsfeed on CEO.CA from Omineca Mining (TSXV:OMM), but are available on SEDAR? You can be forgiven for missing them as the company's website appears to be down as well, but there may be something happening here with the company showing signs of life.
Most recently, Omineca Mining granted 4 million stock options at 5C that vest immediately with 10-year term announced on May 14, 2018. I didn't get any, but it sure makes my risk antenna perk up! Prior to that, the company announced a new Advisory Board on May 8, 2018 and a $250,000 financing at 5C with full warrant at 7C with 1-year term in April 2018. With shares trading below 5C now, it may be tough to close that financing but look at the short-term on the warrants. I won't get into the financials, but I suspect this round is only for the bold! In all, these 3 recent news items mark a noteworthy uptick in news flow over prior years.
The company originally traces back to a spin-out from Eagle Plains (TSXV:EPL) back in 2006 when it was called Copper Canyon (CPY) and had a 100% option interest on Copper Canyon Property from NovaGold Resources Inc. The property was contiguous with the Pioneer Metals’ Grace Property, which was taken over by Barrick in 2007. The twists and turns of the company's long history are beyond me, but I like their current asset: the Wingdam Project.
As in their recent news releases,
"The 2700 ha Wingdam Project is located 45 km east of Quesnel B.C. on the Barkerville highway and provides a unique opportunity for Omineca to develop near-term placer gold production in a proven mining district. The property overlies both placer and hard-rock tenures along the Lightning Creek valley, where topographic conditions have created a deep overburden accumulation which effectively resulted in a large portion of the channel being excluded from conventional surface placer mining activity."
Note that new Advisory Mr. Leonard Sinclair was CEO and Project Manager for CVG Mining Limited "during the successful completion of the 2012 bulk sample at the Wingdam Project." Progress has been delayed since by a weak market and a technical report that had to be re-stated because it included economic projections without an appropriate basis under 43-101 rules, but it looks like they are putting the band back together again.
It's also important to note that the other new Advisor is Mr. John Kiernan, who is currently COO of Ascot Resources (TSXV:AOT) and a director of Northern Superior Resources (TSXV:SUP). Those two companies may not be household names to everyone on CEO.CA, but you should get familiar with them.
See a series of images that jumped out at me in restated technical report from 2016 here:
Also see some extended quotes from the 2016 report that are worth considering in full:
"The Deep Lead Channel contains some of the highest placer gold concentrations historically reported in all of the Cariboo Mining District and perhaps throughout British Columbia that remain unmined. Parts of the channel were previously explored by drift methods and sampled along drilled fence lines during the 1910’s, 30’s and 60’s. Compilation of the historic drill results indicates that various areas along the channel contain a gold-enriched zone with grades averaging 33.65 g/m^3 across a horizon that varies from 1.8 to 2.1 meters thick. This grade is equivalent to 13.74 g/tonne or 0.401 oz/ton. Historic and recent results from drilling and seismic surveying show that the channel floor width varies from 6 to 39 m wide and extends 2,430 m along the length of the Wingdam Property. The weighted average gold grade indicated by 8 fences of historical churn drill holes along the 2,400 m of channel controlled by the Company is 2.445 placer ounces per m^2."
"Six attempts were made to mine the Deep Lead Channel during the 1930’s and 60’s by utilizing the Australian deep-lead mining method. The method involved raises or breakthrough locations that were accessed from a parallel bedrock drift driven along the length of the auriferous gravel layer occupying the channel basement. The mining method proved to be unsuccessful through the unstable ground that directly overly the gold-enriched gravel layer. The unstable ground consists of water-saturated glaciolacustrine silt and sand layers (referred as slum) that easily cave and flow when undermined by a timber-supported raise."
"CVG combined the Australian deep-lead mining method with a ground-freeze method in 2012 and successfully completed a breakthrough drift or crosscut (CC1) across the entire width (23.5 m) of the Deep Lead Channel. The 140 bank cubic meter sample extracted from Drift CC1 (2.44X2.44-meter) produced 173.5 ounces of raw placer gold (90.9% purity). The refined-equivalent gold grade across the channel width and throughout the 2.44-meter drift height averaged 34.55 g/m^3 (14.10 g/tonne or 0.411 oz/ton). The level of gold-enrichment identified across the channel exceeds historic grade estimates (33.65 g/m^3 , 1.83-meter drift height)"
"The ability to physically sample and evaluate the Deep Lead Channel gravels using traditional exploration methods is limited. As the target gravels are located partially beneath Lightning Creek and the Barkerville Highway, and largely within a broad riparian wetland zone, access for drill testing is limited. In addition, the unstable nature of the overlying sediments makes it very difficult to complete drill holes and to recover meaningful samples. As well, the nuggety nature of the gold bearing strata does not lend itself to accurate correlation between drill hole intercepts. The depth of overburden (48.8m) and the location of the overlying creek does not make it feasible to test with trenching. Omineca believes that the only method to successfully evaluate and quantify the Deep Lead Channel gravels is with a bulk sample test."
