The Meadowbank Mine is the only operating gold mine in Nunavut. A conventional open-pit mine that began production in 2010, it is expected to produce 430,000 ounces of gold in 2014. This would make it Agnico Eagle Mines Limited’s largest gold producer of the year. The mine has 1.8 million ounces of gold in proven and probable reserves.
Some 300 kilometres southeast of the Meadowbank Mine is another Agnico Eagle gold deposit at the high-grade Meliadine Gold Project. This project has 2.8 million ounces of gold in proven and probable reserves, but is not yet in production.
And a mere 80 kilometres south of the Meliadine Gold Project, still in the Nunavut Territory, is the Pistol Bay Gold Project.
“We already have visibility on approximately two million ounces in the Vickers Zone and I would estimate that we’ll probably have visibility on more than that by the end of this year,” states Jon North, president, CEO, and founder of Northquest Ltd. “Geologically, the rock formations at Meadowbank, Meliadine, and Pistol Bay are the same age and there is no geological reason for why additional gold deposits will not be discovered and put into production in Nunavut.”
According to North, the gold occurrences of the Pistol Bay Gold Project appear to line up along a westerly trend, parallel to the westerly, linear trend of the Meliadine gold deposits to the north, which are on the opposite side of a sterile, granite gneiss block. This makes the Pistol Bay Trend a structural mirror image of the Meliadine Trend – with excellent potential for the discovery, delineation, and mining of additional gold deposits.
A man with a mission
North founded Northquest in 2008, as a way to provide resource investors with an opportunity to invest in a company that was focused on exploring for gold and other metals in Canada and other prospective geological terrains. The emphasis has been – and continues to be – on selecting projects in permissive rocks and in jurisdictions and geologic terrains that have not achieved exploration maturity.
“Essentially, I choose which rocks to work on and that’s where I go,” states North, who adds that at the time when Northquest purchased the Pistol Bay Gold Project in late 2010, the company was exploring for gold in Mali and had commenced applying for gold exploration permits operations in Myanmar (previously Burma). “Today, the Pistol Bay Gold Project is the company’s top priority. Every aspect of exploration that we have done on this property has shown spectacular results. The Pistol Bay Gold Project’s results are the best results of my career – and I’ve been doing this for 30 years now.”
The Pistol Bay Gold Project consists of 861 square kilometres of mineral rights covering a 90-kilometre strike length of a two-kilometre wide deformation zone known as the Pistol Bay Corridor, which contains numerous gold occurrences. The initial, optioned claims consisted of six claims covering an area of 54.4 square kilometres. Four major campaigns of claim staking and permitting have been completed since and the property now consists of 104 claims covering an area of 861.5 square kilometres. Field operations began in April 2011, and major drilling campaigns have occurred in every summer since.
Not the best of times
Unfortunately for North, the mining exploration industry has been in a low cycle over the last few years. This has slowed down his progress to date.
“I would call the current state of the industry ‘diabolical’,” he muses, adding that if it were the same market conditions experienced in 2004, the Northquest Ltd. would probably have a market cap of several hundred million dollars, rather than the $12 million cap it has today. “What we have had since we started is a nominal amount of money. But the fact that we have survived is because of our great results.”
According to North, there are 17 known gold occurrences on the property. Although many of them are very promising, work has focused on the Vickers, Sako, and Bazooka Zones.
“INCO owned claims in the area from 1983 to 1989 and the Vickers Zone was one of the areas they identified as warranting further work,” explains North. “At the time, it was called the Wilson Bay Zone and the man who was responsible for the discovery was INCO geologist Dwayne Car. Once we purchased the property in 2010, one of the first calls I made was to Dwayne Car and he agreed to come out of retirement to work for us as our current vice president.”
The first phase of the company’s 2011 exploration work saw drill holes at the Sako, Cooey, and Pistol Porphyry occurrences. The latter two were considered lower priority for further work. No work was competed in 2011 at the Vickers Target because the claims covering the target were the subject of a dispute. The second field season saw additional drilling at the Sako Occurrence and the first holes were drilled at the Bazooka Occurrence. Good results deemed that both be targeted as warranting further exploration.
Late in 2012, the dispute over the Vickers Target claims was settled and the drill rig was moved in. Results showed that these were among the best exploration drill holes in Canada in recent memory. Additional drilling was completed at the Vickers Target in 2013 and more good results were published to the market.
An infusion of cash from international gold producer Nordgold brought some much-needed investment to institute a very meaningful program in the Vickers Target in the field season of 2014, which is currently ongoing.
“From here, we need about $20 to $30 million to delineate the Vickers Target to see just how big the deposit is and to drill the very promising Sako, Bazooka, and Defender Zones that we have discovered since purchasing the property,” explains North.
And the additional good news is that unlike the Meadowbank Mine and Meliadine Gold Mine Project, the Pistol Bay Gold Project is located on Crown land. Regardless, North speaks of a positive relationship with the Hamlet of Whale Cove and its community of 350 people.
“We have hired more than 10 people from Whale Cove for the summer,” he states, adding that the Pistol Bay Gold Mine Project is located within 10 kilometres of the community. “We have received very good support from the community and hope to contribute to its economic prosperity in the years ahead.”
And according to North, that could be as early as 2019.
“I believe that in five years time, the Pistol Bay Gold Project will be well in the construction stage and possibly even in production,” he states. “It could well be a world-class gold deposit.”