Given the recent porphyry discoveries in the Golden Triangle during the 2018 season at the Hank (TSX-V: $GLDN) and Tatogga Properties (TSX-V: $GTT), the subsequent market exposure to southern British Columbia exploration plays has been limited.

It is no secret that the last ten years have been tougher times for southern BC mine operators, as grades and resources continue to decline at the big three metal producers in the region, Highland Valley Copper (TSX: $TECK), New Afton (TSX: $NGD), and Copper Mountain (TSX: $CMMC).

Further adding to fears about mine development in the region was the failure of approval for KGHM’s Ajax Mine Project near Kamloops, which negatively affected local exploration companies, casting doubt about the feasibility of creating new mines in this region. 

The above table represents an in-situ valuation of the Ajax deposit at approximately 11 billion US dollars, using current metal prices. As it eventually became clear, despite the Ajax resource containing of 2.7 billion pounds of copper and 2.6 million ounces of gold, it was far too close to town and could not be mined.

KGHM realized the hard way that a large open-pit mining operation with daily blasting is not feasible in this type of location, less than 5km from a rapidly developing housing subdivision.

KGHM quietly closed its Kamloops office in early 2018.

So where is the silver lining in this? Well the benefit is that it truly showed the local junior and senior miners, just how close is too close. It showed how important project location is, despite a large and valuable resource. It showed that in order to be successful, you must cross off all the points of the checklist, as with any mining project.

The Miner’s Checklist – Location, Location, Location…

  • Well-developed transportation infrastructure
  • Well-developed power and water infrastructure
  • Skilled local work force
  • Ease of permitting
  • Supportive local First Nation
  • Supportive local public attitude
  • Historical and ongoing resource extraction
  • Senior mining companies looking for new projects

Once you can cross off the all the items in that list, the search for the right prospective host rocks begins. In southern BC, widespread mineralized intrusive and volcanic belts are known, such as the Iron Mask, Nicola Volcanic Belt, and Guichon Batholith, pictured below.

Out of these rock units listed, ALL host currently producing mines. This southern BC mining district is not only one of the best in BC, but should be considered among the best in all of Canada.


A select group of junior explorers realize the discovery potential of the region, and have continued to successfully move projects forward.


Westhaven Ventures Ltd. (TSX-V: $WHN) and Jiulian Resources Inc. (TSX-V: $JLR) are two such companies with compelling properties in ideal locations, far from town limits, out of sight, and with significantly less chance for the problems that KGHM faced with the Ajax mine development.

Westhaven Ventures Ltd. is a junior mining company trading on the TSX-V under the symbol $WHN who are currently exploring its flagship Shovelnose Property near Merritt, BC, Canada. A brief history can be seen in the table below.

As you can see from the timeline, Westhaven has been exploring the Shovelnose Property for quite a while, since at least 2011. The earliest drilling was done in 2012 near the Line 6 showing and drilling has progressed roughly southeast since then, resulting in the discovery of the Tower, Alpine, and South Zones in subsequent drill programs. Notably, year by year, drilling intercepted progressively higher gold grades over larger intercept widths.

The South Zone - Juicier By The Day

The South Zone has recently come into focus as the best target area on the Property, with multiple 100+ gram-meter intercepts. The most recent was released on March 15th 2019, where they intersected 12.66m of 39.31 g/t Au (497 gram-meters). Quite an impressive intercept and importantly it is near the southeastern edge of the drilling area to date.

The above map (modified from Westhaven, 2019) shows the drilling at the South Zone where Westhaven is making progress to the southeast, tracing the high-grade feeder zone, most recently intercepted in SN19-01. 2019 drill holes are pictured in red, with assays for SN19-02 and SN19-03 pending.

The drilling at the South Zone has been largely positive with multiple drill holes hitting high-grade gold, but there is the elephant in the room, notably the miss on SN18-19. SN18-19 is the farthest drill hole to the south, within the South Zone, seen at the far end in the above map.

While this drill hole was not a home run, it still contained low-grade gold, which has shown to be proximal to other high-grade intercepts. Essentially, this drill hole did not close off the zone. The gold system at Shovelnose seems to exist as a structural conduit of alteration, silicification, and shearing within a large rhyolite volcanic pile, with some degree of randomness of the location of high-grade pockets. There is still plenty of possibility for more high-grade intercepts to the east and to the south. 

Westhaven has seen rapid strong price movement since the release of the discovery drill hole in the South Zone in October 2018, moving from a market cap of approximately $25M CAD to its current MC around $100M CAD.

When SN18-19 was released on January 21st 2019, WHN did experience a sell-off based on the sentiment of the perceived step out miss, creating a new base around 75 cents. Westhaven was able to reward these new investors with the most recent release on March 15th 2019, detailed above (SN19-01). The stock gapped up to its current price point, around $1.10, and has held this level for about two weeks now.

With 3,000 meters of drilling underway, $3M cash, and the imminent release of SN19-02, and 03, this stock has rebuilt much of its previous momentum. The company has made more deliberate drilling progress recently, with reduced step out distance making slow progress to the south. Company maps indicate that numerous magnetic lineation features extend from this area, similar in geometry and magnitude to the South Zone, which could be additional gold feeder zones hidden by overburden. This company appears to have figured out how to effectively explore their property, and they seem poised to find additional high-grade gold.

