It was good to see Banyan Gold Corp. (TSXV:BYN)(OTCQB:BYAGF) intercepting economic mineralization at almost all of their step-out drill holes again at their flagship AurMac gold project in the Yukon. This clearly is testament to the great continuity of the deposits, and makes life easy for management as they are expanding on a 3.99Moz @ 0.60g/t Au Inferred resource. Step-outs have been drilled on a fairly rigorous 100m grid, adding 10-25koz Au on average with each hole, which add up ounces quickly when dozens of holes are being assayed each month. In this article my back-of-the-envelope estimate will attempt to capture the current amount of gold ounces, and as over 100 drill hole assays still have to be released, there is lots of room to grow in my opinion.
In the meantime, inflation doesn’t seem to back down, and although recession seems to be in the cards, markets became slightly more positive as the Ukraine claims an important strategic victory by reclaiming Kherson, the US seems to urge the Ukraine into more diplomacy regarding Russia, and China seemed to loosen their very stringent COVID measures, causing lots of metal prices to jump. Precious metals jumped as well, as the US Dollar weakened on increasing US unemployment rates for October, creating hopes that the Fed could pivot to lesser hawkish rate hikes. In Europe, salary hikes are starting to become mainstream now, creating a salary-price spiral which would fuel further inflation until prices become so high that demand destruction would eventually be the cure for all this.
Banyan Gold recently completed their 2022 drill program, which resulted in 211 drill holes and over 50,000 m of drilling being completed so far.
The amount of higher grade (> 0.65-0.70g/t Au is higher grade oxidized material) intercepts is impressive, as grades regularly surpass 1.00g/t Au which is extremely good for heap leachable ore. A hole like 320 doesn’t come along very often of course, containing 84.4m @ 1.13g/t Au from 22.8m which means the strip ratio there is almost 0.25 : 1 waste to ore. The overall strip ratio for Powerline, which contains the bulk of the current NI43-101 compliant resource (2.9Moz Au) is 0.34 : 1 on average which is very good, and holes like that obviously contribute a great deal to this.
The drill results at the western end of Powerline provided very nice expansion results, and although the previous news release did not have strong results for the southern step-out holes (in red), the current news release handed over excellent numbers for further expanding to the norht drilling. So maybe Powerline might be limited to the south west, successful holes like 310 (in total 118m @ 0.35g/t on average) provide decent ounces close to these limits. As a consequence, a back-of-the-envelope estimate on the western part of Powerline resulted in a global 500x400x65x2.75t/m3 = 35.8Mt, and based on an average estimated grade of 0.35g/t Au this would mean 404koz Au hypothetically added for now, bringing the hypothetical newly added ounces over 623Moz Au, taking the hypothetical total for AurMac to 5.8Moz Au. According to CEO Tara Christie, the next resource update is planned for in 2023, after receipt of the bulk of 2022 drill assay results.
As 10% of the overall 2022 drilling was focused on high priority regional targets on the AurMac Property and Nitra Property, I’m curious what will come out of these holes. I like it that management opted to drill a holes at Galena Hill, a target about 6km to the east and talking to Tara I understand there are targets around the historic 1km m step out RAB holes, many of which have been useful guiding the work at Aurex Hill.
These results (yellow dots) to the east of Powerline could imply a back-of-the-envelope resource increase of 1100x100x55x2.75t/m3 = 17Mt, based on an average grade of 0.4g/t Au this would be a hypothetical 219koz Au.
As a reminder, Banyan Gold has an option agreement with Victoria Gold on AurMac, already owning 51%, and has already completed all exploration expenditures to earn 100%. By deliberately not forming the JV yet, which was possible at 51% ownership, it saves the additional time, legal and accounting costs of managing a JV, and according to management it is most likely that Banyan is on the path to earning into a 100% ownership. Banyan Gold retains this option by paying Victoria Gold C$2M in shares or cash for the underlying Aurex property and a further C$2.6M in shares or cash for the underlying McQuesten property, and complete a PEA by 2025. The PEA should be relatively straight forward given the comparable Eagle Gold Mine was recently built and provides actual operating costs for heap leach in this jurisdiction, so this will likely be achieved way ahead of schedule. On top of this, Victoria will be granted a 6% NSR on both properties. These two 6% royalties can be reduced to 1% regarding gold by paying C$7M per royalty.
Conclusion
Banyan Gold seems to succeed in achieving their 6-7Moz Au target, as according to my global estimates the current resource could very well stand at 5.8Moz Au already based on the last drill results. As many more assays have to be returned from the labs, I expect AurMac to grow further and at least surpass 6Moz Au. If Nitra exploration reveals another district-type gold play like AurMac, this could be a real gamechanger. AurMac already has Tier I written all over it, and another Tier I discovery would really put Banyan firmly on the radar of all majors. With gold sentiment turning, albeit probably shortlived during the next few months because of another set of upcoming rate hikes, Banyan is in an excellent position to profit from renewed investor interest.
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter at www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.
