Historical Mining Area to be Revitalized
The quality of an outstanding CEO is demonstrated, among other things, by their ability to recognize opportunities and dare to do things that others simply lack the imagination for. This may temporarily come at the price of standing quite alone. This description fits quite accurately to Gold Terra’s CEO, Gerald Panneton (67 years old), and his current endeavor. Hardly any other junior explorer would have dared to drill a hole to a depth of 3,002 meters.
This innovative drill hole (GTCM24-056) from the recently concluded year 2024 was the deepest hole ever drilled on the grounds of Newmont’s historic Con Mine near Yellowknife. The business plan of Gold Terra Resource (TSX.V: YGT, FSE: TX0, WKN: A2P0BS) is simple: define 2 million ounces of very high-grade gold through offshoots from the existing main borehole and then acquire Newmont’s former Con Mine, including the historical resource of 650,000 ounces at 11 g/t gold. With its 2021/2022 drilling program, the company has already identified a near-surface total resource of 542,000 ounces at approximately 8 g/t (MRE September 2022).
The Goal: Revitalizing a Historical Mining Area
Panneton is convinced that there is much more gold along the Campbell Shear Zone, both in the continuation of the old mine and in the immediate vicinity. In short, it’s about revitalizing a historical mining camp with all the associated advantages: good infrastructure, simple permitting processes (after 2003, the mine was completely dismantled except for very important infrastructure such as tailings ponds, roads, electricity, trenches, office buildings, etc.) and trained workforce. Gold Terra has already reached a resource of 542,000 ounces with the option on the Con Mine (CMO), leaving 75% of their self-set minimum target still to be achieved. The target zone for the wedge drilling will be the mineralization below the existing Robertson Shaft, which extends to about 1900 meters. From its main borehole, the company plans to test the continuation of the dipping, high-grade Campbell Shear Zone, in the upper part of which Newmont mined approximately 6 million ounces of Gold with average grades of 16-20 g/t gold between 1938 and 2003.
Figure 1: The Robertson Shaft was built in the 1970s. It is a reinforced concrete shaft with a depth of 1,900 meters. To realize such a shaft today would probably cost around 200 million dollars – here one can safely speak of ‘sunk cost’.
Figure 2: View of the former Con Mine, which Gold Terra can acquire from Newmont.
How does a junior exploration company come up with the idea of drilling a 3,000-meter deep hole and branching off drill wedges from it? Don’t all other exploration companies want exactly the opposite? Namely, to find high gold grades as close to the surface as possible? But let’s take it step by step: Gerald Panneton has already written a success story with Detour Gold between 2006 and 2013, based on the consistent pursuit of a vision that initially few believed in. At that time, it was about reinventing the historical Detour mining camp by converting former high-grade underground projects into a massive open-pit mine. In just six years, Panneton increased Detour Lake’s resource base to 30 million ounces, while raising CAD 2.6 billion in capital and building a mine within 26 months. The gold price was at USD 650 when the journey began! In 2018, Detour Gold was eventually sold to Kirkland Lake and then to Agnico Eagle for CAD 4.9 billion. To this day, this mine remains the largest gold producer in Canada and one of Agnico’s flagship projects.
The Gold Terra project in the Northwest Territories near Yellowknife follows a different logic than Detour Lake, but there are also parallels. Moreover, the gold price is now over $2,600 per ounce. Within or near the more than 900 km² project area that the company has secured, there are five historical gold mines (Mon Mine; Crestaurum Mine, Giant Mine, Ptarmigan Mine, and the previously mentioned Con Mine of Newmont) along a 70-kilometer strip in the known Yellowknife Gold Belt. The common geological denominator of all these projects are the two shear zones, Con and Campbell, of which particularly the latter has already produced 5.1 million ounces with an average grade of 16 g/t. Gold Terra intersected the Campbell Shear Zone in the first drill hole at the end of 2023. The second drill hole, GTCM24-056, (see above) was steeper and is intended to be used in the future for branching with wedge drilling and thus for drilling two million ounces below the Robertson shaft.
Figure 3: Gold Terra’s exploration license is more than 900 km² in size and contains or borders five gold mines. The Crestaurum deposit, 15 km north of the Con Mine, consists of a four to five meter wide quartz vein system with gold grades of 6 g/t Au (six grams per tonne) in open pit mining. Gold Terra believes this project would be a good complement if a new mill were to be built on the Con Mine site.
As someone who discovered two mines for Barrick and handed them over to the company at the beginning of his career, Gerald Panneton naturally has a different perspective than a CEO doing this for the first time. Even at this supposedly early stage, he has a clear vision of what a future production scenario might look like. He estimates it would take about three years to complete the drilling, supported by a pre-feasibility study, to acquire Newmont’s Con Mine. After completing the permitting processes, it would take 12 to 18 months to build a new mill with a capacity of 2000 tonnes per day (tpd) and use the near-surface mineralization to start mining operations while continuing drilling at depth. However, this is not something that needs to be done immediately, as Panneton estimates that Gold Terra could already mine between half a million and a million ounces near the surface, which could enable early cash flow.
For example, a PEA that would combine the historical mine and satellite deposits could be conceivable. In a scenario with 2,000 tonnes per day, about 1,000 tonnes would likely come from the Con Mine and 1,000 tonnes from one of the satellite mines north of the city. That could bring in 150,000 ounces per year for the first five, six, seven years. Panneton’s conclusion: ‘With a gold price of over $2,600, we are in a very fortunate situation.’
Conclusion: Even with a gold price of over $2,600 per ounce, financing junior explorers is (still) not a sure thing. On the contrary: Even an old hand like Gerald Panneton has to fight hard for money despite his success story, although he already counts important institutions and industry giants like Eric Sprott among his shareholders. At least the company was able to raise around 2.4 million CAD in fresh funds at the end of 2024. Of course, the availability of money determines the pace. Panneton is convinced that with the right amount of money, Gold Terra can prove more than 5 million ounces of gold. What backs this statement so far is primarily years of experience. The Con Mine would be the fourth mine that Panneton has brought into production in his career.
