“El Dorado” revisited
By: Jason Smith
Rise Gold breathes life into a historic gold mine
It’s a truism in the gold mining industry that “the best place to find gold is where you’ve already found it.” The industry abounds with stories of companies that have breathed new life into historically productive gold mines.
A good case in point is Kirkland Lake Gold. Back in 2001, the company (then named Foxpoint Resources) bought the Macassa Mine and other past-producing assets in Kirkland Lake, Ontario for a relative song. The Kirkland Lake area had produced 47 million ounces of gold in its storied history, but prior owner Kinross Gold was willing to part with it at that time, believing the complex’s best days were behind it.
Fast-forward to 2018, and Kirkland Lake just finished a year in 2017 where Macassa produced 194,237 ounces of gold. Today, Kirkland Lake Gold’s US$2.8 billion market cap puts it in the same mid-tier category as Kinross.
How did Kirkland Lake Gold manage this feat?
In part, by using existing mining infrastructure to test for deeper and overlooked sources of gold on the complex. Then, once it had outlined a large resource, the company was able to leverage that in-place infrastructure to restart production for a fraction of the cost of building a mine from scratch.
Now, junior explorer Rise Gold Corp. (TSX.V: RISE) is taking a page out of Kirkland Lake’s playbook.
Giving a Past-Producing Mine a Fresh Look
Last year, Rise Gold took ownership of the Idaho-Maryland gold mine near Grass Valley, California. The mine’s history dates back to the mid-1800s and includes a prolific period that ended just as U.S. involvement in World War II was kicking into high-gear.
As Rise Gold CEO Ben Mossman explains, “Wartime restrictions shuttered all gold mining in 1941. The idea was to focus all U.S. resources on mining base metals for the war effort. The idle war years left Idaho-Maryland in a state of neglect. Combined with a then-fixed gold price of $35/ounce, higher post-war operating costs eventually forced the mine to close.”
Between 1866 and 1955, the Idaho-Maryland complex produced 2.4 million ounces of gold at a grade of 17 g/t. At its peak, the mine produced 129,000 ounces of gold annually. To give you a sense of how rich that historic grade is, consider that modern mining companies regularly mine gold at surface with grades of 1 g/t or less. And underground operations like the one at Idaho-Maryland are considered mineable with grades between 3 g/t and 6 g/t.
If the current drilling program Rise has underway encounters grades that even approach the mine’s historic grades, gold production could resume in fairly short order.
Encouraging Early Signs
The company drilled its first hole on Idaho-Maryland in November 2017. The hole tested for extensions of gold mineralization that had been extracted from the mine’s existing workings. Those workings include a mine shaft sunk to a 3,400-foot depth, and numerous mine levels.
The first hole extended for 4,654 feet (1,419 metres) and reached a depth of 3,794 feet (1,157 metres). The best intercept, released in January 2018, was from a 2.7-metre area of the Brunswick #1 Vein (B1 Vein) grading 62.7 g/t gold at 540 metres’ depth (about 50 metres below the B1600 level).
And then there’s the fact that this hole’s highest grades came from the wall rocks of the quartz veins that have hosted the lion’s share of the mine’s gold.
Mossman explains, “The presence of high-grade gold values in the walls of the quartz veins was not expected based on historic documentation. This result highlights that despite the huge library of historic records and past mining of 2.4 million oz of gold, we know very little about the real potential of the Idaho-Maryland.”
Adding to this new data point’s salience is the fact that the B1 Vein lies near the mine shaft and all three mine levels, making it easily accessible from existing mine infrastructure.
Prior exploration of B1 Vein took the form of drifting on the B2300 level, and the vein remains untested below this point. In other words, there may be a lot more gold in this area of the mine, both at depths previously untested and near previously mined areas that prior operators appear to have ignored.
More Drilling on the Way
To fully assess how much gold this area of the mine may hold, Rise is calling for a 13,100-metre drilling program consisting of 19 holes. Success from this effort could lead not only to a significant gold find at B1, but it could also open the door to a similar style of gold distribution elsewhere on the property.
“This intercept at the Brunswick #1 Vein is a surprising event,” says Mossman. “The possibility that there could be very substantial gold mineralization in the developed upper levels of the mine is astonishing, especially considering that the Brunswick #1 Vein was one of the less important veins in the mine historically, and that it is one of dozens of known veins at the Idaho-Maryland.”
Will Rise Gold Corp. (TSX.V: RISE) rediscover “El Dorado” at Idaho-Maryland? Further exploration is needed, but early results suggest the answer just may be “yes.”