Big backers see promise in Nunavut gold

BG Gold, flush with $8.2 million in a new private capital raising from major industry investors, is preparing to drill this spring at its Whale Cove project in Nunavut.  

The private company, owned by London, U.K.-based finance firms Bacchus Capital and AG Gold Investment, plans 8,000 to 10,000 metres of drilling at the project’s Vickers deposit, where historic exploration dates back to the 1960s.

“We pulled together this collection of highly credentialed (and) experienced people in the industry to help us (with) their investment and expertise,” Bacchus Capital and BG Gold chair Peter Bacchus told The Northern Miner in an interview on Friday. “It’s a very big holding. It’s under-explored. It has some pretty racy historic intercepts in a highly prospective region.”

Backers include Glencore (LSE: GLEN) founder Pinkie Green, Harmony Gold (NYSE: HMY) founder Ted Grobicki, former Gold Fields (NYSE: GFI) executives Brett Mattison and Tommy McKeith, and Andre Liebenberg, the CEO of physical uranium holder Yellow Cake (LSE: YCA). The US$1.5-billion-market-cap uranium company was founded in 2017 by Bacchus.

The Whale Cove financing, which took place over December and into early January, makes BG one of the few private explorers to hunt for gold in Nunavut, a remote and infrastructure-poor territory that presents many challenges for resource development.

Vickers is the main target in the 781-sq.-km project previously known as Pistol Bay. In the mid-1980s, exploration picked up at the site when Inco drilled an intercept that returned 149.8 metres grading 2.55 grams gold per tonne.

Northquest bought the project in 2010. According to a 2016 initial resource, Vickers hosts 7.7 million inferred tonnes grading 2.95 grams gold per tonne for 739,000 ounces.

Almost a decade ago, Russian miner Nordgold acquired a stake in Northquest and did further drilling that more than doubled the resource. In 2020, it reported 22.3 million inferred tonnes at 2.2 grams gold for 1.5 million ounces. Nordgold had raised its stake in the project to 100% when BG bought it in 2022. BG hasn’t disclosed the purchase price, but Bacchus said its capital raising would value Whale Cove at more than $40 million.

Down-plunge target

About 46,000 metres in total have been drilled at Whale Cove and 30,000 metres at Vickers, where BG seeks to explore more at depth.

“Our analysis is, we think there’s the potential to explore or to centre the program around high-grade material down plunge and down dip,” Bacchus said. “The previous owner was focused on establishing large open-pittable resources. The geological work we’ve undertaken… suggests an alternative approach to test that high-grade material in some of those racy intercepts will be an interesting thing to do.”

The company has brought on David Reading, former chief geologist at Randgold Resources as chair of BG’s technical committee. It has designed the exploration program to test and confirm the down-plunge extensions of high-grade mineralization. This year’s program will also focus on reassessing existing and potential exploration targets in the region.

Bacchus says the program could help upgrade Vickers’ resource but isn’t likely to happen this year. Depending on the progress of exploration, he said it might make sense in the future to return the project to the public market. 

“We want to see how we track with the results this year and see what markets are like and how the costs stack up,” he said. “I think we’re benefiting in that there’s limited competition. Juniors are quite cash-poor at the moment. Public markets are quite tough. It gives us a great opportunity to make a good run of it this year.”

Whale Cove is located near the namesake hamlet in the Kivalliq region on the west coast of Hudson Bay. The project is about 80 km south of Agnico Eagle Mines’ (TSX: AEM; NYSE: AEM) Meliadine gold mine.