White Gold Corp (TSX.V: WGO; OTC – Nasdaq Intl: WHGOF; FRA: 29W): Owner of 40% of White Gold District of the Yukon, Canada, Interview with David D'Onofrio, CEO
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 9/30/2018
White Gold Corp (TSX.V: WGO; OTC – Nasdaq Intl: WHGOF; FRA: 29W) owns a portfolio of 21,218quartz claims across 37 properties in White Gold District of the Yukon, Canada, totaling 423,260hectares (approximately 40% of the district). This makes White Gold Corp the largest land holder in the District. We learned from David D'Onofrio, CEO of White Gold Corp, that recently they have announced two major high-grade discoveries near their existing 1.3 million ounce high-grade resource. Shawn Ryan, the company's Chief Technical Advisor, has 20 years of experience prospecting gold in the Yukon, which led to the discovery of the White Gold, Coffee, and QV projects [7.5M ounces Au]. According to Mr. D'Onofrio, they barely scratched the surface on the property that has huge potential for many more discoveries.
White Gold Corp., Yukon, Canada
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing David D'Onofrio, CEO of White Gold Corp.
David, Could you give our readers/investors an overview of the significance of the White Gold District in the Yukon and position White Gold Corp has in the White Gold District?
David D’Onofrio: Absolutely. Thank you for doing an interview on White Gold Corp. for Metals News.
With already two new high-grade discoveries this year, and our Vertigo target providing recent rock grab sampling results of up to 139.9 and 134.6 grams gold per ton, it is indeed a very exciting time for people to find out more about White Gold Corp.
The White Gold District is in the Yukon, Canada. It's the home of the famous Klondike Gold Rush, which occurred at the turn of the 19th Century. I think we've all seen the pictures of the prospectors panning the creek beds of the Yukon. The Gold Rush lasted about 2 years in its initial phase and the creek beds were so rich and full of gold they were recorded to have mined over 20 million ounces of gold by hand from their creek beds. Which is, as you know, an exceptional feat.
During the following number of years, there was not a lot of activity there and the area remained quite quiet until 2005 and onwards, when Shawn Ryan, who was born in Tiverton, Ontario and grew up working in the mining camps had moved to the Yukon for various reasons. Part of what he spent his time doing was prospecting.
And Shawn took a novel approach to prospecting, when he realized that that area of the world was unglaciated. So he discovered that there was a very high correlation between the elements in the soils and what was underlaid in the bedrock. And it wasn't necessarily always gold, he was able to find the pathfinder elements that correlated to gold in the bedrock below. Using that knowledge, he developed a very efficient soil-sampling methodology, which was actually developed, during his years as a mushroom picker. He became very famous. There's a great article on the cover of the New York Times magazine on his history and successes.
Gold Mania in the Yukon, NY Times: https://www.nytimes.com/2011/05/15/magazine/mag-15Gold-t.html
Using that technology he was able to find many prospective areas and he staked out a great percentage of the White Gold District at that time, probably 50% or so. With immediate success, using his technology, he was able to get a lot of interest from other mining companies. And he optioned off his properties to 10 or 12 different junior mining companies, who then raised the capital and did further exploration on these highly prospective targets.
Almost immediately, Underworld Resources was the first company to have success, with its discovery in 2010 of the Golden Saddle deposit which is now over a million ounces of high grade gold. By 2011 Kinross Gold purchased Under World for $140 million, which created a pretty wild staking rush, a modern-day gold rush up in the district.
Shortly thereafter, Kaminak, another company to whom Shawn Ryan had optioned his properties, had a major discovery, the Coffee Deposit. That company was just purchased by Goldcorp in 2016 for over $500 million. A great success! These assets together total over 7 million ounces of gold.
