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Visionary Gold (VIZ-V): Family footsteps lead to high-grade gold hunt

Visionary now drilling at Wolf project, a neglected historical gold camp in Wyoming

By James Kwantes
Resource Opportunities

Junior exploration projects are notorious for their pitfalls. Lack of minerals is the obvious fatal flaw; others run the gamut from geology and geography to social licence and permitting, with other risks in between.

Venomous snakes slithered onto that list at the last gold project Wes Adams worked on, deep in the jungles of Guyana. This was no metaphorical jungle: one day Adams had a close encounter with a parrot snake, a nocturnal serpent that relies on ambush, not hunting, to ensnare its prey. “I went to go take a shower and there was a parrot snake in there waiting for me,” Adams says with a chuckle.

Wes Adams, Visionary Gold CEO

Adams escaped unscathed and the gold project, Toroparu, survived too. It eventually grew to 10.5 million ounces (all categories); Toroparu owner GoldX Mining, formerly known as Sandspring Resources, was purchased by Gran Colombia Gold earlier this year for $315 million. Measured and indicated grades at Toroparu are 0.91 g/t gold (plus silver and copper credits) and recent drilling has identified zones of higher-grade mineralization.

Wes’s father John Adams and his business partner Rich Munson worked an oxide gold mining operation in Guyana before drilling underneath and hitting the Toroparu mineralization. They developed Toroparu privately for several years, with Wes playing a key role, before vending it into Sandspring in 2009.

When they got started, the only way in was through boat or helicopter. Later, Wes’s trips to Toroparu required a flight into Georgetown, Guyana’s capital, followed by an hour-long riverboat ride and a bumpy 10-hour drive through the jungle in a Bedford army truck.
That road didn’t exist when Wes started working at Toroparu in his early 20s. He operated as a kind of high-level jack of all trades. Tasks included running the oxide gold mining operation, overseeing the camp build and running a 60-man camp at age 23 (an airstrip was added later), surveying the 140-kilometre road into camp and spearheading construction of long stretches of the road.

The Toroparu gold deposit in Guyana, recently purchased by Gran Colombia Gold.

Adams’s latest venture, Visionary Gold (VIZ-V), is drilling a project much closer to home and with established infrastructure. Visionary’s flagship Wolf orogenic gold project is in central Wyoming, about a five-hour drive from Adams’s ranch home near Steamboat Springs, Colorado. Visionary has consolidated a 50-sq-kilometre land package in a historical gold district — the Lewiston camp — that has seen no modern exploration.

Visionary recently raised $3.5 million through the sale of 18-cent units (one share, one 2-yr half-warrant exercisable at 27c) to drill Wolf. Adams put $225,000 into the upsized financing, taking his stake to 10.78 million Visionary shares, or about 15% of the company. Adams and other insiders kept the company (formerly Galileo Exploration) afloat during the dormant years before it acquired Wolf.

Visionary is drilling an initial 3,500-metre program and is funded to add metres as merited. Company geologists have identified five separate gold-bearing structures that they plan to advance. The first drill target is a geophysical anomaly directly below high-grade surface mineralization at the historical Wolf mine.

The drilling comes after a year of land acquisition as well as grassroots exploration that included sampling, geochemical surveys, mapping and geophysics. Visionary has identified a shear zone that outcrops at surface and has been mapped for more than one kilometre. A 2020 channel sample across the strike of the mineralized shear yielded 5.19 grams per tonne (g/t) gold over 10.25 metres including 39.19 g/t over 1m. Other channel samples included 8 metres of 2.13 g/t Au and 2m of 5.67 g/t.

Small-scale high-grade orogenic lode gold workings litter the Lewiston and South Pass gold trends. The Wolf is one of more than two dozen mines in the area that are estimated to have collectively produced more than 500,000 ounces. Gold was first discovered in the 1840s and production continued until 1956.

The historical Carissa gold mine in Wyoming’s Miner’s Delight Formation.

Visionary started by acquiring a 10-square-kilometre claims package that included the Wolf claims. The company has since doubled its land position twice, most recently (on May 10) purchasing a nearby claims package from Innovative Exploration Ventures, a private company, for $99,000 in Visionary stock. The deal was for 6,000 acres of state leases and unpatented mining claims and also comes with a state-wide geological database including airborne magnetics, geochemical data, mapping and drill-hole records. Two geologists from Innovative’s team will assist the exploration program on the new land package.