Disclaimer:
The author is not a registered investment advisor, and currently has a long position in this stock. Banyan Gold is a sponsoring company. All facts are to be checked by the reader. For more information go to www.banyangold.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
All presented tables are my own material, unless stated otherwise.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Please note: the views, opinions, estimates, forecasts or predictions regarding Banyan Gold’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of Banyan or Banyan’s management. Banyan Gold has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.
In the meantime, inflation doesn’t seem to back down, and although recession seems to be in the cards, markets became slightly more positive as the Ukraine claims an important strategic victory by reclaiming Kherson, the US seems to urge the Ukraine into more diplomacy regarding Russia, and China seemed to loosen their very stringent COVID measures, causing lots of metal prices to jump. Precious metals jumped as well, as the US Dollar weakened on increasing US unemployment rates for October, creating hopes that the Fed could pivot to lesser hawkish rate hikes. In Europe, salary hikes are starting to become mainstream now, creating a salary-price spiral which would fuel further inflation until prices become so high that demand destruction would eventually be the cure for all this.
Banyan Gold recently completed their 2022 drill program, which resulted in 211 drill holes and over 50,000 m of drilling being completed so far.
The amount of higher grade (> 0.65-0.70g/t Au is higher grade oxidized material) intercepts is impressive, as grades regularly surpass 1.00g/t Au which is extremely good for heap leachable ore. A hole like 320 doesn’t come along very often of course, containing 84.4m @ 1.13g/t Au from 22.8m which means the strip ratio there is almost 0.25 : 1 waste to ore. The overall strip ratio for Powerline, which contains the bulk of the current NI43-101 compliant resource (2.9Moz Au) is 0.34 : 1 on average which is very good, and holes like that obviously contribute a great deal to this.
The drill results at the western end of Powerline provided very nice expansion results, and although the previous news release did not have strong results for the southern step-out holes (in red), the current news release handed over excellent numbers for further expanding to the norht drilling. So maybe Powerline might be limited to the south west, successful holes like 310 (in total 118m @ 0.35g/t on average) provide decent ounces close to these limits. As a consequence, a back-of-the-envelope estimate on the western part of Powerline resulted in a global 500x400x65x2.75t/m3 = 35.8Mt, and based on an average estimated grade of 0.35g/t Au this would mean 404koz Au hypothetically added for now, bringing the hypothetical newly added ounces over 623Moz Au, taking the hypothetical total for AurMac to 5.8Moz Au. According to CEO Tara Christie, the next resource update is planned for in 2023, after receipt of the bulk of 2022 drill assay results.
As 10% of the overall 2022 drilling was focused on high priority regional targets on the AurMac Property and Nitra Property, I’m curious what will come out of these holes. I like it that management opted to drill a holes at Galena Hill, a target about 6km to the east and talking to Tara I understand there are targets around the historic 1km m step out RAB holes, many of which have been useful guiding the work at Aurex Hill.
These results (yellow dots) to the east of Powerline could imply a back-of-the-envelope resource increase of 1100x100x55x2.75t/m3 = 17Mt, based on an average grade of 0.4g/t Au this would be a hypothetical 219koz Au.
As a reminder, Banyan Gold has an option agreement with Victoria Gold on AurMac, already owning 51%, and has already completed all exploration expenditures to earn 100%. By deliberately not forming the JV yet, which was possible at 51% ownership, it saves the additional time, legal and accounting costs of managing a JV, and according to management it is most likely that Banyan is on the path to earning into a 100% ownership. Banyan Gold retains this option by paying Victoria Gold C$2M in shares or cash for the underlying Aurex property and a further C$2.6M in shares or cash for the underlying McQuesten property, and complete a PEA by 2025. The PEA should be relatively straight forward given the comparable Eagle Gold Mine was recently built and provides actual operating costs for heap leach in this jurisdiction, so this will likely be achieved way ahead of schedule. On top of this, Victoria will be granted a 6% NSR on both properties. These two 6% royalties can be reduced to 1% regarding gold by paying C$7M per royalty.
Conclusion
Banyan Gold seems to succeed in achieving their 6-7Moz Au target, as according to my global estimates the current resource could very well stand at 5.8Moz Au already based on the last drill results. As many more assays have to be returned from the labs, I expect AurMac to grow further and at least surpass 6Moz Au. If Nitra exploration reveals another district-type gold play like AurMac, this could be a real gamechanger. AurMac already has Tier I written all over it, and another Tier I discovery would really put Banyan firmly on the radar of all majors. With gold sentiment turning, albeit probably shortlived during the next few months because of another set of upcoming rate hikes, Banyan is in an excellent position to profit from renewed investor interest.
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter at www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.
Disclaimer:
The author is not a registered investment advisor, and currently has a long position in this stock. Banyan Gold is a sponsoring company. All facts are to be checked by the reader. For more information go to www.banyangold.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
All presented tables are my own material, unless stated otherwise.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Please note: the views, opinions, estimates, forecasts or predictions regarding Banyan Gold’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of Banyan or Banyan’s management. Banyan Gold has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.
