Drilling down where a mine was before: Gold Terra banks on former Con Mine

Gold Terra Resource Corp, a junior mining exploration company, is forging ahead with its Yellowknife City Gold Project — and says it's keeping the environment in mind as it does. 

The company is currently drilling in four locations — two sites north of the city in the Mispickle deposit and two sites south of Con Mine. It is the latter, along the Campbell Shear, that has become the main focus of the project. 

"What we need is 2 million ounces [of gold] in one place," said Gerald Panneton, Gold Terra's chairman and CEO.

The company has already found 1.2 million ounces of inferred resources (which, according to Canadian Institute of Mining, is a resource "for which quantity and grade or quality are estimated on the basis of limited geological evidence or sampling") so far in the Mispickle, Sam Otto, Barney and Crestarium deposits north of the city. But, according to Panneton, "none of those four deposits is the core of generating a mine." 

"We think the best chances of finding 2 million ounces is the Campbell Shear, south of the Con Mine," he said. The Campbell Shear produced 5.1 million ounces of gold when Con Mine was up and running. 

Gold Terra drilled 12,687 metres in part of the Campbell Shear south of the mine last year, and it expects to drill 40,000 metres or more this year. 

The company also entered an option to purchase Con Mine from Newmont Corporation last November. The mine closed in 2003 in part because of low gold prices (an ounce of gold is now worth about $2,000 CAD) and is almost done being remediated. 

The option agreement means Gold Terra has to spend $8 million in exploration expenditures over four years, and — if it finds the gold it's looking for and decides to complete the transaction — will need to pay Newmont another $8 million in cash.

Panneton said that won't be hard, because Gold Terra has already spent nearly $4 million on exploration and expects to spend between $5 and 10 million this year. 

The company also agreed to other fiscal, regulatory and reclamation responsibilities. 

'1,000 per cent' responsible for environment

Panneton said the carbon footprint of the exploration work is not that big — but the company is working to reduce it in the way it accesses its drill sites. 

He said the sites north of Yellowknife are only accessible by ice road or by air, so the company does its drilling in the winter to reduce the use of helicopters and jet fuel. 

Panneton said the company does use helicopters to drill south of Con Mine when there are no ice roads, but that it's looking into building a permanent road so it can use trucks instead. 

Eric Hebert, one of the project's geologists and Aaron Doan, a drill manager, both said the rules they have to follow to protect the environment during exploration are strict in the N.W.T. 

"We try to put the drill where there's less trees to cut, or even no trees to cut," said Hebert, noting that they also try to use existing access roads where possible. 

Panneton said Gold Terra has "1,000 per cent" responsibility to reduce its environmental impact, and one of the big questions moving forward — if a mine is rebuilt — would be where it would get its power.

"The best green electricity to use is the Bluefish Dam," said Panneton. A feasibility study, which will happen if Gold Terra finds its 2 million ounces of gold, will assess how much power a mine would need, he said. 

He also said there's "no question" it would be better off using electricity and batteries for underground operations, instead of diesel, because of the risk of carbon monoxide poisoning. 

"Mining is not without an imprint, it's not without disturbance, but you can minimize it as best as you can," he said. 

Feasibility study may start 'next year'

Joe Campbell, the founder and chief operating officer of Gold Terra, said he was "quite confident" the company would be able to start a feasibility study "in the next year" — and that it would take about a year to complete. 

If a mine is viable, he said, the next step would be to enter a years-long permitting process followed by a roughly two-year construction period. 

"From a point of view of economics for the city, the construction period is going to be just as viable an economic activity as the actual mine itself," he said. 

Panneton said if Gold Terra turned Yellowknife into a gold mining jurisdiction again, it would be "very valuable" for both stakeholders and residents. He said it would create between 100 and 200 jobs for 10 to 15 years.