Five years ago, when Canadian exploration company Durango Resources Inc. (TSX-V: DGO ; Frankfurt: 86A1 ; OTCQB: ATOXF) first appeared on the investment radar, gold was in the doldrums. In October 2015, the gold price hovered at around USD1,142 per ounce, lucky to tread water above USD1,000 per ounce after a horrific run by the yellow metal. At those depressed prices, early-stage gold exploration projects were put on ice, which was not all bad news. The subsequent lull gave junior mining companies time to plot and plan for when the gold bulls started running again.
They waited for almost four and a half years before the uncertainty wrought on the world by Covid-19 in early 2020 caused the gold price to head for the stars. At record levels threatening the USD2,000 per ounce mark, gold was sexy again and junior outfits like Durango Resources finally had breathing space to implement their finely tuned, pre-pandemic gold exploration plans.
Dilution not an option
In 2015 gold was not the major focus for the all-women management team at Durango. Then, their flagship project was what, at first sight, looked to be an obscure limestone deposit close to the City of Terrace in British Columbia. However, it turns out that the Mayner’s Fortune limestone property is a lot more than what initially meets the eye. Mayner’s, a significant deposit, will be a strategic asset when Durango needs additional funding to advance the company’s Windfall Lake gold project in Québec. While Mayner’s drew media attention five years ago, Durango was, concurrently, testing soil samples for gold occurrences in an extremely prospective Greenstone Belt province in the eastern parts of Canada.
According to Marcy Kiesman, President, CEO and Director of Durango, the plan was always to spend money on drilling up the limestone deposit at Mayner’s, sell it, and use the proceeds of the sale to fund their gold and silver projects in the east without diluting shareholders. This strategy makes sense at a time when funding for early-stage greenfield projects is not easy to come by even with metal prices reaching record highs.
Kiesman has got a lot of skin in the game herself, owning almost 4.6 million shares in Durango. The company has a tight shareholder register with about 25% of the company held by close friends and family. Kiesman says she remains cautious about issuing new shares and diluting the stock and shareholders. Mayner’s, thus, holds the key for Durango to reach the end goal. Its inherent value serves as insurance to continue drilling at the company’s gold assets, and during the initial stages of what could become a significant gold province, keeping the company afloat.
Mayner’s holds the key
Mayner’s is a strategic limestone deposit in an area where, in 2024, LNG Canada will bring the CAD40-billion liquefied natural gas (LNG) close to Kitimat into production. Limestone is an extremely important building material, especially in the construction of the LNG trains and holding facilities, and demand for limestone in this area is expected to increase threefold as the project progresses. Construction at Kitimat got underway in late 2019 and although its progress was affected by Covid-19 in 2020, building seems to be in full swing again.
Mayner’s consists of a two-kilometre- thick metasedimentary sequence hosting six sub-parallel north to north-east-striking limestone units of variable thickness. Durango has permit approval from the British Columbia Ministry of Energy, Mines and Petroleum Resources for its bulk tonnage application at the deposit. The permit will allow Durango to determine the volume and quality of limestone unit #5 and provide an understanding of the potential tonnage for the unit. Unit #5 has been measured at 1.6km long and Durango is interested in determining the calcium carbonate levels at depth. Limestone units #1 and #3 are already known to be of high quality and generous size.
Limestone unit #1 has an historical Inferred Reserve for the 10-mile zone measured 454,000 tonnes grading 96.3 per cent limestone. Representative samples taken from outcrop sections of Mayner’s occurrence assayed calcium carbonate levels at 97.6%. Additional assays in the area have returned calcium carbonate levels up to 99.9% at surface. Mayner’s limestone project is an attractive proposition and once sold, Durango will be able to turn its full attention to its prospective gold properties at Windfall Lake.
A golden windfall in Barry Greenstone
Windfall Lake is located in the Urban Barry Greenstone Belt, an area well drilled and explored by Osisko Mining (TSX-V: OSK), another junior exploration outfit.
