Nighthawk Gold (TSX: NHK; US-OTC: MIMZF) hopes to develop Canada’s next gold camp at its 100%-owned Indin Lake gold project in the Northwest Territories, about 220 km north of Yellowknife, says Keyvan Salehi, the company’s president and CEO.
The property has “the right land position and geological setting and structures to host significant gold deposits and has the potential to become a major gold-producing area,” he says, estimating that at 930 sq. km, Nighthawk’s Indin Lake project is roughly three times the size of Ontario’s Timmins gold camp.
Indin Lake contains two advanced exploration target areas: Colomac Centre, located in the north-central portion of the property, which contains five deposits (Colomac Main, Goldcrest, Grizzly Bear, 24, and 27); and Damoti Lake, about 40 km south of Colomac, which hosts one deposit (Damoti).
There are also several early-stage exploration targets within a 15-km radius of Colomac Centre, including JPK (7 km to the north), Laurie Lake (5 km north), Albatross (10 km southwest), and Andy Lake (15 km south). Its Fishhook target sits about 14 km south of Damoti Lake.
Earlier this month, the company released the final drill results from its 2020 exploration program. Highlights included drillhole C20-07, which was drilled at Colomac Centre and returned 32.7 metres grading 3 grams starting from 569.10 metres; hole C20-17, which cut 4.3 metres of 12.36 grams gold from 254.85 metres; and hole C20-19, which cut 64.1 metres of 1.03 grams gold from 414 metres. Results from drilling its Treasure Island target, included hole T20-09, which returned a 5.50 metre intercept of 207.18 grams gold from 264.60 metres, including 0.5 metres of 2,260 grams gold.
While the results from Colomac show the potential to grow the mineral resources at depth, according to Salehi, the junior has shifted its exploration strategy to focus on expanding and delineating near-surface mineralisation. The new strategy will seek to capture the “cheap ounces,” says Salehi, who joined Nighthawk in January and has over 20 years of experience across operational and corporate development roles at various companies, including Kirkland Lake Gold(TSX: KL; NYSE: KL; ASX: KLA), Lake Shore Gold, and Vale (NYSE: VALE). Immediately prior to joining Nighthawk he served as president of corporate development and technical services with Mountain Province Diamonds (TSX: MPVD; US-OTC: MPVD) from 2019 to 2020.
Nighthawk estimates it controls more than 90% of the Indin Lake greenstone belt. In February it signed an option agreement with Geomark Exploration to earn a 100% stake in the Kim and Cass property. The property, about 15 km southwest of Colomac, contains the historic Cass and Kim zones.
“The best way to deliver value for shareholders over the next couple of years is to primarily focus our exploration on increasing the near-surface pit-constrained resources both at Colomac along strike and at the Kim and Cass zones, and our grassroots targets,” he said.
An updated resource estimate in March for Indin Lake demonstrated a 35% increase in indicated resources (with a 71% increase in indicated pit-constrained resources) and a 60% increase in inferred resources. The project now contains 38.7 million indicated tonnes grading 1.81 grams gold per tonne for 2.2 million oz. contained gold and inferred resources of 11.5 million tonnes grading 2.13 grams gold for 786,100 ounces.
Since acquiring the project for $5 million in 2011, the company has drilled over 185,000 metres, 80%-90% of which has focused on Colomac.
Nighthawk plans to conduct an additional 200,000 metres over the next two years. This year it plans to drill 75,000-80,000 metres, mainly focused on the Kim and Cass zones, and has three drill rigs turning. It plans to increase that number to five before the end of April.
“Even though there is a long history of exploration of the area, the property remains vastly underexplored,” says Salehi.
Salehi’s three objectives are to expand the current in-pit resources at all five deposits at Colomac; drill test a series of grassroots targets, with priority given to the near-surface, high-grade targets within a 15-km radius of Colomac; and assess other targets including the Kim and Cass zones, the Albatross prospect, and targets such as Leta Arm (20 km south of Colomac) and Treasure Island (14 km north of Colomac).
“We expect to complete the Phase I drill program by the end of July, with around 45,000 metres of drilling,” says Salehi. “Around half of the drilling will focus on resource expansion targets, with the other half on the greenfield targets.”
In early April Nighthawk raised $10.95 million in a bought deal financing and Salehi says the company now has about $16 million in the treasury, which “will be more than enough to fund this year’s drilling campaign.”
Salehi notes that in addition to its geological setting, the Indin Lake project also benefits from an onsite airstrip that provides year-round access and a 245-km-long ice road that provides land access during the winter season. Although there is no power line to the site, the Snare River hydroelectric power station is about 110 km to the southwest.
A 97-km-long all-season road currently under construction, will connect the property with Highway 3 west of Yellowknife. The road is expected to be finished later this year. The road is funded through a public-private partnership, with the federal government providing 25% of the capital costs. The Northwest Territories government, which is working in partnership with the Tlicho Government to advance the transportation infrastructure project, is providing the remaining funds.
“The territorial government and local First Nations are very supportive of the mining industry,” says Salehi. “Also, Yellowknife is a key hub for all the technical expertise you would need to develop a project. So, it’s a great jurisdiction to have a mining operation located in.”
Significant shareholders include Northfield Capital, which holds a 20% stake in the company; Kinross Gold (TSX: K; NYSE: KGC) with a 10% interest; Osisko Development (TSXV: ODV) with a 9% stake. Management and directors own 5% of the company.
At presstime in Toronto, Nighthawk was trading at $1.21 per share within a 52-week range of 97¢ and $2.90.
Pierre Vaillancourt of Haywood Securities has a buy rating on the company and a 12-month price target of $3.50 per share.
“The share price performance has trended down since last July, and the stock is off 28% year-on-year,” the analyst wrote in a research report on April 9. “However, we believe that with the recent acquisitions along with the start of a program to develop higher grade open pittable resources, the stock will reflect attractive new potential and better economics for Colomac and satellite deposits.”