John McConnell and Tara Christie are the Yukon mining power couple. The husband and wife are both presidents and CEOs of Victoria Gold (TSX: VGCX) and Banyan Gold (TSXV: BYN; US-OTC: BYAGF), respectively.
Victoria has the territory’s only producing open-pit gold mine, the heap-leach Eagle mine about 275 km east of Dawson City, which posted record first-half output this year. Banyan’s Aurmac project, about 40 km from Eagle, has 312.9 million tonnes grading 0.7 gram gold per tonne for 6.2 million inferred oz., according to a resource update in May.
Both sites are part of the Tombstone Gold Belt that arcs across the Yukon including projects held by investor darling Snowline Gold (TSXV: SGD) in the east through Sitka Gold (CSE: SIG) to Kinross Gold’s (TSX: K; NYSE: KGC) Fort Knox mine near Fairbanks, Alaska in the west.
“If you were to draw a 50-km circle around us, the area would already have 20 million ounces in gold-equivalent resources, which is pretty, pretty exciting,” Christie said in an interview with The Northern Miner during site tours in July.
“It’s tough to explore in the Yukon because the exploration season is short,” McConnell said in a separate interview. “But the opportunity is that the Yukon is very under-explored.”
The two are long-time northerners steeped in mining culture. British Columbia native McConnell has been in the business for more than 40 years across the north for companies such as De Beers, Western Keltic Mines and Breakwater Resources. He’s held the Victoria Gold posts since 2010.
Christie spent summers in the Yukon from age seven. The youngster and her slightly older brother once panned 16 oz. of gold in a season. She later became a geotechnical engineer and geologist, ran a private placer gold mining company, worked a spell at Newmont (TSX: NGT; NYSE: NEM) in the North and started a consultancy.
Now she’s running Banyan with its 173-sq.-km Aurmac property. It has three inferred-level deposits, Powerline with 3.4 million oz., Aurex Hill with 1.4 million oz. and Airstrip with 897,000 oz. on moderate topography connected to hydro and a highway that goes to Hecla Mining’s (NYSE: HL) Keno Hill silver operation next door. Banyan is considering how the project could be developed, likely around the same $500-million capital cost as Victoria’s Eagle. If it stays unacquired that long, Christie says.
“There’s about a 25% chance that Banyan is bought by either Hecla or Victoria Gold, it’s a 25% chance somebody will buy it as a standalone and that’s based on incoming interest. And there’s a 25% chance that somebody will come in and buy Victoria and us.”
Chances of going it alone are just 5%, she says. But, like other junior miners in the region with a strong resource and drill results such as Sitka Gold, Banyan faces a tough market to raise capital. It appears like Snowline is siphoning most of the interest, including a $19-million investment from B2Gold (TSX: BTO) and a surging stock.
“There’s a general disdain for mining these days,” McConnell said. “And precious metals companies in particular have not been good at creating shareholder value. So, you know, investors are looking at other areas to invest their money.”
Victoria’s backers include GMT Capital with 9.9%, Sprott Asset Management with 6.9%, fund manager Van Eck with 5.5%, CI Investments at 5.4%, Fidelity Investments at 4.8% and the Franklin Gold and Precious Metals fund with 4.4%.
Investors in Banyan include Victoria at 11.3%, Osisko Development (TSXV: ODV; NYSE: ODV) at 4%, Franklin with 9.8% and Fidelity at 7.4%. Other institutions and high-net-worth individuals hold 30% and retail investors also have about 30%.
“Not getting tremendous recognition in the market for having a very significant deposit is definitely one of the challenges, not wanting to burn up cash is another,” Christie said. “There are people waiting for our metallurgy.”
Banyan has $11 million in the bank after completing this year’s 25,000-metre phase one drilling program. Assays reported on July 19 included drill hole AX-23-415 that cut 37.4 metres grading 0.82 gram gold per tonne from 103.4 metres depth; and AX-23-429, which cut 18.5 metres of 2.22 grams gold from 182 metres.
“That was important for us to show that this [mineralization] is continuous between Powerline and Aurex Hill,” she said. “The key difference between us and [Snowline] is they found their intrusion. We’re still in the rocks that the intrusion is leaked out into. We’re in the metasedimentary host.”
Banyan is poised to drill perhaps another 10,000 metres in phase two this year and conduct geophysical work to try to locate the intrusion, Christie said. The company is exploring design options that might include a higher-grade Powerline pit of 0.95-gram ore for 2 to 4 million ounces of production. It intends to have a flow sheet and more results on recovery levels by late autumn, the CEO said. So far, they’re showing a 90% average.
Still, Christie says it’s too early to start a preliminary economic assessment, which is required by the end of 2025 for full ownership of Aurmac from Victoria, plus $2 million in cash or shares.
“We’re not there yet. We actually think we’ve got a lot more room to grow and add ounces to this deposit as well as grade,” she said. “There’s no rush for me to earn 100% because if I can get my market cap up, that’s less dilutive and I can pay them in shares.”
Over at Victoria Gold’s Eagle mine, the company is bouncing back from missing output guidance last year. For the first six months of 2023, it’s posted a 47% increase over the same period last year, producing 83,188 ounces. Victoria was hit by COVID issues such as high worker turnover and repair delays. The company, which began production in July 2020, responded with more emphasis on recruitment, retention and preventative maintenance.
“The two quarters this year we exceeded our guidance,” McConnell told The Northern Miner in an interview at the mine. “We’re in the penalty box because we missed guidance last year, and we’re undervalued. When you look at us compared to our peers, we trade at a lower price to net asset value and once we demonstrate that Eagle will run at plus-175,000 oz. per year heading towards 200,000 oz. per year the share price will be re-rated.”
Victoria is also considering the longer-term prospect of the Raven deposit, discovered 15 km east of Eagle in 2018. A first resource last year estimated it at 20 million tonnes grading 1.7 grams gold for about 1 million oz. contained metal. Assays reported in January included 83.5 metres grading 3.59 grams gold per tonne starting from 213.5 metres. Victoria is drilling 20,000 metres at Raven this year.
Maybe Raven, across a valley from Banyan, could be developed one day with a mill near both operations, Christie says. But kitchen table talk at the McConnell-Christie house doesn’t dwell on M&A, she says.
“Victoria and Banyan have taken a lot of steps should Victoria feel it’s the right time to make an offer to Banyan. They have independent directors in place and they’re responsible for that,” she said. “My job is to make sure that there are competitors for and when that happens.”
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