However, in the following years, with the down-turn in the junior mining market, many of these companies, to whom Shawn had previously optioned his properties couldn't afford to maintain the option payments. Shawn received back all of his initial claims and also the information from the exploration work that these companies had performed; together worth well over $25 million of work. Shawn then spent two or three years analyzing the data, cherry picking through the packages of claims, and reassembling the ones he thought were the best, all into one uniform land-package, with which he wanted to take a different approach. He also further refined his exploration methodologies taking advantage of his experience and the most modern technologies. This time around, he wanted to partner with one company, one group that was able to bring to the table capital, market access, sophistication and relationships with the major mining companies. So he approached us at the PowerOne Group, based in Toronto. PowerOne was founded in 2003 by prominent venture financier Pat DiCapo with a very impressive track record of success in mineral exploration. We knew and respected Shawn, as we had worked with him in the past. So when Shawn presented us with this opportunity, to become the dominant land-holder in the White Gold District, one of the most prolific gold regions in the world, we immediately jumped on it. Shawn rolled all of his properties together into a new company that we started together called White Gold Corp.
That company listed on the TSX Venture and we brought the idea of Shawn's opportunities to several major gold mining companies, with whom we had great relationships, to partner with us and financially back our exploration plan. Everyone with whom we spoke was very interested. We selected Agnico Eagle to be our partner, primarily due to their deep expertise in exploration companies and their knowledge of working in these type of districts. They purchased 20% of our company and became a 20% partner with Shawn and the PowerOne Group, and we started exploring this vast property package in the Summer of 2017.
Shortly after, we had discussions with Kinross, who owned the other Golden Saddle deposit in the area through their acquisition of Underworld Resources. Kinross was not being terribly aggressive exploring it, possibly because it was earlier stage compared to their other big projects on which they were focused. So we suggested partnering together. We could work on their Golden Saddle option, they could take back shares in our company and become a partner and also have access to the rest of our property. They really loved that idea, firstly because they believed very much in the potential of that district. Also, because we were able to assemble a team within White Gold Corp, which was directly responsible for all the major discoveries in the district, starting with Shawn Ryan. Additionally, we had hired Jody Gibson as our VP Exploration. Jody had worked with Shawn Ryan on the Underworld, Golden Saddle discoveries. He drilled out that deposit and probably spent more time working in that region as a geologist than almost anyone in the world.
The other key team member we brought in was Rob Carpenter who was a founder of Kaminak, which was sold to Goldcorp for $500 million based on their Coffee Deposit in the White Gold District. So with that sort of skill-set and team, we knew we would be better equipped than anyone else to advance the property forward, which I’m pleased to say we have.
Also unique is, over the number of years Shawn was analyzing the data, he had spent a great amount of time and money refining and making the exploration approach more efficient and less expensive. He implemented a new program called Drones for Drills. He'd start by using air-borne drones to scout the areas, to look for optimal locations to perform the soil sampling. Then he would use his soil sampling technique with his well-trained crews, knowing that there was a very high correlation between the elements in the soils and what was underlaid in the bedrock. It wasn't necessarily always gold, but he was able to find the pathfinder elements that correlated to gold in the bedrock below. Using that knowledge, he developed a very efficient soil-sampling methodology. From there, we found success in the soils. Replacing trenching techniques, he instead would deploy a probe underground, a much more efficient way to get to the bedrock and complete sampling. It's also extremely environmentally sensitive, and so the First Nations, with whom we have worked closely with, have really, really liked this approach.
When successful in those first three phases, we then use rotary air blast drills to drill the first 100 meters from surface, a very cost-effective method of doing so. We knew with these types of deposits in an area is so virgin, with so little work having been done to date, we could make our first pass looking right on surface. Our first two big discoveries were based on the data and the evidence that Shawn had seen on these properties. He also believes there's a high probability of having several more of these discoveries in the future. This is a cap and these deposits can run very deep, but we decided to start looking for the low hanging fruit.
With all these new approaches we were able to perform efficient exploration at only one third the cost of what historical exploration has cost in the Yukon in less time. That is one reason we were able to really attract the attention of the majors.
It wasn't just us and the majors that took a liking to this area. Almost every major mining company now has made some sort of investment in the White Gold District. I think most of these companies now are really favoring stable jurisdictions, like Canada and the Yukon, for their investment. These regions are pro mining and much less hindering, compared to other less stable jurisdictions around the world.
We have a very strong balance sheet and great partners. Our partners support us financially and, more importantly, technically, opening up their entire resource pool of experts to work with us. We completed some preliminary exploration last year in 2017 but we have really deployed a full exploration program this year. We're starting to see the results now and have been extremely pleased with what we've been seeing.
