Midas Gold (TSX: MAX) Hits Over One Hundred Meters of High Grade Gold and Antimony, Drilling Restarts
Gerardo: This is Gerardo Del Real with Resource Stock Digest. Joining me this morning is president and CEO of Midas Gold (TSX: MAX)(OTC: MDRPF), Mr. Stephen Quin, Stephen thank you for taking time to join us this morning.
Stephen: Thank you Gerardo and thank you for having me on.
Gerardo: I wanted to have you on because you are drilling once again and you had some important news this morning. The headline reads “Midas Gold Resumes Resource Optimization Drilling at It's Stibnite Gold Project in Idaho.” Just to recap there are a couple of intercepts that are just really impressive. Hole 415 hit 42.7 meters of 3.12 grams per tonne gold, 10.7 grams per tonne silver, and .49% antimony which equates to about a 4.2 grams per tonne gold equivalent grade. And then you also had 122.5 meters of 2.21 grams per tonne, 8 grams per tonne silver and .46% antimony which equates to about 122.5 meters of 3.2 grams per tonne gold equivalent, starting from surface. Can you share some of the details of this mornings release and if possible I would love to get your take on the drilling that just commenced again at Stibnite.
Stephen: Sure, happy to Gerardo. This is part of the ongoing program that we started in Q4 last year. It basically has three objectives. One is to convert inferred resources to indicated so that we can use them in a feasibility study. The second is to add new resources within and around the reserve pits. We are not looking to add outside of the known deposits but in and around them. Thirdly is to derisk some areas where there is not that much Midas Gold data that is driving the resource in those areas, and so get all of this done so that it feeds into the feasibility study.
There are many areas where we can do that kind of thing but drilling is really focused on areas which have nearer term potential to impact the economics of the project. We put out some results today which is I think the third or fourth news release that we put out on the drill program. As you mentioned the results are very positive. They essentially achieved all three of those goals of adding resources, derisking the resource that was there and converting inferred to indicated.
The results in the holes that we announced today were one hole from the southern end of the deposit where there was some 1940's drilling, which was sufficient to call some areas inferred or didn't even make resource. Because it was inferred you can't use it in the prefeasibility study that we published back in December 2014, and definitely can't use it in the feasibility study that we are working on now.
We did the drill hole there to see if that zone of higher grade mineralization was real. Did it have continuity? Could we confirm it? As you mentioned the results were very impressive. We had essentially 43 meters of 4.2 grams gold equivalent, which is dominated by gold as always but it was some pretty significant antimony credits. About half a percent antimony and that adds a value of about a gram a tonne gold to the intercept, so it's very significant.
Obviously that area has more potential. Now we know it's real and there is more drilling to be done in that area to confirm and add to the resource in that area. The second hole that we drilled at number 417 was drilled in the center of the Yellow Pine deposit. This is an area where you really are looking to derisk the resource. Relatively shallow areas of the deposit that are under a pit lake area that is filled with water has seen limited drilling by Midas Gold. We have been doing some drilling very close to the bottom of that pit lake to confirm the historic result.
In this case the historic is much more recent. We are talking usually 1980's, 1990's data. Much more modern data. Some of it drilled by Barrick and others. We completed a hole there and that had 122 meters of 3.2 grams gold equivalent. Again, dominated by gold but with significant antimony credits.
These are doing what we want. They are adding resources. They are converting inferred to indicated. And they are confirming that older drilling, wether it be 1940's drilling or wether it be 80's, 90's drilling and making us a lot more confident as we move to feasibility study. Very positive results and just building off of the positive results we had since we started announcing the results from the drill program last year.
Gerardo: Excellent Steven. Would it be fair to say that the grades that you are getting back from the drill results are higher than anticipated? We had spoken before and obviously there was a lot of historic drilling but some of the grades coming out of the program are really really impressive Stephen.
Stephen: Yes and that has been a trend we've seen, particularly in the less well-drilled areas where there is a preponderance of historic data as opposed to Midas data. Particularly at the south end and the north end which are the less well drilled parts of the deposits we've seen grades that are typically 2 or 3 times what was indicated by that older drilling. The obvious question is why are you seeing significantly higher grades. A lot of it is just that we are having much longer samples because we are using much larger core, much better quality drilling, much higher recovery than you typically saw in historic drilling. We are just getting a better sample and definitely seeing much better grades. Typically 2 to 3 times what we saw in the past.
Gerardo: Right. I know one of the additional objectives was to improve the confidence in the antimony mineralization. Can you speak to that a bit and how you feel that is coming along and what the plan is in 2017. Will there be more drilling targeting that?
Stephen: Certainly. The antimony side is overall a modest contribution to the project economics. It's worth about 5% of the cash flow of the life of mine of the project. In portions of the deposit and particularly Yellow Pine and Hangar Flats deposits it can be quite a significant contribution to the economics, worth as much as 25% of the value of the rock. The challenge with the antimony side is a lot of the older drilling was not assayed for antimony and that core is no longer available, so you are not able to demonstrate continuity of the antimony mineralization so you have wider spaced holes just because you are dependent on primarily the Midas drilling.
Getting this additional drilling should demonstrate greatly continuity and we are definitely seeing that kind of result.
Gerardo: Excellent, and you are drilling now, is that correct?
Stephen: Yeah, we just started drilling last week. We finished the second hole and we are on to the third hole as of today. We are going to be drilling potentially another 2 or 3 holes in the Yellow Pine deposit which will primarily focus on the central portion of the deposit. Then we will take a break because there has been a lot of snow and the next area to drill, the Hangar Flats deposit is on a steep side hill. From a safety perspective you don't want people on a steep side hill with a lot of snow around because of avalanche risk. We'll complete the Yellow Pine drilling and then we'll take a break and once the snow is gone start drilling Hangar Flats.
Gerardo: Wonderful. Stephen, congrats on the success thus far with the drilling program. I know that everybody has got to be happy with the results that you are getting back. Hopefully we can have you back on as soon as the remaining assays are announced. That would be fantastic.
Stephen: That would be great Gerardo.
Gerardo: All right Stephen thank you very much.