VANCOUVER — Ten years of developing and permitting new technology, staking ground, flying surveys, mapping, sampling, and finally, identifying drill targets, is paying off for Garibaldi Resources (TSXV: GGI; US-OTC: GGIFF): it has hit a near-surface intercept of 2,010 grams silver per tonne over 7 metres in the first hole to test the Silver Eagle target at the company’s Rodadero North project in Sonora state, Mexico.
Garibaldi staked the Rodadero project based on the results of hyperspectral remote-sensing surveys, which maps mineralogy based on spectral signatures. It is a well-established technique in the exploration world, but the basic version only sees 12 wavelengths. That only outlines basic structures.
Garibaldi took the technique to the next level through a partnership with satellite data provider MacDonald Dettwiler.
“They said to us, ‘We’ve got this hyperspectral spectrometer, so you can take those 12 bands and expand it out to 127 bands, and look at the specific mineralogical units,’” said Steve Regoci, president and CEO of Garibaldi, in an interview. It took more than two years to put the concept into action because of design requirements and cross-border permitting, but in 2008 Garibaldi got out and overflew swaths of Mexico in areas it thought were prospective.
“In an arid place like Mexico, in the hottest time of the year when all the vegetation dies, you’re looking right down at the surface and every single mineral known to man has a certain exact spectra — it’s just like a barcode at the supermarket,” Regoci said.
Based on those barcodes, Garibaldi initially staked 3,000 sq. km of ground, including the 540 sq. km Rodadero North property. Through more surveying and on-the-ground prospecting, Garibaldi gradually cut Rodadero North down to 68 sq. km. More importantly, the company identified eight high-priority exploration targets on the new property.
Then it came time to test targets, or “eliminate” targets, as Regoci puts it.
“Silver Eagle definitely wasn’t our best target, but it happened to be road accessible, so it was the cheapest to go and eliminate,” Regoci said. “But it didn’t really eliminate itself. So we started a second hole that we’re going to re-enter after we get some hydraulics refurbished on the drill rig. You don’t walk away from an intersection like that.”
Garibaldi’s targeting system also led to good intercepts in the first drill holes at its La Patilla project, in Sinaloa state. Five of six holes spread along 75 metres of prospective strike at La Patilla returned gold. The best intercept rang in at 30 metres grading 3.1 grams gold, starting 11 metres downhole and including 8.5 metres of 10.4 grams gold.
Garibaldi is also preparing for a first-pass drill program at its Iris project in Chihuahua state.
But Mexico is one half of the Garibaldi story. The other is closer to its head office in Vancouver: exploring properties in the Sheslay Valley, west of Dease Lake in northwest B.C.
“In B.C. we just really liked these properties — we liked the geology and the location,” Regoci said. “A couple of times we thought we might lose them but we just kept our feet moving, and now the time for this area has come. This is a brand-new emerging mining camp.”
Explorers have long poked and prodded about in the Sheslay Valley, but interest in the area really ramped up in mid-2013, when Prosper Gold (TSXV: PGX) signed a deal to earn an 80% stake in the Sheslay project from Firesteel Resources (TSXV: FTR). Prosper is the new vehicle for the team that discovered the Blackwater gold deposit in south-central B.C. For that discovery their company, Richfield Ventures, attracted a $500-million takeover from New Gold (TSX: NGD).
“That management group — they’re highly respected guys — they came up here and said: ‘OK, we’ve looked for three years globally and this is the best project we could get bang for our buck,’” Regoci said. Prosper has only drilled twin holes to confirm earlier results, but intercepts like 334 metres grading 0.35% copper, 0.11 gram gold and 0.84 gram silver have attracted market attention.
Prosper’s ground borders Garibaldi’s project to the north. Northeast is Doubleview Capital’s (TSXV: DBV) Hat project, where one of the first holes returned 313 metres grading 0.22% copper, 0.18 gram gold and 0.85 gram silver.
Garibaldi’s ground already hosts known porphyry occurrences at Grizzly West in its west end, and in recent weeks the company identified the West Kaketsa porphyry zone 3 km south.
“What’s happening is that we are all establishing this porphyry corridor here,” Regoci said. “I think this whole area is going to take off. Galore Creek is nearby, and it is something like 18 separate porphyries.”
Unlike Galore Creek — the nearby Teck Resources (TSX: TCK.B; NYSE: TCK) project that hosts one of the world’s largest undeveloped copper–gold–silver deposits — Sheslay Valley offers reasonable access and weather. Garibaldi is in talks with Prosper and Doubleview about rehabilitating an old road that runs right into the area.
Garibaldi plans to spend the next few months completing a first sweep of the 262 sq. km Grizzly property. The company is permitting 14 fly camps to support a 60-day mapping and sampling campaign. Once that is done Regoci hopes to have identified clear drill targets before the fourth quarter.
Garibaldi has just enough money to fund its plans. It has less than $1 million in the bank, but 1.5 million shares of Paramount Gold and Silver (TSX: PZG; NYSE-MKT: PZG) — part of a payment from Paramount for the hyperspectral data Garibaldi gathered when it overflew Paramount’s San Miguel project, while flying its own adjacent ground.
“It’s hard to believe it’s been ten years, but a good five years of that was really challenged by the global financial crisis, so survival in itself has been a challenge,” Regoci said. “Luckily, because we did the Paramount deal at the bottom of the market in 2009, we haven’t had to do a financing since 2009, because we can slowly sell that holding.”
Now that the work has generated targets, Regoci is excited for the future.
“Every little target isn’t going to be a deposit, but we’re not in that broad-scale exploration phase anymore,” he said. “These are focused targets, and we’re going to go at it systematically.”
Garibaldi’s share price gained 4¢ on the Rodadero North drill results to close at 26¢. The company has a 52-week trading range of 4¢ to 27¢, and 58 million shares outstanding.
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