Trade Winds Ventures Inc TSXV:TWD in joint venture with Detour Gold Corp TSX:DGC announced results from their Block A Project in northeastern Ontario. Highlights include 7.18 g/t gold over 8.9 metres (including 62.5 g/t over 0.7 metres), 3.08 g/t over 20.8 metres (including 20.69 g/t over 1 metre), 11.12 g/t over 5 metres (including 49 g/t over 1 metre) and 10.34 g/t over 3.9 metres (including 39.6 g/t over 0.8 metres).
The two companies each hold a 50% interest in Block A, with Trade Winds acting as project operator. Block A has a 2010 in-pit resource estimate of 1.92 million gold ounces indicated and 762,000 gold ounces inferred for a total of 2.69 million gold ounces, at a base case of $1,000 per ounce.
Trade Winds President/CEO Ian Lambert tells ResourceClips.com, “In the first half of 2011 we drilled 30,000 metres, 75% of which was in the current pit shell and the remaining 23 to 25% outside, mostly exploring to the west, north and south of the pit area. The results we published this week include drilling to the south and the west. A total of 16 holes were outside the existing pit shell. The balance was within the pit shell. The results that we’ve received from all the assays are very consistent with the previous experience we’ve had. In other words, any time we drill a hole into the pit area in a previously undrilled section, we’re finding the same sort of mineralization that we’ve experienced in the other holes that surround the new hole. So there are no big surprises for us. It’s all very consistent; it’s all going to add new ounces to the resource total. We’ll be updating our resource estimate at the end of the year.
“We’re very encouraged by the results because they’re continuing to confirm that the mineralization is prevalent throughout the existing pit shell,” he says.
On completion of the feasibility study, Detour has an option to elect to be operator. Now that would make eminent sense to us because they’ll already be running their operation next door—Ian Lambert
“We’re embarking on a further 20,000-metre drilling program, and in addition we’re going to be processing up to 10,000 metres of core that we previously drilled that hadn’t been sampled. So we’ll be adding the 30,000 metres from the first half of the year, and the 30,000 metres from the second, to the resource update at the end of the year. That represents almost 50% of what we’ve done to date. In one year we’ve increased our data by 50%. Virtually every hole that we’ve drilled is in an area that doesn’t currently contain a resource. So we’re expecting that this will add incremental ounces in the inferred and perhaps the indicated category for most of the results.
“We hope to be able to schedule the preliminary economic assessment for early next year,” Lambert adds. “The work we’re doing should give us sufficient data for the resource update and to calculate the new pit shell based on that update. We anticipate that this will be the point where we can undertake a PEA to evaluate the strategies to put it into production.
Lambert explains, “That would mean evaluating a couple of scenarios. One possibility would be to build a standalone pit on Block A, which is the block that all this mineralization is on. Block A is a 50/50 joint venture between Trade Winds and Detour Gold, where Trade Winds serves as the operator on the exploration project.
“The other possibility would be that Detour Gold may wish to process the ore in an expanded facility that they’re already constructing to process ore from their pit directly adjacent to the east of our property. Their property will go into production by the beginning of 2013. We will evaluate whether or not we could process our ore in their facility, if they were to expand it. Otherwise we’ll build our own facility.
“We believe that 2016 production is an achievable target,” he says. “It obviously depends on a host of things—that the price of gold stays above $1,000, the permitting is available, the benefit agreements can be done with the aboriginals and so on. But 2016 is a target we believe is attainable. It gives us three years of drilling, including this year. It gives us time to do a preliminary economic assessment, a prefeasibility study the following year and the year after that a feasibility study. It then allows us a year to complete permitting and for construction. And all the time we’ll be doing the environmental impact work as well.
“On completion of the feasibility study, Detour has an option to elect to be operator. Now that would make eminent sense to us because they’ll already be running their operation next door. The majority of their staff will be mining people, and they’ll certainly have learned to mine and process ore from this region. The rock types are pretty similar between the two properties because it’s just one continuous series of zones. There’s no change of any consequence in the mineralization from one property to the next. Whatever they’ve learned about mining and processing their ore certainly can be applied to our property. So they’ll be very efficient, well staffed and completely up to speed by the time we need to operate our place,” Lambert says.
“So it would make sense for them to become the mine operator. We’re an exploration company; we want to take this to feasibility completion and then hand it over to a capable mining operator. But beyond that, everything will be 50/50 all the way, and both parties will have to pay the respective costs. I don’t think that’s going to change. By the way, nobody has any clawback rights on the other, so nobody can force the other guy to change his position.”
In conclusion, Lambert points out, “Even though the price of gold has gone to the stratosphere, the junior companies haven’t received an upgraded evaluation yet. As advanced-stage projects like ours move closer and closer to feasibility, the difference between what we’re trading at today and what it will be when we get to production is still a huge margin. That provides a lot of upside to an investor, and the downside looks pretty small. We’re so undervalued based on what we’ve already found, let alone the fact that we believe we can highly expand the number of resource ounces and increase the valuation of those ounces as we advance towards production.”
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Trade Winds Ventures Inc
Ian D. Lambert
or Terry McGee
866.698.9187 x 228
Detour Gold Corp
by Greg Klein