Interview with the Gold-CEO, that the majors HAVE to talk to!
Contact Gold (TSX-V: C) acquired 13 projects on the famous Carlin-Trend in Nevada. Big major Goldcorp was one of the first investors in this gold exploration company. We spoke with CEO Matthew Lennox-King in detail about the potential of his projects, the opportunities in Nevada and the gold price.
Last year Contact Gold has staked 13 Claims on the famous Carlin-Trend in Nevada. From the beginning Goldcorp invested in your company and they paid 7,5 Mio. Dollar for a stake of 15 percent. This is something very rare. How did this investment of a big major come about?
Matthew Lennox-King: Contact Gold was formed from by purchasing 13 properties (2,762 claims) from Waterton Global Resource Management. Nevada and the Carlin-Trend are very important to major gold miners. Production from the trend accounts for over a third of Newmont’s global gold production profile and half of Barrick’s annual global gold production. A majority of the gold deposits on the Carlin Trend are easily heap-leachable and therefore very cost effective to mine resulting in very low all in sustaining costs (“AISC”), which are highly valued to majors and are why Newmont and Barrick have such large operations on the trend. Goldcorp, Kinross and OceanaGold have all expressed interest in acquiring deposits on the Carlin Trend to bolster their production profile, reduce global jurisdiction risk, and bring their global AISC down. To that end, Kinross purchased the Bald Mountain mine three years ago, which is located on the southern most part of the Carlin Trend, south of our Pony Creek Project. Both Goldcorp and OceanaGold have a stake in neighboring Gold Standard Ventures (“GSV”)’s Railroad Project (12.7% and 15.5% respectively), which shares the same geology as our Pony Creek, North Star and Dixie Flats projects. Goldcorp took interest in Contact to gain a strong technical team with significant experience in Nevada and a history in financing exploration as well as a foothold on the south Carlin Trend in a new district play that encompasses both GSV’s Raliroad project and Contact’s Pony Creek and North Star properties.
Your flagship project is called Pony Creek. With your first drill program you delivered really good results. For example, you drilled 2.51 g/t Gold over 47.24 meter. May you explain our readers the potential of Pony Creek and something about the history of the project?
Matthew Lennox-King: Pony Creek was owned by Newmont and Barrick in the late 80s and early 90s when exploration was at its peak on the Carlin Trend. Both Newmont and Barrick were
focused on drilling a particular part of the stratigraphy, the Devils Gate-Webb Formation contact, that was then understood to host all of the gold deposits on the northern part of the Carlin
Trend. After drilling numerous short- vertical reverse circulation holes on various fragments of the now consolidated Pony Creek project, and never hitting what they considered to be the right
stratigraphy, the property ended up in Allied Nevada’s exploration portfolio in the early 2000s. The project sat dormant for 10 years with Allied Nevada before Waterton bought it out of Allied’s
bankruptcy in 2016. A historical resource estimate (2006) was calculated for the Bowl Zone containing 1.4Moz @ 1.5 g/t Au. This resource estimate is historical in nature and does not meet modern
guidelines to classify as current.
In June 2017 Contact acquired Pony Creek from Waterton. Through the remainder of 2017 we delivered a successful drill program, hitting gold in 40 of 42 holes. These results were critical in confirming the Bowl and North Zone could be expanded. The results you have quoted are from the first results of the 2018 program and that interval is the best oxide gold interval drilled on the project to date. These results are very exciting because they were step-out holes to the west and north of previous historic drilling and were focused on a structure that seems to contain higher grade oxide gold mineralization. These early results confirmed our target generation completed in 2017 works and opened up the west side of the Bowl Zone for further expansion of oxide gold mineralization at better grade than had been previously discovered.
Moreover you identified a mineralized zone, called “West Target”. It is a new discovery on the project. May you tell us what you expect from this zone und what will be the next steps. Is there a coherent geological structure?
Matthew Lennox-King: The West Target was defined in early 2018 based on results from the 2017 exploration program. It is a 2km long gold-in-soil anomaly underpinned by CSAMT anomalies and defined at surface by a silicified jasperoid conglomerate. Critically the footprint of the gold anomaly is larger than either the Bowl or North Zone and trends towards GSV’s Jasperoid Wash discovery (2018) that is extensively being drilled. We know from geophysical data there is a coherent north-south structure that is spatially associated with the gold anomalies defined to date and it is likely the same structure that is controlling mineralization at Jasperoid Wash.