Thursday 31st July 2014

Resource Clips


Going Underground

PC Gold’s Pickle Crow Mine Will Produce Again in 2016

By Ted Niles

PC Gold TSX:PKL aims to have its Pickle Crow gold property producing by 2016. “I don’t see a [resource update] happening much before we get up into the proven and probable [category],” interim President/CEO JP Chauvin declares. “We’re looking at coming up with a means to do a feasibility study, and we hope to have the whole Phase 1 project completed in about two years’ time, which includes a period of time for financing. After the feasibility study, we’re looking at another year and a half to two years again in order to bring it into production.”

Located 400 kilometres northwest of Thunder Bay, Ontario, the 4,117-hectare Pickle Crow gold mine produced 1.47 million ounces of gold and 168,757 ounces of silver between 1935 and 1966. The mine has acquired something of a legendary reputation for having earned shareholders, at the height of the Great Depression, a dividend after only 11 months of production. Recognizing, as have so many other juniors, what a high gold price means for old mines, PC Gold acquired Pickle Crow in 2008.

PC Gold's Pickle Crow Mine Will Produce Again in 2016

Based on 87,800 metres of historical drilling and 39,134 metres of confirmation and exploration drilling, the company announced April 2011 an inferred NI 43-101 resource estimate of 1.26 million ounces. The focus of the Fall 2011 drill campaign was to expand the open-pit resource. Chauvin explains, “[The program] was done this way mostly because it was super flow-through money (which is only eligible for greenfields exploration) from the last financing, so it had to be spent from surface. So it’s all shallow drilling. It was decided to focus near surface and see if we could expand the resources around the open pits.”

Results of the Core Mine trend released February 7 include:

  • 0.98 grams per tonne gold over 40.5 metres (including 12.83 g/t over 0.8 metres)
  • 0.53 g/t over 44.5 metres (including 1.28 g/t over 9 metres)

January 3 results of the Core Mine trend include:

  • 2.33 g/t gold over 28.5 metres (including 8.96 g/t over 3 metres)
  • 0.95 g/t over 43.4 metres (including 13.05 g/t over 1.5 metres)
  • 2.54 g/t over 10 metres (including 5.72 g/t over 2 metres)
  • 4.25 g/t over 3 metres (including 7.04 g/t over 1 metre)

Chauvin admits that the results aren’t “stellar”; he points out, however, that only 126,000 ounces of the Pickle Crow resource is contained in the open pits. All told, the Pickle Crow resource has an average grade of 3.9 g/t gold, but the 1.1 million ounces residing underground have an average grade of 5.4 g/t (itself containing 600,000 ounces at an average grade of 9.3 g/t). This high-grade potential was hinted at most recently with a January 11 assay from the No. 22 vein of 444.38 g/t gold over 1.5 metres.

The market currently values the Pickle Crow resource at about $16 an ounce. Chauvin describes this as “kind of ludicrous.” He believes management’s focus now should be to upgrade the underground resource in order to give the property a valuation more in tune with its potential. “There are four shafts on the property,” Chauvin reports. “Two are from surface, and there’s an underground shaft that goes from 2,000 metres to 3,800 metres. Our intention is not to do all three but just to refurbish the No. 1 shaft, which is a very small shaft—we’re looking at 3-tonne skips—and go down to 3,000 and drill the inferred resource to a better category.”

Our current plan is to try to raise the funds necessary to be able to go underground and move the resource up to a proven and probable category in order to complete a feasibility study —JP Chauvin

He continues, “Our current plan is to try to raise the funds necessary to be able to go underground and move the resource up to a proven and probable category in order to complete a feasibility study. But it requires a fair bit of work because we need a shaft rehabilitated, a new headframe, a new hoist room and then to dewater to get to where we need to be to drill it underground. There’s a significant capital requirement because of the infrastructure that’s required. We’ll embark on this fairly quickly, and we are in the process of making sure we get all the permits in place and that type of thing.”

Chauvin concludes, “Prior to taking the role of interim President and CEO, I was the chairman of the technical committee, and I intend to see this [project] through. I look at it from the perspective that I can set the course for the company and help select a new CEO and work very closely with them as the chairman of the technical committee, and I’ve got support from the board in exactly that.”

At press time, PC Gold had 66.8 million shares trading at $0.30 per share for a market cap of $20 million.

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