A John Hancock and Gavin Rezos backed gold explorer has recorded the best gold intercept to date from its flagship 665km2 Hook Lake project in Canada’s Nunavut, with Manhattan Gold Corporation (ASX: MHC) hitting 7.62m at 18.67g/t Au from 85.34m with an incredible intercept through the main shear zone that returned 41.15m at 4.66g/t Au from 83.82m. This came from an area that had previously returned 22m at 2.41g/t Au from 100m, showing significant potential upside in historic estimates, and has beaten the previous best assay of 52.78m at 3.38g/t Au from 89.22m. Additional near-surface mineralisation was hit with 9.15m at 1.73g/t Au from 35.05m, including 1.52m at 4.13g/t Au, while down-dip continuity of mineralisation through a historic footwall vein was also confirmed with an intercept that hit 9.15m at 1.99g/t Au from 153.92m. MHC has drilled 3,000m so far across 13 holes, with further assays imminent from Jaws while the rig is now drilling at the high-grade Spectre polymetallic VMS target, which contains previous outstanding assays such as 10.51m at 2.91% Cu, 6.70% Zn, 95.67 g/t Ag, 1.04 g/t Au and 0.48% Pb from 41.76m, as well as 13.71m at 1.51% Cu, 2.06% Zn, 47.23g/t Ag, 0.56g/t Au and 0.09% Pb from 70.26m. These have been hit inside of a 1km mineralised footprint that sits within a 7km corridor, and are interpreted to be part of a feeder system – which is extremely exciting given the typical nature of VMS’ to form in clusters and the litany of them in Canada. Spectre hasn’t been drilled below 60m vertical depth or since 1974, and it has exciting similarities to the CAD$3.8 billion McIlvenna Bay project’s 38.6Mt at 2.02 CuEq% resource – and MHC has significant modern information advantages that it is utilising in the current drilling campaign. Call options on gold are exploding as the precious metal almost touched US$4,700/oz today, up from around US$4,000/oz just a month ago, and Goldman Sachs sees further upside from its US$4,900/oz end of year forecast – while copper prices continue to rage through new all time highs around US$14,300/t.
The assays currently pending have targeted some of the key extension areas across the 3.3km trend Jaws, of which a historical non-JORC resource of 285koz at 2.38g/t Au is contained within a 940m section – and MHC’s $15 million market cap is not reflective of the critical factors that drive value creation in this calibre of explorer. The extensive historical dataset combined with modern exploration provides MHC with a solid foundation to build on existing drill-defined areas of mineralisation (Jaws, Spectre), while chasing major discoveries that have all the right signals (Omega, Quantum and Lotus). Hook Lake is situated in a world class group of Archean Greenstone Belts in Canada, which host monster deposits such as Agnico Eagle’s 8.34Moz at 4.52g/t Au Meliadine Mine and its 8.86Moz at 5.74g/t Hope Bay Project, as well as B2Gold’s 9.2Moz at 6.04g/t Au Goose & George Project. Spectre is excitingly similar to Eldorado Gold Corp’s (NYSE: EGO) 38.6Mt at 1.19% Cu, 2.18% Zn, 0.41g/t Au and 14.4g/t Ag (2.02% CuEq) Canadian project, which is almost finished construction and was recently taken over for CAD$3.8 billion in the acquisition of Foran Mining Corporation (TSX: FOM). Its resource base is contained across 5 lenses, some of which are stacked – and there have so far been three stacked lenses identified at Spectre that are up to 20m thick.
