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Searching for a core of gold
Sat Sept 22, 2007
Searching for a core of gold
Publisher: The Star Phoenix
Author: Peter Wilson
LA RONGE -- A recent cold snap in the northern forest had all but eliminated the mosquitoes, but Saskatchewan's gold bugs were out in full force.
More than a dozen gold-hunting geologists, mining engineers and the all-important financial gurus were poring over core samples recovered from varying depths below the ground, about 100 kilometres north of La Ronge.
Magnifying glass in hand, Ronald Netolitzky stood in the forest clearing, ground zero of his company's Bingo exploration site. He was peering expertly at a small section of rock drilled out of the ground 20 or 30 storeys below the surface.
"I can actually make out relatively coarse visible gold in this particular sample, which is a good sign," he says.
With record high gold prices spurring investor interest, Saskatchewan, with its long history of mining the glittering mineral, is once again on the world's exploration radar.
Netolitzky is known as the "Rock Star" in mineral exploration circles. The veteran geologist has discovered numerous valuable ore bodies in Saskatchewan and around the world, from Argentina to Zimbabwe.
Netolitzky, who received the Prospector of the Year Award in 1991, garnered his first experiences in this region 40 years ago, mapping roughly the same territory he's flown into today.
Now chair of Golden Band Resources, a Saskatoon-based mineral exploration company, the 63-year-old's attention is again firmly focused on this province's gold potential, which he says looks rosy.
He's not alone.
From the rattling interior of the Twin-Otter float plane, Rodney Orr, Golden Band's president, had looked out over the fabulous golden colours of the autumn forest passing below.
For the veteran geologist, it was what was under the trees and embedded in the sprawling mass of Precambrian Shield rock that was probably occupying his attention as the sturdy plane headed north.
After splashing down onto Otter Lake, less than 100 kilometres north of La Ronge, there was a still a 20-minute truck ride ahead for Orr and his colleagues to get to Golden Band's Bingo exploration site.
The short, but bumpy, overland trip had given mining neophytes an idea of just what's involved in recovering the precious metal that goes into wedding bands, necklaces and what fills dusty bank vaults around the world.
Road equipment was busy remedying the road's condition, widening and smoothing out rough spots for the anticipated extraction of the gold deposits where Golden Band's three-month diamond drilling program was taking place.
Think needles and haystacks when it comes to gold mining, but Golden Band Resources believes it has located more than a few of those needles. Listed on the TSX Venture Exchange, the junior exploration company's shares are selling for less than 50 cents, a penny stock that Orr thinks has upward potential.
Gold, wherever it is, doesn't exactly leap out of the ground by itself. It costs money to find the stuff.
Already the company has spent more than $10 million on its exploration and acquisition programs, and plans to more than double that expenditure during the next 12 to 18 months before its mining operations begin to extract gold from the ground, anticipated in 2009.
Golden Band's costs so far have been low by industry standards, a fact Orr puts down to the measured approach the company has taken in developing its plans.
After about 14 years of exploration, staking and acquiring properties in Saskatchewan's gold mining heartland, Golden Band is moving ever closer to making the transition from an exploration company to a production company, says Orr.
"We are now well on our way to the path of production," he says.
In a carefully played out strategy, the company has put together a team of mining and exploration experts while securing about 750 square kilometres in what they believe is prime gold property north of La Ronge.
A crucial part of the lengthy acquisition process was the 2003 purchase of the Jolu Mill, a gold processing facility located in the middle of the company's gold deposit sites. Built in 1988 to process ore from the nearby Jolu mine, it was mothballed in 1991 after the ore body was exhausted.
If it were constructed today, the Jolu mill would probably cost between $30 million to $40 million, says Orr.
Purchased at cents on the dollar, the milling facility, after refurbishment, will be the anchor to the company's mining developments in the area. The deals they have made has also given the company access to more than $55 million in exploration experience and results in their property area, he says.
"We began acquiring properties when gold was out of favour, so our properties were relatively inexpensive," Orr says.
Now with gold soaring to around $740 an ounce, he figures that those extensive boardroom negotiations, and those chilly days in the bush chipping rock samples, look like time well spent as far as the company's potential is concerned.
Golden Band's measured and indicated gold resources now total more than 734,000 ounces, based on six of 10 of the company's deposit sites located in the Greater Waddy Lake area. In addition, mineral analysis of the company's Bingo deposit indicates more than 61,000 ounces of recoverable gold.
"And that's not counting our most recent property, which looks promising," Orr says.
A memorandum of understanding signed with the Lac La Ronge Indian band, whose people have traditionally hunted, trapped and fished the area, reflects the recognition of the joint interests of the two parties, says Orr.
The exploration programs have already created employment for band members, says Lac La Ronge band Chief Tammy Cook-Searson.
From line-cutting and prospecting to road building, band members are currently working in a variety of jobs with Golden Band and its mine contractor. Future development of the potential mining sites will add to the job creation process, she says.
The band is committed to working with Golden Band to ensure both sides benefit from a safe, environmentally responsible and profitable workplace, Cook-Searson says.
© The StarPhoenix (Saskatoon)
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