G2 Goldfields (GTWO) - High Grade Gold Focus and Timing Market
G2 Goldfields Inc. (formerly known as Sandy Lake Gold) is a gold exploration company listed on the Toronto Stock Exchange (TSX: GTWO) and the OTC markets (OTCQX: GUYGF). The company is focused on the discovery of large-scale high-grade gold deposits in the Guyana Shield. G2 Goldfields are the founders of the Oko Aremu District along with the old Peters mine in the Puruni District. The company has made significant high-grade discoveries in Guyana, South America.
Matt Gordon caught up with Dan Noone, CEO, and Director, G2 Goldfields. Dan has over three decades of experience in mineral exploration and development. Dan currently serves as the Chairman at GPM Metals Inc. He is also a member of the Institute of Australian Geoscientists (AIG). Dan has previously worked with Rio Tinto in Papua, New Guinea, Newcrest in Indonesia, Homestake in Peru, and Veladero in Argentina. His educational credentials include a degree in Geology from Ballarat University and an MBA from Melbourne University.
G2 Goldfields is focused on exploring Tier 1 assets with high-grade deposits. The company has claims within Guyana and the northwest Ontario region. The company plans to acquire larger properties on the district scale that would offer a series of orogenic gold deposits over porphyry reserves.
G2 Goldfields has been exploring the high-grade gold mineralization at the Oko deposit. It is currently on hole 86 as the drill program continues. The company's strategy is to build a high-grade mineral resource at the Oko Project, leading to a potential resource-level update and a potential PEA (Preliminary Economic Assessment), transforming it into a mid-tier mining company. The company plans to achieve this goal while continuing the exploration with minimal costs and dilution.
Its most recent drill program demonstrates the potential for mine-building. The company currently has 1 rig operational on the site and plans to add a second drill rig within the next 2 weeks.
As per the drill update, the company now has a mineralization model striking northeast where high-grade shoots plunge into the southeast. This model was tested and high-grade mineralization was found in all directions. Additionally, the company discovered the presence of 6 shears. It plans to utilize 1 rig for consistently stepping out and gradually infilling, leading to the development of a resource. The second rig would be employed to test further out, down-dip, with a focus on 3-4 adjacent targets within a 500m range. This development has taken place within the past 6 months through extensive mapping and soil sampling.
Following the drilling operations in 2020, the company uncovered the system and the geometry of the deposit was unclear. Presently, it is stepping down as quickly as possible, adding ounces from high-grade shoots and stretching the deposit along the strike length.
G2 Goldfields currently has $2.2M in cashflow along with $1.5M in warrants that were exercised in September. An additional $800,000 in warrants are due by the end of October. The company plans to spend $2M on exploration and drilling operations by Christmas 2021. It plans to either raise additional capital in 2022 or slow down operations. However, the current exploration program is being executed as quickly as possible.
The drilling program with the addition of a second rig is targeted towards putting out an initial resource by the end of 2021 or early 2022. This resource will focus on the size of high-grade mineralization that is open in nature and has the potential for growth. The company is focused on targeting the high-grade deposits present on the surface, enabling it to develop a profitable operation in the early years.
The company currently has a market cap of $60M-$65M. G2 Goldfields is focused on reducing the capital cost of the project while continuing its drilling operations.
G2 Goldfields has explored 86 drill holes so far and has found 900m of the main zone along with shear zones consisting of coarse veins striking north-south. There are 5 repeats of the shear with a possibility of a 6th shear. These long linear panels feature high-grade shoots under development that are plunging steeply towards the southeast. The plain is folded from north to south, and the closing of the fold thickens while the thinner end features 4 limbs. The thickest width features 9m of 11g, while the thinner portion is 1.5m-2m in width.
The company has 5 plains, drilled half in length so far. It is carrying out an 80m step-out on shear 5. Shear 3 has the most peer points in this deposit. The mineralization here dips 20 degrees towards the northeast, controlled by the plain of F1 folding. The second folding has developed high-grade shoots that are concertinaed, moving towards the southeast.
The shears 3, 4, and 5 feature higher-grade reserves, while shears 1 and 2 feature low grades. Shear 5 was uncovered by drilling through shear 3 and 4, while shear 6 is being targeted by drilling through shear 5. Presently, the company is primarily targeting higher-grade shears.
G2 Goldfields is looking to grow the resource at its peak capacity before opting for a PEA. The company is focused on gaining a deeper understanding of the geology to build high-grade, along-strike, down plunge, and parallel zones. It has hit high-grade mineralization within close range to the high-grade deposits at the Oko Project. This area will be targeted by the second rig. The company also has satellite zones that feature similar geology and high grades as the main deposit. This area is under planned expansion. Additionally, the company's Minoko zone would further double the expansion potential of the deposit.
Based on the exploration findings, the company expects this project to be a multi-Moz district. The deposit features continuity as the system extends 2.5km south out of the Oko project along with another extension of 2.5km-3 km in the south. This district wasn't explored until 2019 when G2 Goldfields commenced its operations. The company expects to discover additional high-grade deposits towards the northeast of the Oko project.
Targets 2021 and Beyond
The company is looking to continue the exploration and resource expansion until Christmas in an attempt to make new discoveries. It also plans to raise capital based on the gold market movement that will enable it to enter the next stage of its operations. The company is looking for the ideal transaction window to add value to its shareholders.