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Terrax Minerals Inc
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Terrax pegs Yellowknife City at 735,000 oz inferred

2019-11-04 07:05 ET - News Release

Mr. David Suda reports


Terrax Minerals Inc. has released a first mineral resource estimate on its 100-per-cent-owned Yellowknife City gold project, located 12 kilometres from the city of Yellowknife and seven kilometres from the former Giant mine. The classification of the mineral resource estimate was completed in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definition standards incorporated by reference in National Instrument 43-101.

The inferred resource estimate of 735,000 ounces consists of:

  • A pit-constrained inferred resource of 11.6 million tonnes averaging 1.4 grams per tonne for 523,000 ounces of contained gold;
  • An underground inferred resource of 1.2 million tonnes averaging 5.7 g/t for 212,000 ounces of contained gold.

Gerald Panneton, executive chairman of Terrax, stated: "This first mineral resource for the Yellowknife City gold project is a major milestone in the project development. To date, drilling has barely scratched the surface of the property and already we are having exploration success at Sam Otto and Crestaurum, and elsewhere. We are planning a drilling campaign for Q1 2020 on these two main mineralized zones, where we believe the potential to increase the resources is excellent."

Estimation methods

The mineral resource estimate includes four gold deposits: Sam Otto, Crestaurum, Barney and Mispickel, which are all within a three-kilometre radius. It incorporates the results from 463 drill holes totalling 90,751 metres, from which 201 drill holes totalling 42,447 metres were completed by Terrax from 2014 to 2019. In general, the drilling is variably spaced reflecting different mineralization styles and ranges from 25 to 100 metres apart.

The mineral resource estimate was prepared by Dr. Allan Armitage, PGeo, from SGS Geological Services. SGS used Geovia Gems software to construct mineralized wire frames for each zone and then interpolated tonnage and grade into block models constrained by the mineralized wire frames and used inverse distance squared (ID2) interpolation. Block sizes were five metres by two metres by two metres for Crestaurum and five metres by two metres by two metres for Barney to generate underground estimates, and five metres by five metres by five metres for pit-constrained estimates on Sam Otto and Mispickel. Appropriate interpolation parameters were generated for each deposit based on the mineralization style and geometry.

The pit shells were created using Whittle pit optimization software and applying the following optimization parameters: $1,300 (U.S.) gold price; $2.20 (U.S.)/tonne for mining cost; $16 (U.S.)/tonne for processing and general and administrative costs; 90-per-cent metallurgical recovery; 5-per-cent dilution (external); 5 per cent mining loss; and greater than 55 pit slopes (the deposits occur in areas of extensive outcrop with negligible overburden).

The mineral resources estimate is summarized in the attached table. A supporting NI 43-101 technical report will be filed on SEDAR within 45 days of this release.

                    (Effective Nov. 4, 2019)

Pit-constrained inferred mineral resources                           

Deposit                        Tonnes   Grade (Au g/t)   Contained gold ounces

Crestaurum pit (starter)      127,000            9.41                   38,000               
Mispickel pit                 696,000            2.62                   59,000               
Sam Otto pit               10,794,000            1.23                  426,000              
Pit-constrained total      11,617,000            1.40                  523,000              
Underground inferred mineral resources                               

Deposit              Tonnes   Grade (Au g/t)   Contained gold ounces

Crestaurum U/G      723,000            6.56                  153,000              
Barney U/G          214,000            4.67                   32,000               
Mispickel U/G        30,000            4.99                    5,000                
Sam Otto U/G        185,000            3.65                   22,000               
U/G total         1,152,000            5.70                  212,000              
Total inferred   12,769,000            1.79                  735,000              

(1) The classification of the current mineral resource estimates as inferred is 
    consistent with CIM definition standards on mineral resources and mineral 

(2) Mineral resources which are not mineral reserves do not have demonstrated 
    economic viability.

(3) Underground mineral resources are reported undiluted and in situ at a 
    cut-off grade of 3.0 g/t Au.

(4) Cut-off grades are based on a gold price of $1,300 (U.S.) per ounce and gold 
    recoveries of 90 per cent.

(5) Gold recoveries are based on preliminary test work completed on the Crestaurum 
    and Sam Otto deposits.

(6) High-grade capping was done on composite data. Capping values of 55 g/t Au were 
    applied to Crestaurum and 60 g/t Au for all other deposits.

(7) Bulk density values were determined based on physical specific gravity test work 
    from each deposit: Crestaurum at 2.85 grams per cubic centimetre; Barney at 3.00 
    g/cubic centimetre; Sam Otto and Mispickel at 2.80 g/cubic centimetre.

