Auriga’s fresh take on an old mine

Auriga Gold (AIA-V) is putting its faith in Manitoba’s Flin Flon greenstone belt, as the company fast-tracks its Maverick gold project into production.

And while Auriga’s president and chief executive Richard Sutcliffe says the company has an eye on becoming a regional player in the area, it was a deal that was too good to pass up that first brought the company there. 

That deal was made with Barrick Gold (ABX-T, ABX-V), which deemed the project too small for its lofty ambitions, and agreed to sell it to Auriga for $2.5 million in cash and $1 million in equity. Barrick still holds those shares. 

For that price Auriga secured not only the past-producing Puffy Lake mine with a large but non-National Instrument 43-101 compliant resource and plenty of exploration upside, but also a largely unused mill. 

The good condition of the mill is due to its previous operator, Pioneer Metals, only running it for over a year before declining gold prices combined with lower-than-expected head grades shuttered the mine.

“The mill is in excellent condition,” Sutcliffe says. “It was built new in the late 1980s, operated for less than 18 months and then was mothballed… the biggest part of
rehabilitating it is the re-wiring that needs to be done.”

And while rejuvenating Pioneer’s mill is part of the plan, following its mining methods isn’t. 

Where Pioneer mined gold at Puffy Lake exclusively underground, Auriga believes that it can begin mining via a lower-cost open pit.

The company recently launched phase two of its drill program, which will see 32 holes testing shallow, near-surface veins with the intention of outlining an open-pit resource. So far, the company has drilled eight holes with assays  pending.

But before it even began testing for shallow mineralization, the company investigated what the site’s past producer had said to be underfoot. 

Auriga recently wrapped up a surface drilling program which aimed at confirming the historic resource at the project of 1.3 million “probable” tonnes grading 8.57 grams gold and 833,700 “possible” tonnes at 7.15 grams gold. The estimate was compiled by Kilborn Engineering in 1993. 

While results from seven holes out of the program are still pending, the market nodded its approval of the recently released assays. 

The latest results from the confirmation program were released
on March 24 and were highlighted by 30.44 grams of gold over 2 metres. The news sent Auriga shares up 10% or 3¢ to 32¢ on a heavy volume of 1.5 million shares.

The intercept dovetailed nicely with results from earlier in March, as both intersected parallel zones
of high-grade gold mineralization.

Another hole returned 9.19 grams gold over 2 metres. The company says that all five holes for which
assays were returned intersected gold mineralization.

Maverick lies in the Flin Flon greenstone belt of central Manitoba and sits roughly 65 km northeast of Flin Flon. The belt is considered to be one of the world’s largest volcanogenic massive sulphide districts, hosting copper, zinc and gold deposits.

Sutcliffe believes that if all goes well, production could be achieved at the project within 18 months. 

While he envisions a mine that would produce 50,000 oz. gold per year, he says ore mined at Maverick wouldn’t be enough to operate the mill at full capacity. For that, he says, the company will look to do custom milling for other miners in the area. 

It’s a possibility that is supported not only by the number of small deposits in the region, which could be looking for milling capacity in the near future, but also by the sound infrastructure Puffy Lake is blessed with. The mine is accessible year-round by a road and is situated just 5 km from a rail line.