Hello Guest User, You are visiting this website from a computer with an IP address of 172.70.34.203 with the name of '?' since Fri Feb 7, 2025 at 11:35:51 PM PT for approx. 0 minutes now.
Daily KRO 2024 Favorites Report Publisher: Kaiser Research Online Author: Copyright 2024 John A. Kaiser
Daily Kaiser Research Favorites Report for February 7, 2025
(0:12:56): Why did you promote TDG Gold Corp from Bottom-Fish to Favorite?
TDG Gold Corp was made part of the 2025 Bottom-Fish Collection because of its 100% owned Baker-Shasta project in British Columbia's Toodoggone District where it has been focused on the gold-silver Shasta deposit. The Baker-Shasta project has a long convoluted history stretching back into the 1960s but it acquired a new focus in 2020 when a group headed by CEO Morgan Fletcher ended up in charge with the goal of rethinking the Shasta deposit as an open pit mining operation which could feel the Baker mill complex in the northwestern part of the project. As part of the transition from the previous group TDG had expanded the land position so that a series of connected claims traverses about 40 km of the 100 km by 30 km Toodoggone District where the partly mined out Kemess cluster of deposits now tallies nearly 1 billion tonnes of 0.2%-0.4% copper and 0.4-0.6 g/t gold. TDG has produced 3 resource estimate updates for Shasta, the latest in January 2025 featuring 27 million tonnes of 0.9 g/t gold and 32.6 g/t silver (781,000 oz Au 28 million oz Ag) indicated and inferred.
None of this impressed the market and the stock was stuck in the $0.10-$0.20 range with the treasury empty while some of the institutional shareholders squabbled about the proper focus for TDG. In January 2023 chairman Andrew French of the Gold 2000 fund stepped aside to make way for Stephen Quin who began to push for a broader focus that included assessing the copper-gold porphyry potential of the project. The gold-silver mineralization ranges from low-sulphidation epithermal which has a limited vertical extent linked to boiling zones fed by later stage dyke intrusions, and intermediate sulphidation epithermal mineralization peripherally related to the emplacement of calc-alkaline copper-gold porphyry systems. The stalemate ended abruptly on January 17, 2025 when Amarc Resources Ltd published results for its Aurora discovery.
The contours of the IP anomaly associated with the Aurora discovery suggest that the copper-gold mineralized zone projects onto the Baker-Shasta project of TDG Gold Corp. Historical exploration has focused on the Baker and Shasta epithermal systems while the copper porphyry potential has been ignored. The region's geology consists of Talka group volcanics and sediments overlain by Hazelton group volcanics and sediments. These in turn have been intruded by the Black Lake igneous suite which is believed to be the heat engine that formed deposits. The unconformity between the Takla and Hazelton is viewed as a major exploration target with the younger Hazelton rocks seen as less prospective. In the case of the Aurora system the mineralization is split between overlying Hazelton rocks and underlying quartz monzonite of the Black Lake intrusive suite. This configuration suggests that a later intrusion is responsible for mineralizing the Black Lake and Hazelton rocks. Amarc's technical advisor, James Lang, will give a technical talk at PDAC which will describe what they think is going on at Aurora. This talk will be well attended because everybody is curious about what caused the unusual gold enrichment at Aurora and what rethink exploration of the Toodoggone District should focus on.
TDG Gold Corp has the distinction of having part of the sulphide system that hosts the Aurora copper-gold mineralization on its 100% owned Baker-Shasta property. I say "sulphide" because the chargeability anomalies of IP surveys do not say anything about the presence of copper and gold but usually indicate the presence of iron sulphides. Drilling is needed to confirm that TDG has a copper-gold enriched portion of the Aurora system where the footprint so far drilled by Amarc and Freeport is 100-200 million tonnes which could contain 5-10 million ounces gold at 2 g/t if that proves to be the average grade. TDG's existing drill permits related to the Shasta epithermal system have sufficient flexibility to allow TDG to start drilling as soon as access conditions allow, usually late May which is when Amarc and Freeport would also resume delineation drilling.
