A year ago Russell Starr was senior vice president of corporate finance at Auryn Resources (now Fury Gold Mines) and slated to take charge of its Peruvian assets in a spin-out called Tier One Silver, when he heard about the Newman Todd gold project in the Red Lake district of northwestern Ontario. (The project is about 20 km west of the Red Lake gold mine complex, which Evolution Mining (ASX: EVN) acquired in November 2019.)
A broker at PI Financial, a private independent dealer, showed Starr some of the historic drill results from the roughly 60,000 metres (165 holes) the project’s joint-venture owners (Confederation Minerals and RedStar) had drilled between 2010 and 2013, and his career veered in a whole new direction.
Highlights included 681 grams gold per tonne over half a metre starting from 332.50 metres downhole (drillhole NT-114); 10 metres of 7.43 grams gold from 63 metres downhole (NT-162); 16 metres of 8.63 grams gold starting from 197 metres (NT-056); 2.3 metres of 89.86 grams gold from 251.7 meters (NT-083) and 1 metre of 139 grams gold starting from 304 metres downhole (NT-108). About 41% of the holes intersected more than 10 grams gold per tonne and none of the previous drilling have gone deeper than about 400 metres.
“They were world-class intercepts in anyone’s world,” Starr recalls, “basically every second hole hit high-grade, it was just too good an opportunity to pass up.”
Starr left Auryn in July to join Confederation Minerals, renamed Trillium Gold (TSXV: TGM; US-OTC: TGLDF), and “put a big chunk of change into it.” (Management and insiders own about 40% of the company.)
One of the first things he did as CEO was increase Trillium’s ownership in Newman Todd from 83.5% to 100%. He then started picking up other projects in the area, expanding the company’s reach in the Red Lake district to 55,000 hectares — the second-largest landholder in the camp after Evolution Mining.
“We went on a buying spree,” Starr says. “Red Lake is cut up into little puny companies that are never going to move the needle for a major. In my view to move the need for a major you need a district-scale package and hence we bought a lot of the Confederation belt.”
In August, Trillium Gold acquired an 80% stake in the Gold Centre property from Rupert Resources (TSXV: RUP). Gold Centre sits 1 km to the southeast of the headframe of the Red Lake mine and part of the property lies just 350 metres from where Evolution Mining is drilling underground, Starr says, adding that the property has never been drilled.
“We think it’s part of the Red Lake mine,” he says. “We firmly believe that in the future Evolution will want that … but we have to drill it first.”
The same month, Trillium picked up the Rivard property, to the southwest and contiguous to Newman Todd, and where the Rivard family has been selectively sampling gold from trenches and pits on the property for more than 30 years. The Rivard family optioned the property to Rubicon Minerals (now Battle North Gold) in 2003-2004 and the company drilled 22 holes, reporting highlights of 13.16 grams gold over 9 metres and 20.93 grams gold over 1 metre.
Starr believes Trillium Gold has some of the best exploration assets in the district.
“We have two very near-term production possibilities at Newman Todd and Rivard, and Gold Centre, and then we have a world-class exploration portfolio,” he says, which includes the Leo property, 35 km southeast of Red Lake and about 15 km south of Great Bear Resources’ (TSXV: GBR; US-OTC: GTBAF) flagship Dixie project. But the market doesn’t see that yet, he says. “We’re getting marginal valuation for Newman Todd or Gold Centre, and zero valuation for any of our exploration projects, which rival or are better than anyone else’s in the Red Lake area.”
“Everybody says their properties are fantastic, but we’re the only ones that have the balls to go out and do a dominant land package and then grow it,” he says.
Starr noted that in 2013, when Confederation Minerals owned 50% of the Newman Todd project and spot gold was about US$1,200 to US$1,300 per oz., the company had a market cap of $200 million, and yet today, with gold at US$1,700 per oz. gold, the company’s market cap sits at $38.6 million (32.7 million common shares outstanding at $1.18 per share).
“Where is the disconnect? Well it’s in the investors. No one is paying attention to gold.”
You wouldn’t know it by all the activity in the Red Lake area, he says. Pure Gold Mining (TSXV: PGM) poured first gold from its PureGold mine on December 30, Great Bear Resources continues to regularly release high-grade intercepts from its Dixie project, and Evolution Mining recently announced it is acquiring Battle North Gold (TSX: BNAU; US-OTC: BNAUF) and its Bateman gold project.
“As crappy as junior mining is right now, Red Lake is absolutely booming,” Starr says. “It’s hard to get drill rigs, it’s hard to find people, virtually impossible to get a core shack, so it’s almost a complete disconnect between investors and the actual gold market.”
“Over the last quarter or two quarters, Red Lake has gone from mildly busy to almost impossibly busy right now,” he continues. “And all you need to do is look at Evolution buying Battle North. Everyone speculates that it was done largely for tax losses, but in my opinion it was equally important to get access to another mill. I think it was also because Evolution recognized that the future in Red Lake isn’t going to be 15 grams gold per tonne. Like everywhere else in the world the high grade is much harder to find and with lower grade you are going to need to put a lot more rock though mills, and likely the additional mill will be helpful. And of course they picked up all of Battle North’s ounces and exploration properties.”
Starr argues that while the Red Lake mine historically produced more than 25 million oz. at an average grade in excess of 20 grams gold per tonne, “that doesn’t go on forever.”
“Evolution in my opinion is recognizing that the future of Red Lake is lower grade material but that lower grade material would be considered high grade everywhere else. It’s no longer going to be visible gold and massive amounts of high grade going through the mills, it’s going to be lower grade material – between 3 grams and 7 grams gold – but still producing a lot of gold.”
As for Trillium Gold, Starr is confident that it’s only a matter of time — and more drilling — before the junior explorer becomes a producer.
Results from the 10,000 metres Trillium Gold has completed since he joined the company continue to demonstrate the project’s potential, he says. In October the company reported assays from Newman Todd of 15.41 grams gold over 7.05 metres starting at 226 metres downhole (drill hole NT20-169); and 8.63 grams gold over 6.55 metres from 311.2 metres (NT20-167). Highlights released in January included visible gold in three of five holes, including a 5 cm quartz vein with visible gold in the quartz sulphide breccia unit at a shallow depth of 45.9 metres assaying 124.66 grams gold over 0.24 metres (NT20-174).
This year the company plans to drill about 40,000-50,000 metres with three rigs across Newman Todd, Rivard, and Gold Centre. It received drill permits for Gold Centre in February and is planning 8,000 metres there to show that the mineralization at the Red Lake mine continues onto its Gold Centre ground.
At Newman Todd Trillium expects to drill test a 350-metre gap zone between surface mineralization and mineralization at depth and will also undertake more step-out drilling and testing for parallel stacked structures and cross structures, as well as targeting high-grade at depths of more than 400 metres. The company also plans to complete a ground magnetic survey to better understand structural controls and continuation of mineralized features; and mapping and surface sampling to define new geological targets.
“It’s pretty obvious Newman Todd is going to be a mine,” he says. “And it’s pretty clear to me that Great Bear’s Dixie will be a mine, and I would be shocked if we don’t find another world-class discovery on the package we have.”