Click here to recieve updates directly to you e-mail

Friday, February 16, 2018

GT Gold - don't sniff the Saddle

GT Gold Corp's saddle deposit was causing a lot of excitement last year and have recently announced some decent new results (link and link).

Summary

  • Drilling has defined a small, moderate grade deposit.
  • Moderate expansion potential:
    • South Zone: partially open to the East and West
    • North Zone - TTD057 hit good values, but surface Au samples suggest that this zone is small.
    • Porphyry mineralization in hole TTD062 is interesting, but not economic. Highest grade zone appear to be restricted to narrow zones (dykes?).
  • Decent Au recoveries from initial metallurgical studies.
I was pleasantly surprised that GT gold include a full breakdown of the DH assays (link) on their website, and as this is a new project for me I want to look at 3 areas:
  1. Size
  2. Upside
  3. Potential problems
For your viewing pleasure, you can download the Leapfrog viewer file from here (link). Please note, I haven't found the RC collar information, so they are not included.

Size

I did my normal thing, brought in the assays, had a look at the data to see if there were any trends confirm GT Gold's interpretations, that gold occurs in a series of steeply dipping veins.
Green arrow = mineralization plunge

I used this trend to create a series of grade shells.



To calculate a guesstimate of contained gold.



It looks like GT Gold have defined a small, but moderate grade resource. How can they make it bigger?


Upside

I want to see how easily GT Gold can expand the gold mineralization. So I decided to compare the drilled gold zones against the prospect-wide soil sampling maps found in the 2016 technical report.

Gold


Au DH assays and Au in soil

Arsenic


Au DH assays and As in soil
We can see that surface gold and arsenic correlate well with the gold mineralization hit by the drilling. You can also see that the 2 large soil anomalies haven't been completely drilled.

South Saddle

proposed hole = cyan lines
The South Saddle Zone has been well drilled, but we can see that the Au soil anomaly continues for another 300m to the NW. We can also see that hole TTD051 missed, at GT gold should drill a hole (highlighted) from this platform to the NE to check for the continuation of the multiple Au zones hit in drill-hole TTD053

We also see a partially tested anomaly ~250m to the East. Drill hole TTD059 hit several >1g/t Au structures and a few holes between this hole and TTD028 will test the continuation of the main South Saddle deposit to the east.

GT may also want to drill a DH to the N from the platform of hole TTD061 to test another small Au soil anomaly to see if these three zones link up.

North Saddle



The North Saddle gold anomaly is virtually untested, and is 400m long and ~250m wide. The anomaly does appear to be following a drainage and may just be an erosion anomaly, but drill-hole TTD057 hit multiple >1g/t Au structures along the eastern edge of this anomaly and a couple more holes should be drilled to see if there is anything bigger to find in the area.

Porphyry

Hole TTD062 hit some weakly mineralized porphyry (210m @ 0.16% Cu and 0.14 g/t Au - i.e. waste) and the hole was drilled into the center of the large magnetic anomaly, so it it doesn't look like it will turn into anything.

Magenta = magnetic high


Regionally

The 2016 technical report does discuss additional targets, I've been happy to see that there is good correlation between soil Au and As and drilled mineralization, and maybe a good step would be to expand the soil sampling program across the project, and if GT gold want to save a few bucks (and get quicker results), they could use a pXRF on the soil samples and map out the Arsenic as a proxy for gold distribution.

Metallurgy

We got a Valentine's gift from GT (link) with some initial metallurgical results. I quickly checked Head grade against recovery to make sure that GT tested material with different head-grades (it is common for companies to only test the 'best' material which can skew the results).



We see a nice range of head-grades from low to high, and the recoveries are sitting nicely around the 80% level. I didn't see anything in the text to explain why 2 composites had 0% recovery, it would have been nice to have had a bit of text explaining why. It would have been nice to have seen a summary of ore type (oxide, mixed and sulfide - if it is important) and maybe where the samples had come from, but these are minor niggles.

I've created a new view showing the location of the Cu assays in the DH data (link)

Conclusion

GT gold have defined a small, moderate grade gold deposit. There is reasonable expansion potential laterally, the depth extents to the South Saddle appear to be well drilled), and my gut-feel max size for Saddle/Saddle north is sitting around ~1Moz @1 g/t.

The metallurgical studies are positive, and appear to minimize any potential impact that the elevated As could have had on the deposit.

However, I can't see, from the data presented, how GT will significantly expand the project to a size where larger companies would be looking at acquiring it (say around 2Moz). Maybe with some regional exploration, several additional gold zones could be defined for drilling later on this year.

The porphyry potential, albeit from a single hole, seems to be minimal.



14 comments:

  1. 2018 will tell the tale and GTT is a good gamble at 65 cents IMO

    ReplyDelete
    Replies
    1. I'kl be interested to see GT gold's focus. I want them to run a regional program and maybe start to do some work at Pass Gossan zone.