We've announced two discoveries already, with one only 2 km to the west of our existing 1.3 million ounce high-grade resource. It's a long trend, and there has been very limited exploration completed between this new discovery and our resource to date. We are very excited to see what we're going to find in between the two discoveries.
Our other discovery, which we just announced this week was on the JP Ross property. It's about 25 km from our existing deposit, and it also happens to be right on the road. The Yukon government has good existing roads, another reason the Yukon is such a great place to work. The territorial and federal government, announced last year that they're going to be investing $360 million to upgrade the roads in the Yukon specifically to support the mining industry. This is a game changer! The major part of that investment is going to construct a highway from Dawson right down to Goldcorp’s Coffee Deposit; which Goldcorp announced their planning to have in production by 2021. That road runs right through a lot of our properties including our JP Ross property. That property has our Vertigo target where we've hit bonanza grade gold, and only on the first part of our drill campaign. We have many other holes on this target still to come.
We're very excited about the Vertigo target, as we're talking results of over 50 grams per ton at a three-meter interval and within a broader intercept within 10 meters with 17 grams per ton. In another hole we hit 45 grams per ton on a three-meter interval, which was part of another broader intercept of 17 meters, with over 19.5 grams per ton.
And even more recently at Vertigo, we had rock grab samples of grades up to 139.9, 134.6 and 132.9 grams per ton over a 685m strike length. With results from the samples averaging 28.7 grams per ton, with all this along a 1.1km strike. We have also hit grab samples greater than 40 grams per ton over 4 km away on our suspected target. This is extremely significant. Due to the unglaciated nature of the area as these should be representative of the bedrock below. On the back of this success we have staked all the open ground in the contiguous area and purchased our neighbors as we think this is a large high-grade mineralized system.
So this is a virgin discovery in a brand new area, on one of the properties that we think had the highest probabilities for success. This was based on the evolution of data that we were able to receive from doing our soil sampling, the drones, the probe, the structural work, which we've used IP resistivity, and this year we introduced Lidar, a brand new technique in this area. Lidar uses lasers to see the bedrock structure and which was very effective due to the unglaciated nature of this area. We've really added a lot of science into the exploration of this area, and we are seeing great success!
Vertigo is a brand-new virgin discovery in Canada, in an area that has some of the richest creek beds in all of the Yukon. Some people think that the original source of the Yukon gold rush could have come this area. It was actually the subject of stories of famous authors in fact. So we're extremely excited. It's early days, but we are continuing, very actively, to explore the area. I eagerly await the additional results that will unfold as we continue along.
Dr. Allen Alper: I think the job you and your team have done is amazing. Great location, great properties, you've been able to get great backing from very strong companies. I'm very impressed with what you and your team are doing. That's excellent.
David D’Onofrio: Thank you very much. Yes, it's a bit of a dream situation for it to have been able to come together the way it did. We're extremely fortunate and glad that we were able to have things work out the way they did.
Dr. Allen Alper: That's excellent! Could you tell our readers/investors a bit more about your background, your Team and your Directors?
David D’Onofrio: Certainly. I'm actually a Chartered Accountant by background, and I’ve worked with PowerOne Capital for almost a decade. We're a merchant bank based in Toronto, and we've been financing junior exploration companies for almost 15 years now. We've fortunately had a very strong, successful track record of backing, first and foremost, the right people, the right jurisdictions, and looking for the right commodities over those years.
We were early backers and instrumental with a number of successes such as Aurelian, which Kinross bought several years ago for a billion dollars. We were very involved with the incubation of Continental Gold, which has probably one of the highest grades and largest undeveloped assets in the world. It is in Colombia, and a phenomenal asset. Newmont came in as a big partner, so that's a great sign of validation and they're actively trying to put that asset into production; it's an incredible opportunity. We've also done work in Africa, including our involvement with Auryx Gold, which was acquired by B2Gold a number of years ago. That's now a full mine and it's actually the largest revenue producer in Namibia.
We've really been active across the World and we have done a number of other things. We've been involved with Waldo Perez in creating Lithium Americas, and since then on a second foray, in creating Neo Lithium Corp, which has the fourth largest undeveloped lithium mass in the world, with the second or third highest grade and great chemistry. We're very excited to be their shareholders.