(8) All figures are rounded to reflect the relative accuracy of the estimate.

Follow-up drilling program for Sam Otto and Crestaurum deposits

The Sam Otto deposit is currently the largest deposit of the four containing a pit constrained inferred mineral resource of 426,000 ounces gold (10,794,000 tonnes averaging 1.23 g/t) to a maximum depth of 200 metres. The shear-hosted gold mineralization has been defined over a strike length of 4.5 kilometres. The associated quartz vein system has a width ranging from 15 to more than 25 metres. The deposit remains open along the north-south strike direction and at depth.

A follow-up drilling program at Sam Otto is being planned for the first quarter of 2020 with the objective of extending the current deposit. The current lack of drilling in many areas of Sam Otto has put a limit on the initial mineral resources within the pit optimizations.

The Crestaurum deposit, located only three kilometres southwest of Sam Otto, is outcropping at surface with some high-grade gold mineralization that has been modeled for a shallow starter pit before moving potentially into an underground operation. The current scenario estimates a pit-constrained inferred mineral resource of 38,000 oz gold (127,000 tonnes averaging 9.41 g/t) to a depth of 45 metres and an underground inferred mineral resource of 153,000 oz gold (723,000 tonnes averaging 6.56 g/t). The deposit remains open in all directions and all underground zones defined to date remain open along strike and down plunge.

The proposed drilling program for early 2020 will focus on testing the depth extension of the Crestaurum deposit and infill drilling to increase the confidence level of the resource to the indicated category.

The gold mineralization at Crestaurum is very similar in style to the past-producing Con mine located 15 kilometres to the south. The Con mine produced six million ounces of gold from 1938 to 2004 and was mined to a depth of 2,000 metres below surface. Archean shear-hosted gold deposits typically extend vertically and along strike for kilometres. The Crestaurum deposit is likely an extension of the same mineralized system from the Con mine. The Crestaurum deposit is hosted in mafic volcanics (Kam group) and is a lode-gold-style deposit consisting of quartz veins hosted within a discrete sericite-chlorite-carbonate shear zone.

Technical information and quality control procedures

The technical information contained in this news release has been reviewed and approved by Dr. Allan Armitage, PGeo, from SGS, who is an independent qualified person under NI 43-101. The information contained in this news release was also reviewed and approved by Joe Campbell, PGeo, chief operating officer for Terrax.

Terrax's drilling programs are monitored through the implementation of a quality assurance and quality control (QA/QC) program. The drill core (NQ size) is logged and sample intervals for assay are selected by Terrax's geologists. In general, the sampling intervals vary from half a metre to one metre in length depending on the geology and mineralization observed. The drill core samples are cut by diamond saw at Terrax's core facilities in Yellowknife. Half of the core sample is left in the core box and stored in a dedicated core storage facility in Yellowknife. The other half core samples are transported in securely sealed bags by Terrax personnel to ALS Ltd. preparation laboratory in Yellowknife. After sample preparation, samples are shipped to ALS Vancouver facility for gold and a complete digestion four-acid ICP analysis for 33 elements. Gold assays of greater than three g/t are reassayed on a 30-gram split by fire assay with a gravimetric finish. ALS is a certified and accredited laboratory service operating to ISO 17025 standards. ALS routinely inserts certified gold standards, blanks and pulp duplicates, and results of all QC samples are reported. Terrax inserts certified standards and blanks into the sample stream as a check on laboratory QC.

In addition to traditional assay methods, Terrax also carries out a variety of spectrometry tests on selected core and rock samples to determine the associated mineral characterization and the gold deportment within the mineralized zones.

About the Yellowknife City gold project

Through a series of acquisitions, Terrax owns a 100-per-cent interest in the Yellowknife City gold project, encompassing 783 square kilometres of contiguous land within 12 kilometres of the city of Yellowknife. The project is located in the prolific Yellowknife greenstone belt, covering 70 kilometres of strike length along the main mineralized break in proximity to the former high-grade Con and Giant gold mines which have produced over 14 million ounces of gold. The YCG project is close to vital infrastructure, including all-season roads, air transportation, service providers, hydroelectric power and skilled tradespeople.

The project area contains multiple shear zones that are the recognized hosts for gold deposits in the Yellowknife gold district. With innumerable gold showings and the recent high-grade drill results indicate the project's potential to be a world-class gold district.

We seek Safe Harbor.

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