At 3.6x the nearest intercept, the 192 gram-metre result of the 41.15m at 4.66g/t Au is impressive overall, but the intervals within it are definitely encouraging as well. While the 7.62m at 18.67g/t Au high-grade core accounts for around three quarters of the hole’s contained gold, the remaining 33.53m still averages 1.48g/t Au on a residual weighted basis – implying a very high-grade shoot inside a materially mineralised envelope. This hole was also drilled against the mineralised zone, allowing MHC to better understand the true potential width of the system. MHC also pulled out a widely mineralised hole of 79.25m at 0.78g/t Au including 33.53m at 1.04g/t Au and 9.14m at 2.54g/t Au, which can be interpreted as a broad mineralised hydrothermal envelope with high grade shoots – and it left a deeper target completely open that has now been drilled and is awaiting assays. This was also the intended first hole of the program, which allowed MHC to identify a 20-30m difference in main shear location compared to historic estimates, which means this hole likely passed close to the targeted high grade cores – rather than right through them.
This new standout hole delivered from the historical resource at Jaws was drilled southeast across the steeply northwest-dipping system, while the historical hole was directed northwest and was effectively down-dip. MHC has also been able to reposition the main shear around 20-30m northwest of the historical reconstruction, creating a materially stronger structural model for targeting the high-grade shoots. The IP surveying at Jaws has shown resistivity because of quartz veining – which has been repeatedly proven to be gold-bearing at excellent grades – as well as the silicification and alteration of host rock, while the strong chargeability stems from disseminated pyrite and arsenopyrite in the system – so MHC’s system for targeting mineralisation is already based on a well understood model.
The 3.3km trend at Jaws has two historically defined main gold bearing zones across 1.6km of strike and to a maximum depth of 190m, which are open in all directions. The almost over 550m gap towards the middle still has strong potential to be joined and this current drilling campaign has reinforced this potential. There are numerous other excellent assays along strike at Jaws, such as 16m at 5.04g/t Au from 52m, 27.58m at 3.33g/t Au from 44.35m and 45m at 2.46g/t Au from 138.5m, including 10.5m at 5.45g/t Au from 138.5m. There are also quartz veins with rock chips of 14.55g/t Au and 14.35g/t Au that extend off zones of historical drilling. The strong IP anomalies overlaid across the prospect continue 5km southwest to the Vesper prospect, where there have been surface samples of up to 7.99g/t Au.
Gavin Rezos leads the MHC team as Chairman and 19% shareholder. He previously entered Vulcan Energy Resources (ASX: VUL) as Chairman in September 2019 and heavily invested into the company when it was just $7 million market cap – right before it went on a run to hit $1.7 billion market cap just 2 years later and went on to lock in $3.9 billion in funding to commence production. John Hancock was also invested in VUL and is a major shareholder in MHC – with the two of them increasing their positions in MHC during the placement in March.
The cross section below displays the standout 41.15m at 4.66g/t Au assay from this round of drilling, from the same section that previously returned 22m at 2.41g/t Au:
Source: MHC
The plan map below depicts the locations of the first four drill holes, which targeted the core of historic drilling and were guided by geophysics. There are still most of the key growth target areas that are yet to have assays come back, including the 543m gap:
Source: MHC
Hook Lake’s massive project area and key prospects can be seen below, with the current till sampling area including the Omega and Moonraker prospects. Omega is 6km northeast of Jaws and contains a Banded Iron Formation (BIF) prospect that is 7km long, 1km wide and covered in geophysical evidence of selective sulphidation – a key chemical reaction that indicates the potential for gold to have been precipitated in an excitingly similar style to 8.34Moz Meliadine:
Source: MHC
The chart below depicts the sharp rise in net gold call options with open interest in the SPDR Gold ETF (NYSE: GLD):
Source: Bloomberg, Goldman Sachs
As the next round of assays roll in from Jaws – in a superb environment for gold discoveries – Spectre will not be far behind, also with a brilliant macro environment for copper. With historical results validated and a thorough understanding of the main prospects at Hook Lake built on, MHC is in an excellent position to continue exploring these parts of the project while gearing up to target the new prospects that could deliver major company-making discoveries.
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Disclaimer: This article is for informational and marketing purposes only, and does not constitute financial advice or a recommendation to invest. All opinions expressed are our own. We may receive fees or other forms of compensation in connection with the publication of this content, and may own shares in any of the mentioned companies. Please do your own research and seek professional advice before making any investment decisions.