In late November 2017 Durango’s exploration team managed to obtain 50 till/soil samples from the company’s northern blocks which neighbour Osisko Mining. These claims were deemed priority due to being cut by crosscutting fault systems striking toward the Windfall Lake main mineralized system.
Thirty-six five-kilogram till and 36 duplicate soil samples were collected, analyzed for fine-fraction analysis, and sampled for gold grain count and dense fraction. Of the 36 till samples taken from the area, 17 samples, (47% of the samples collected), returned gold grains, and 25 till samples of the multi-element assays reported gold anomalies between five ppb (parts per billion) and 3,480 ppb, (representing 74% of the samples collected).
A duplicate of heavy mineral concentrate for each till sample for each station was sent for a complete 36-element assay analysis. Twenty-five of the 36 samples returned anomalous gold values and 15 of the samples returned values of between five ppb and 100 ppb gold. The highest returned gold anomalies from the analysis were 3,480 ppb Au (sample DGT-30), 1,160 ppb Au (sample DGT-17), 425 ppb Au (sample DGT-18), 305 ppb Au (sample DGT-27), 160 ppb (sample DGT-26) and 121 ppb (samples DGT-10 and DGT-8).
Meanwhile neighbours Osisko Mining undertook an extensive drilling programme of their license area in 2019 which returned impressive results. The company drilled out an Indicated Resource of 4.127 Mt at 9.1 g/t Au for 1.21 Moz Au and an Inferred Resource of 14,532 Mt at 8,4 g/t Au for 3,94 M oz Au. Osisko’s Mineral Resource estimate occurs above 1200m vertical depth. What it proves, is that there is undoubtedly gold mineralization within the intrusions and that Durango is at the right postal code in prospective territory.
In early February Durango announced that drilling at the Trove and East Barry Properties within the Windfall Lake license continued, although work was somewhat disrupted as a result of Covid-19 and mild winter conditions.
Currently, Durango is drilling holes on the northern portion of the Trove Property which was inaccessible until late 2020 due to late cold weather conditions. Approximately 3,400m have been drilled on the Trove Property in 2020 and 2021 over 12 holes. The Trove exploration program was designed to test the high priority Induced Polarization (IP) anomalies in the northern section of the Trove Property. So far, the majority of the mineralized sections were encountered within 200m below surface, with some exceptions encountering mineralization at depths of 300m and more.
In January, Durango drilled three scout holes on the East Barry Property totalling 1,969m to try to determine the location of the felsic dykes in intrusive pluton. The scout holes enabled Durango to derive structural and lithological data on the East Barry and to test till anomaly targets which were previously inaccessible.
More than 2,000 samples are pending assay results at multiple labs for both the Trove and East Barry properties. Durango has encountered further lab delays due to a Covid-19 breakout at one of the processing facilities earlier this month, so the Company has secured additional labs to help alleviate the turnaround time and assay delays. Durango’s exploration and drill teams have not been exposed and continue to remain safe and healthy at the camp.
A treasure trove of silver and gold
More good news followed and towards the end of February Durango announced that its exploration team has encountered shallow silver and zinc mineralization from prospecting drilling on the Trove Property. Since last fall, the team has drilled 3,735m on the Trove Property, with an average depth of 287m. The exploration team arrived back on site in mid-January as the cold weather retreated, and they were able to access the high priority drill targets.
Since the start of this year’s drill program, Durango has drilled approximately 1,600m on its high priority targets on the Trove Property.
“We are encouraged to have silver showings on our prospecting drilling given that we had redirected our drill program to explore this part of the Trove property as our primary targets were inaccessible due to the weather. We were fortuitous to find both silver and zinc in this first tranche of results from our program, which is particularly exciting. In the meantime, Durango will continue to drill at Windfall Lake as we refine our high priority targets and expand our efforts in this promising area,” says Kiesman.
At a time when gold remains steady adding promising early-stage exploration projects to an investment portfolio will do no harm, especially with Covid-19 not completely laid to rest yet. Durango’s results at Windfall Lake looks promising. It’s a long play though and the company will need funding to continue its early-stage drilling. And this is when Durango’s limestone deposit at Mayner’s will be key to unlocking its promising potential in the east.
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