The Dark Horse – Jiulian Resources Inc.

Jiulian Resources Inc. is a junior mining company trading on the TSX-V under the symbol $JLR who are currently exploring its flagship Big Kidd Property, also near Merritt, BC, Canada.  They are another company which I believe has their Property in the "sweet spot", a location about 20km from the nearest large town, where you have enough distance from densely populated areas to not experience major mine development issues, but also have the benefits of well developed infrastructure and local contractors. A large high-tension powerline runs across the Property.

Where does this powerline eventually go? You guessed it, an operating mine site.

A brief history of exploration at the Big Kidd Property can be seen below:

As seen in the timeline, the Big Kidd Property has also seen multiple years of exploration with multiple operators, mostly a series of shallow drilling and geophysics dating back from 1970s up until the most recent program, completed by Xstrata (now Glencore) in 2012. 

The Big Kidd Property has mineralization in at least three zones, but it is poorly understood how they connect and the ultimate mechanics behind their emplacement. Some large regional faults which separate the Nicola Volcanic sub-groups (called "facies") run through the Property, and are thought to be important, possibly as conduits which allowed mineralization to develop.


 At the Copper Mountain mine, the resource is similarly located near the Nicola Volcanic facies margin, proximal to a shallowly buried granitic intrusion.


Numerous MINFILE occurrences pepper the Big Kidd Property, mostly characterized as porphyry and intrusive related Cu-Au. For clarity sake only the more advanced MINFILE sites are shown in the map below.

Most of the past work programs have focused on the Big Kidd breccia which is a sub-unit of the granite type rocks, shown as the pink colored blobs in the above map. The Big Kidd breccia is roughly 500m x 400m, with a very high Au-Cu ratio, unlike what is typically seen in porphyry systems. The gold ratio at the Big Kidd Property goes up to around 5:1 Au-Cu, which has shown a correlation with sulfide abundance, including auriferous pyrite. These grades went up to 0.95 g/t Au and 0.17% Cu over 117 meters (143 gram-meters AuEq), in previous drilling.


This begs the question ... Is this really a copper porphyry? 

Just how much gold does it take for something to become mostly a gold mine?


If you were to closely examine the pictures from the most recent uploaded data on the Jiulian Resources website, one thing that seems quite prominent is the strength of alteration combined with the amount of overall sulfide in the core, which was listed at 10% by company geologists, but looks to be higher than that over limited sections.

Hydrothermal sulfide breccia, with abundant mixed sulfides and overlapping high-intensity alteration. Does this stuff run for gold? We will find out soon enough...

Of particular importance for the 2019 drilling is the Big Brother Zone which is a new depth target that has not seen previous drilling. It appears that some of the 2019 drill holes may have been drilled specifically into this new area. Without a drill plan map it is hard to know for sure. There may be a rabbit in the hat moment coming.

Jiulian has seen very little price movement from the start of drilling in January 2019, up until market close today. Volume has been fairly steady, averaging around 100K shares a day, with some small bursts of volume and price movement.  The market cap remains at a very small number, only $3.20M CAD, but this figure could see a major move if they are indeed able to follow up on the Big Kidd, and find a new zone with wildcat / longer drill holes and step outs. 

The stock is tightly held, with around 30M shares outstanding, the majority of which is owned by insiders of the company. The most recent financing comprises half of the available float, and was offered to a very limited group. The discovery of a new zone, outside of the Big Kidd breccia could warrant a major shift in MC.

The company is also utilizing the same technical team, Ridgeline Exploration, as the previous drilling at the Hank Property in the Golden Triangle. This technical team was the same group that recently made a significant discovery at the Williams Zone, another Cu-Au system which should be an interesting story once the snow melts, and they get back to drilling.  

For now, this group appears dominantly focused on the Big Kidd project...

Jiulian Resources is also experiencing a changing of the guard of sorts, with the replacement of a number of key directors, adding some new faces, with the addition of Scott Dorion and Oliver Friesen. These guys are part of the the next generation of geologists with a strong technical background, a knack for exploration, and the urge to make a significant discovery.

With the recent extension of the drill program, $1.3M in cash, drilling progressing and results imminent, unless they are all dusters (which the core photos largely negate) this stock doesn’t seem like it has much place to go but up.


Not The Golden Triangle - The Resurgence of Exploration in Southern British Columbia


As the northern drilling season remains locked in snow and ice, a few companies are working hard to find new resources in the traditional mining district of Southern British Columbia. 

There is the old adage: Look in the shadow of the head frame...

These are two of the companies that realize the potential of the region, and are poised to have a shift in market cap if they can continue to have exploration success. 


Best of luck, and hope you are all enjoying the spring weather.

Cheers,

@buck85


Disclaimer: I hold positions in both stocks detailed above. This article is not an investment recommendation.

The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above.

Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.


@buck85 is a British Columbia based geologist and fellow investor in the resource sector. He spends his free time snowboarding, fly fishing, and exploring the vast outdoors of beautiful Western Canada.

If you or your company is interested in a research article similar to the above on your project, feel free to direct message me on CEO.ca