NewGold-Blackwater can't find where the end to its gold deposit.
The company's president and CEO Robert Gallagher was up at the exploration site on Tuesday as drill rigs and geology crews crawled across the landscape testing for gold. The boundaries have been established on three sides, but it has yet to be found on the north side of their project where the gold runs out .
They also don't know exactly how deep the deposit goes into the bowels of Mount Davidson, 110 kilometres south of Vanderhoof. Gallagher had to put a stop to one extraordinary test hole 600 metres deep that was still showing indications of gold at that depth. Most test holes cut a core sample 400 to 500 metres deep.
A core sample is a three-inch cylinder of rock pulled straight out of the earth, then broken into sections and catalogued sequentially in samples for lab analysis. Each core sample shows a cross-section of the mountain's underground composition. Drill enough of these, in precise order, and computers can render the data into a reliable picture of the layers underfoot, including its valuable minerals. Mount Davidson has a bit of zinc, a fair amount of silver, and a whopping amount of gold according to the core samples extracted by NewGold.
Gallagher said the Blackwater site was a low-grade producer, meaning that the gold was dispersed widely amongst the common rock and dirt of the mountain, but that was offset richly by the sheer size of the deposit. The reason Gallagher and his management team stopped the 600-metre-deep experiment was, they had a schedule to keep looking for the north edge.
"We are going to drill 200 kilometres of core this year," Gallagher said. "This is easily the biggest exploration program in B.C., maybe in Canada."
The site has 19 drill rigs working around the clock cutting core samples (each 500-metre cylinder takes two to three days at this site), plus two more drill rigs on an alternate test area - the Capoose site - about 35 kilometres down the mountain to the west.
"We have to keep stressing, we are not a mine, we have a long way to go before we are a mine," Gallagher said. The environmental assessments have not even begun, and although relationships have been built with three First Nations affected by the NewGold-Blackwater project, no formal contracts have been signed.
Nonetheless, the exploration activity alone has turned the Vanderhoof area into one of the mine capitals of B.C. in the past two years since exploration on Mount Davidson got going. NewGold has about 85 of its own employees at the Blackwater site, plus another 160 or so hired on a contract basis.
NewGold is spending about $100 million this year on the drilling and analysis alone. In all of B.C. last year, the amount spent on mining exploration was about $400 million.
The Vanderhoof economy is shining brighter thanks to unprecedented investment by NewGold. On Tuesday the mining company opened its project headquarters for the Blackwater exploration site, following the June 4 opening of NewGold's geology laboratory in Vanderhoof.
"Instead of sending our core samples to Vancouver, we only have to transport as far as Vanderhoof," said NewGold boss Robert Gallagher. "The analysis centre we've opened here will employ about 40 people."
NewGold estimates it will drill about 200 kilometres of core this year.
"We have more drills working this site than any other I've ever worked on, by far," said NewGold's senior geologist Brian Bower. "We're bringing in more than 900 metres a day of core sampling. It makes for a lot of lab work."
This sort of gold isn't like the caricature of the old prospector panning for nuggets. Only about once a month do the geologists at the Blackwater site see the literal glint of gold in the samples they cut from the earth. The gold exists within the other earthy materials at a rate of about one part per million.
"The gold is tied up in the sulphides, so we look for the sulphides," Bower said. The samples cost about $180 per half-metre to analyze.
Watch the Citizen in the coming days for more on the New Gold-Blackwater development.