The White Gold Corp opportunity is a bit unique. Usually we don't act directly as management as we have in this, but the situation here allowed it because of Shawn Ryan. He set us up with a hundred person tactical team in the Yukon. He's able to manage the on-the-ground operations and does that along with Jody Gibson, a part of our team now, who's overseeing that. We are in Toronto managing the capital market side of the business. As a team, we manage the company by committee. But each of our groups is able to focus on areas in which they have specialized expertise. That's worked really well so far.
Dr. Allen Alper: That sounds excellent. That's very good. Could you tell our readers/investors about your capital structure? I think it's quite impressive.
David D’Onofrio: Kinross and Agnico both own about 19.9% of the company. Management and insiders own about another 25 to 30% of the company, maybe a little bit more.
We've done two raises in the last couple of years of $10 million each. The majority of the rest of the flow would have been through that, and some early investors that came in as strategic partners early on.
We're pretty fortunate to have such a strong capital structure.
Dr. Allen Alper: That sounds excellent. It shows that the team has skin in the game and you've attracted very important and very knowledgeable companies to back you up. So, that's excellent.
David D’Onofrio: Thank you very much. We're quite pleased how things have gone along so far and very excited by our prospects. We believe the opportunity here is to be early movers, with the dominant position in an area that has the potential to be a major mining camp. Our dream is that we're going to be the owner of 40% of a district that's going to evolve into something like the Timmins Camp. What's that worth, right? I can't even start to fathom the value of that. And I think that's what these other major companies see as well. For whatever reason, this area of the world has been overlooked for a little while, but no longer. Everybody's trying to get a piece of this pie, as it were.
Dr. Allen Alper: Right, excellent! What are the primary reasons our high-net-worth readers/investors should consider investing in White Gold Corp, David?
David D’Onofrio: Yes absolutely. We have the largest land package by far. And it's not just the size, it's also quality. Shawn Ryan's been up there for almost 20 years and it has been his back-yard. He's picked over and hand selected what he felt were the best, in a very prolific gold camp that is in its very early days.
It's caught the attention of all the majors in the world, and we're just scratching the surface here literally. There have been two major deposits discovered in the recent years and both right from the surface. Additionally, all the people that were involved in those discoveries are now with our company, and our land package has had probably over $90 million of exploration work completed, between ourselves and the predecessor companies that started working on the area earlier. And our team believes, based on the package we have, and the work that has been done, that there's opportunities for many, many more, of these high grade near surfaces discoveries.
So I think the 'blue-sky' potential is almost unlimited. As a company we also have a very high-grade deposit that is growing, that can act as a value base for ourselves. Based on that alone, we're probably trading at only $60 or so an ounce. That might have changed in the last couple of days. The last take-out in that area was $175 an ounce, so we're trading at a huge discount to this one asset, without giving any value at all to this incredibly prolific land package we have, on which we have seen a lot of success.
We've announced one discovery so far at the Ryan’s showing on trend with our Gold Saddle deposit, which is a 2km step out, on the White Gold property. We've announced a major discovery on a virgin property which we think has incredible potential. We have done a lot of work and are waiting on the results. There could be many more to of these to come on our 30+ other properties on which we have identified various targets, at various stages. For example, we are also drilling some targets that are on trend with Gold Corp’s Coffee deposit. And many other around our existing deposit. As the saying goes, the best place to find a mine, is near an existing mine….
Dr. Allen Alper: That sounds excellent. Very strong reasons for our high-net-worth readers/investors to consider investing in White Gold Corp.
David D’Onofrio: Thank you. Stay tuned. We've been very busy. We probably have one of the most active exploration programs out there this year, and we've access to great capital and great partners between Kinross and Agnico and our capital markets partners in Toronto. We've done a lot of work and the results are literally just started to come in. We should have lots of news flow from now for quite some time. If things continue the way they have been, we should be able to produce more great results. We're very optimistic about the opportunities here.
Dr. Allen Alper: That sounds excellent. We’ll publish your press releases as they come out so our readers/investors can follow your progress.
https://whitegoldcorp.ca/
David D’Onofrio
Chief Executive Officer
White Gold Corp.
(416) 643-3880
ddonofrio@whitegoldcorp.ca
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