What makes the Aurora discovery so intriguing is that it is located in a talus and scree buried valley flanked by Hazelton rocks whose ridgelines have at best yielded anomalous copper-gold values. The rocks are gossanous, meaning iron sulphides have oxidized, and while everybody checks out such color anomalies, there are lots of them in the Toodoggone District and most have no interesting gold-copper values. Amarc highlighted this area in 2022 but apparently did not conduct IP surveys until 2023 and made the NWG target the last IP target to be tested during the 2024 exploration season. Freeport has spent $33 million toward the $35 million it needs to spend to vest for 60% and apparently this vesting milestone will be hit before new drilling resumes in 2025. Given that everything found in the Pine and Mex trends of the Joy project has been below economic thresholds, the risk was real that 2024 would be the last exploration season funded by Freeport. Drilling the NWG IP anomaly was like pounding the last nail into the Joy coffin. But as soon as the first drill hole penetrated Hazelton rocks beneath the talus debris it was clear that it was intensely mineralized within visual evidence of chalcopyrite. Because it was late in the season Amarc added two rigs to drill as much of the Aurora discovery as possible. They probably knew with the help of XRF guns that the Aurora discovery had elevated copper, but until they got the assays the hope for gold was something similar to Kemess in the 0.4-0.6 g/t range. I suspect that when they got the assays the HDI team was shocked at the gold grades. Talk about a successful Hail Mary pass!
It's possible that the copper-gold grades fade away on TDG's ground, but the existence of the Shasta epithermal system several kilometres to the west has forced management to think about it in terms of being peripheral to a major blind copper-gold porphyry system underlying the Aurora discovery. Aurora finally persuaded everybody at TDG to accept Stephen Quin's push to explore for copper-gold porphyry systems. While the Aurora zone is open-pittable, the gold grades would allow such a deposit to be underground mined through block caving. An obstacle to looking at parts of the Toodoggone district buried under Hazelton rocks is that if Kemess style porphyries are the best the region can yield, the likely depth limiting open-pit mining would make the economics marginal. But with the level of gold enrichment at Aurora the depth would not matter. An analogy is the Oyu Tolgoi project Robert Friedland's original Ivanhoe Mines acquired from BHP in 2001. It had 438 million tonnes of 0.52% Cu and 0.25 g/t Au open-pittable which at the time was marginal at pre-China super cycle copper prices. But Friedland's team did geophysical surveys and discovered the 1.6 billion tonne Hugo Dummett deposit at underground mineable depths with 1%-2% copper grades. We do not yet know how big the Aurora system will scale, but because we now know that the Toodoggone District has what it takes to create copper-gold porphyry deposits with underground mineable grades, the entire district needs a fresh look.
In the case of TDG money has been a perennial problem but that changed on January 27 when Skeena Resources Ltd approached TDG with a financing proposal whereby it would buy at $0.50 the 14 million charity flow-through shares done at $0.825. It boosted its stake to 22 million shares by persuading TDG to acquire the Sofia property to the northeast for 8 million shares. TDG was also able to raise $4 million non-flow-through at $0.50 from other investors, loading its treasury with $15.5 million in working capital. TDG has not granted Skeena a board seat nor any rights to participate in future financings to maintain its stake because if drilling confirms an extension the company will need to be bought out by Freeport. With the money missing piece taken care of, which boosts fully diluted to 202 million shares and at Thursday's $0.57 close implied a value of $115 million, it was an easy decision to graduate TDG Gold Corp from the Bottom-Fish Collection to the Favorites Collection.
The Shasta project has a long history going back to 1972 which various majors optioned until 1989 when Mel Rahal's Sable Resources Ltd, owner of the Baker Mine to the north which went into production in 1979, consolidated the Baker and Shasta properties. Sable mined the Shasta deposit in 1989-1991 and 2008-2012 after which the project was dormant until 2017 when Rahal retired and Tom Obradovich took the helm and steered Sable into Mexico. The BC portfolio was sold in early 2019 to a shell called Talisker Resources Ltd which later that year acquired the former high grade Bralorne Mine. The Toodoggone portfolio ended up in a private company that included OceanGold as a shareholder. It merged with a CPC called Kismet Resources Corp in late 2020 renamed TDG Gold Corp. Under CEO Morgan Fletcher TDG undertook a campaign to redo the Shasta resource estimate for an open-pit mining scenario which would utilize the Baker mill infrastructure.
The Golden Horseshoe of northern British Columbia
TDG's Baker-Shasta project with location of Aurora discovery
Map showing relationship of Shasta Epithermal deposit to Aurora Cu-Au porphyry discovery
Map showing "exploration desert" in vicinity of Aurora discovery