      Delete
  2. There is Cu in the system and that may impact recovery more than the average recovery indicates. Probably worth digging into that if you think a 1.xg/t deposit works there. IMO it will take HG veins and going UG to make a mine here, and so far they seem rather busted up.

    ReplyDelete
    Replies
    1. Hello Brent,

      There is some Cu in the system (I've uploaded a Cu LF view - the link is at the end of the post), and I had initially thought that this would be an issue, with the release of the recovery results, it didn't seem to be an issue.

      In the South Saddle, the veins are close enough together to potentially be bulk mined, but outside of the North and South Zones, the number of veins decreases significantly, and more drilling will be required to see if they can define some high-grade zones.

      If you want, I'll send you the entire project or just the DH data and you can have a play with it.

      Delete
    2. Angry,
      Thanks for the offer but don't need it now. Interesting project and good disclosure so that is a positive. B

      Delete
    3. The met comps are ground to 100 μm and then a bottle roll. But to build a mill and vat leach out there will take a pretty good size deposit (I'd think well over a million ounces). Highly presumptive at this stage. So that's why more likely it should be evaluated for now as a potential low grade open pit crush and heap leach operation. With that they could have more copper in the leach pad to Brent's point because the comps are only vein material (whereas some of the zones also contain dykes and veins carrying copper). Also they wouldn't be grinding heap leach material to 100 μm ... so in effect the prelim met work may not be very relevant.

      Delete
  3. I wrote about this back in 2016. I said that generally speaking hi grade soil samples (poorly developed soils) won't necessarily translate into a hi grade mineral resource. And that the mineralization looks discontinuous (i.e. no U/G mining for them). And, the Saddle South is hosted by a mountainous ridge so it has limited lateral expansion potential. I also wrote that it doesn't seem to be open down dip (<250m below topographic surface i.e. the mineralized interval). And that if lucky it will be a low grade open pit mining operation but the deposit would be small and most likely won't make economic sense to develop it. My second article noted that the newly identified porphyry copper-gold mineralization is low grade (not economic) and unfortunately for them won't help with the economics of the project. I think that there is some potential for expansion but limited (TAG, the extremities of those anomalies at Saddle South are downslope from the ridge, so ...) . These types of gold-silver veins/stockwork that they are intercepting at Saddle South are probably on the epithermal side and not mesothermal and copper-rich so (probably) they should have no problems with the copper (because Brent is right that copper is a known cyanicide).

    ReplyDelete
    Replies
    1. Hello Dan,

      The North Saddle soil anomaly is down slope as well, but I was surprised by the number of structures hit in hole TTD057. Essentially, we are getting into a circular argument -we don't know if there is gold in these areas until they drill it, and they represent the most 'obvious' places to drill.

      Regarding the copper - I included the met section as according to the samples sent, they were getting good (~80% recovery). so it appears to be (unless the met samples were biased) a minor (or localised) issue.

      Delete
  4. I checked your Cu file. It's Saddle South, right? Indeed there is some copper in there as well. Later.

    ReplyDelete
  5. My comment referred to the fact that part of the Saddle South anomalies are being drawn on the map but they actually cover steep slopes where 'bleeding' of the upslope veins/minz occur (see p 8 of their presentation). I won't get into details here as it is not worth our time. Their only chance here is to prove some kind of minz continuity that will allow them to do a mineral resource estimation for U/G mining. If they manage to do that then they can build a mine up there even if they would end up having <1Moz.

    Saddle North is on flattish land and those anomalies are legit. You drill the best anomalies you find the mineralized porphyry which generates the strongest geochem signal. You drill adjacent to it (lesser anomalies) you'd find the associated veins surrounding the Cu-Au intrusion. As witnessed by your aforementioned hole. These kind of veins could be found kms away from the main intrusion that has generated them therefore I am expecting them to find more of these. The problem is if they are economic to mine - individually or bulk mining. Later.

    ReplyDelete
  6. Raising 6.5 million at 84 cents flow through. Over 9 million in cash for 2018 exploration and drilling. GLTA!!

    ReplyDelete
  7. $ .84 flow through is ACTUALLY around $ .40 after tax cost to the PPers. ALL the dough is restricted and ALL needs to be peed away in full this year. That's a massive large swack of rock bottom dilution in 12 months, and guess what, these boys aren't in really in the rock business any more, they are in the tax avoidance business. Upside is effectively capped for an extended period.

    ReplyDelete
    Replies
    1. Perhaps I should splain a tad further. Much of the PPers likely already have free trading paper. They subscribe into the PP and can effectively replace their old paper with new and improved 'tax assisted' paper. Naturally everybody has the same idea and SP sinks to the point where it's not profitable any more. This is a massive large swack of dilution any way sliced and that is never good.

      Delete
    2. would the upside cap you speak of be at 0.84 ?
      what if a major steps in for funding?

      Delete