"Omineca has also thoroughly investigated other project parameters including power options, mining methods and equipment and ground water control strategies all culminating in the completion of a bulk sample plan. Based on this work, and with all required permits in place, Company management is confident that the Wingdam project development has reached a stage of readiness for the test sampling of an initial 300 meters of paleo-channel. The Company is proposing further work on the Wingdam Property consisting of geotechnical analyses and engineering to finalize the parameters for underground freeze mining. The estimated cost for this work is $465,000."
One quote, in particular, jumped out at me as it made me think about some exciting geological developments at Atlin that led to a report by the BCGS (http://cmscontent.nrs.gov.bc.ca/geoscience/PublicationCatalogue/Paper/BCGS_P2017-01-10_Mihalynuk.pdf):
"The gold-enriched zone exposed along Drift CC1 reaches up to 1.20 m thick. The zone consists of a boulder/cobble-rich fluvial gravel layer up to 0.90 m thick and 0.30 m of underlying fractured bedrock. Historic drill logs show that significant gold concentrations are confined to a bedrock-proximal zone measuring 1.83 m thick. Results from past drill programs and seismic surveys indicates that the channel bedrock floor varies from 6 to 39 meters wide."
Simply put, could this fractured bedrock be source of the placer gold as at Otter Creek in Atlin? My understanding of this paper from the BCGS (http://cmscontent.nrs.gov.bc.ca/geoscience/PublicationCatalogue/Paper/BCGS_P2017-01-10_Mihalynuk.pdf) is that the placer gold is believed to have come from a lode deposit sitting immediately underneath placer target. That's above my paygrade, but I wonder if it's a possibility. There are pictures of gold recovered from past sampling at Wingdam and they don't look particularly coarse, but I have to to wonder if the excitement for the BC geological community from the new ideas at Atlin apply here at Wingdam?
Another quote from the 2016 technical report left me wondering about potential to use a mining approach that I heard about last week at the Cambridge House from a couple interesting people who were talking about hydro-mining. The technical report notes that most of the gold was concentrated in a small area as follows:
"The CVG drift program showed that the highest grades across the width of the channel (23.5 m), averaging 120.89 g/m3 , are confined to a narrow corridor measuring 5.3 m wide. Up to 70% of the total raw gold (173.5 ounces) recovered from the drift derived from this enriched corridor."
If most of the gold is concentrated to narrow corridor, then what about borehole mining? The surface conditions at Wingdam sound pretty bad with lots of wet earth and it may be too difficult to drill from surface, but I have to ask the question because the potential implications for economics may put things into a different ballgame. If Omineca Mining can avoid freezing the ground and just mine out high-grade section of the placer deposit, then that might change the project profile drastically. There may be challenges tracking that high-grade corridor downstream, but they may be surmounted with seismic imaging?
Have a look into this Geodrilling Technologies company, as they recently secured patents for hydro-mining system in April 2018 after several years (http://www.hicegold.com/abstracts/). I don't know anything about hydro-mining, but I sure am interested by what I've read so far. See a couple quotes below:
"Hydro-Mining is a new type of borehole mining that is designed to mine placer and other deposit-types for gold, platinum and gemstones – it's patent-pending system and methods are designed to direct high-energy pulsed water jets to both excavate and recover subsurface mineral targets using a single borehole in a cost-effective manner and with minimal ecological impact." http://www.hercgold.com/abstracts/
"Consider this example - a mining cavity is created in placer 150 feet down just above bedrock and 3 feet in height, 30 feet in diameter, and it took one 10 hour shift with three operators. This equates to mining 78.5 cubic yards of virgin ground in 10 hours with minimal environmental disturbance. If each cubic yard paid 4.0 grams (a little more than 1/10 of an ounce) of gold, more than 10 ounces could be recovered in one 10 hour shift. That’s $10,000 per shift at $1,000 per ounce gold. What if the virgin ground was paying 1 ounce per cubic yard? Recovery is 78.5 ounces per one 10 hour shift or $78,500 (A recovery of over $2m per month per one shift per day!)" http://www.hercgold.com/executive_summary/
This hydro-mining company has patents and now they need to get prototypes into the field. If it really is a "mobile “compact unit” that can mine big nuggets, flour gold and everything between" then there may be a good use case here at Wingdam. With all the work done at Wingdam in the past, this may be a particularly good place to get going using this new tech. If it can work more quickly and cheaply than any other approach, then what could that mean for Omineca Mining shares?
And if not hydro-mining, then there are other kinds of borehole mining techniques out there (https://upload.wikimedia.org/wikipedia/commons/9/95/1K_PIC-2.jpg). The Omineca Mining technical report say that they considered a variety of mining approaches, but I didn't see any discussion of borehole mining in the report. Regardless, it is great to see Mr. Leonard Sinclair getting involved with company again as he surely has a deep knowledge of the project and commitment to making it work. Watch for Omineca Mining to launch a new website and start giving life to this exciting placer gold mining project.