The focus now is the “Cowboy State” but those early days at Toroparu were more like the Wild West, jungle edition. Prospectors emerged out of the bush and mini-towns popped up as Adams and his crew carved a road out of the dense bush.

During one trip into the project, Adams drifted off to a fitful sleep in the back of the Bedford. When he woke up, the truck was lurching through a town he had never seen before.

“I went to the driver and asked, “Where are we? I don’t recognize this, we’re not on the road to Toroparu.”

The driver replied, “Yes we are. The Brazilians made an alluvial diamond discovery here and built a town.”

Adams says: “There were stores, rum shops, a hotel, a discotheque, a brothel. There was clearly money being made and spent. It was like the Wild West in the middle of the jungle, with everything that comes along with that.”

After the successful reverse takeover that created Sandspring, Adams spent about four years as Sandspring’s investor relations director. In that role, he developed important capital markets relationships and raised almost $100 million in equity towards the development of the project.

In 2014, Adams switched focus from Guyana to the Powder River Basin. He founded and then operated Energy Fuels Environmental, a private Wyoming-based oil and gas environmental services company. After building up the business, he sold it to Tallgrass Energy, a major midstream energy company, in 2017.

Adams spent a lot of time trekking around Wyoming’s Lewiston gold district assembling Visionary’s land package. He’s following in the footsteps of both his grandfather, Robert (Bob) Adams, who discovered uranium in Wyoming and built Colorado’s largest coal mine, and his father, who took over the family’s private uranium company and later found gold at Toroparu.

They’re rather large footsteps. When the United States entered the Second World War, Bob Adams enlisted and served as a bombardier. While his plane returned from a bombing run to Berlin, it was shot down over Germany. Adams was captured and imprisoned in a Nazi prisoner-of-war camp for a year, later escaping with the help of a German family. Upon his return to Wyoming after the war, he went into business with his father, who owned a milk plant, hotel and restaurant in Rawlins, Wyoming.

At the restaurant, geologists and prospectors would come in talking about uranium after scouting for the mineral in nearby hills. Adams took note. He found a wealthy physician, Dr. C.W. Jeffrey, to financially back him and began to prospect for uranium himself on the hills above Rawlins. Adams bolted radiation detectors that could identify uranium occurrences onto the wings of his private plane. He eventually hit pay dirt, identified an economic ore body and built Wyoming’s first uranium mill. The company town, Jeffrey City (named for the doctor), grew to a population of 4,000 people. Adams sold one of his first companies, Western Nuclear, to Phelps Dodge.

His later private company, Energy Fuels, was a predecessor to the public uranium company of the same name. It was America’s largest uranium producer during the 1980s and early 1990s while the United States was the world’s largest producer of yellowcake. Wes’s father John took over Energy Fuels when Bob Adams died in 1982.

The Adams family connections extend to Colorado, where Energy Fuels operated the state’s largest coal mine. The Steamboat Springs airport is named Bob Adams Field; Wes’s father John was a former 40% owner of the NFL’s Denver Broncos. It’s an impressive family pedigree, one that has helped Wes pick up claims from prospectors as Visionary consolidates a land package in a state where his grandfather was a mining pioneer.

Wes’s interest in Wyoming gold exploration was piqued by a book. The author, acclaimed geologist Dan Hausel, investigated Wyoming’s gold and copper occurrences during a long career with the Wyoming Geological Survey. In the book, Hausel identified the Wolf mine as the likeliest location for an economic gold deposit in Wyoming.

“The reason I’m doing this is because I read one of Dan’s books,” Adams said. “I circled that passage and started there.”

Hausel, one of the 2009 Thayer Lindsey Award winners for the Donlin Creek gold discovery in Alaska, is now a member of Visionary’s exploration advisory board. Both the size and quality of the advisory board are rather rare for a junior exploration company. It suggests that Visionary could become something more than a single-asset exploration company.

Mining has always been the backbone of Wyoming’s economy, and without it, communities begin to disappear.

Wes Adams, Visionary Gold CEO

“We’re always on the lookout to add high-quality assets,” Adams says.

Visionary’s latest advisory-board appointment, Stan Dempsey Sr., illustrates the high level of experience and expertise on Visionary’s team. Dempsey is the founder and former chairman of Royal Gold, which he started as a small oil-and-gas play and developed into a dividend-paying royalty powerhouse. Royal’s cornerstone royalties are on the Cortez gold mining complex, a series of high-grade open-pit and underground mines operated by Nevada Gold Mines. Dempsey is based out of Golden, Colorado and will help Visionary on ESG issues.

Stan Dempsey, Sr.

The Mining Hall of Fame member joins an experienced roster of geologic advisors, who have been credited with several discoveries of world-class mines. Some of them started their careers working for Wes’s father at Energy Fuels and all have worked in Wyoming.

There is also orogenic gold expertise at the board level. Director Darren Lindsay is a geologist with experience in Archean greenstone belts in Nunavut and Ontario. Director Marc Blythe is a mining engineer currently working as a consultant at Evolution Mining’s Red Lake gold mine, where his roles have included mine manager as well as planning and geology manager.

Visionary has high insider ownership for a junior exploreco. Wes and John Adams own a combined 27% of shares and management, directors and other close associates take the total to about 75%. With a modest valuation of $12 million and a small float, the share price could move hard if the company hits high-grade gold in this drill campaign.

When Adams drives from his Steamboat Springs home to Visionary’s Wolf project along Highway 287, he passes through the former boomtown built by uranium and his grandfather. Time has not been kind to Jeffrey City (below). When uranium prices fell off a cliff, so did the city’s population: 95% of residents left in three years. What remains is a dusty ghost town of empty buildings and ramshackle homes, where tumbleweeds have replaced residents.

Jeffrey City, Wyoming

Today, there are echoes of Jeffrey City’s fate in Wyoming’s many coal towns, which are depopulating as the world transitions from coal to cleaner forms of energy. In addition to making money for shareholders, Wes is motivated by the prospect of reviving a gold mining industry in a state where family roots run deep.

“Mining has always been the backbone of Wyoming’s economy, and without it, communities begin to disappear,” Adams says.

“The opportunity here is to transition from fossil fuels to more valuable commodities like gold and copper, which can be mined with much smaller footprints and far less environmental impact.”

Disclosure: James Kwantes owns shares of Visionary Gold and the company is a sponsor of Resource Opportunities. This article is not financial advice and all investors need to perform their own due diligence, especially in the junior mining sector.

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Diamonds Q&A: North Arrow Minerals CEO Ken Armstrong

By James Kwantes
Resource Opportunities

North Arrow Minerals is 1 of 3 Resource Opportunities sponsor companies.

Vancouver-based North Arrow Minerals is one of the more active diamond exploration companies globally, with a portfolio of projects focused on Canada. Its most advanced-stage project is the large Naujaat deposit in Nunavut, which has a resource and hosts a population of valuable fancy orange yellow diamonds.

But this season’s focus is on exploration drilling at the Mel and Loki projects in Nunavut and the Northwest Territories, respectively. Mel was a grassroots diamond discovery that North Arrow announced late last year. The company traced kimberlite indicator mineral (KIM) trains up-ice and made a prospecting discovery of kimberlite, from which 23 microdiamonds were recovered from a 62.1-kg sample. The first drilling program on the property is planned for this summer.

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The Loki project is in the Lac de Gras diamond field that hosts the Diavik and Ekati mines. The focus there is EG05, a kimberlite that Rio Tinto discovered, and 465, a kimberlite discovered by North Arrow in the spring. The latter was the first kimberlite discovery in Lac de Gras in the past 5 years. It’s familiar terrain for the North Arrow team, including chairman Gren Thomas whose Aber Resources discovered the Diavik diamond mine.

North Arrow CEO Ken Armstrong

Rough diamond prices are now at a 52-week high and demand for polished diamonds is strong in China, India and the U.S., according to New York-based diamond analyst Paul Zimnisky. On the production side, pending mine closures including Argyle and Victor will put pressure on supply, with few new operations coming online.

The improving picture follows a choppy 2017 that saw high inventory levels at De Beers and Alrosa and flat rough diamond prices. North Arrow shares have been under pressure along with shares of new Canadian producers Stornoway Diamonds and Mountain Province Diamonds, which declined 41% and 18% respectively over the past year as startup problems weighed.

On Monday North Arrow announced a $3-million private placement consisting of flow-through shares at 20 cents and non-flow-through units (one share, one 2-year 30-cent warrant) at 17 cents. We caught up with CEO Ken Armstrong, who was in Calgary for the TakeStock! investor forum, to find out more about plans and how the money will be used.

Q: What is the breakdown on how the $3-million financing will be spent?

A: We’ve allocated $2 million for Mel drilling – testing the 2017 kimberlite discovery and new targets. That number includes microdiamond processing costs. We will also complete microdiamond processing of the EG05 and 465 kimberlites at the Loki project that were drilled in March, as well as some final microdiamond processing from the 2017 drilling of Naujaat. That’ll be a couple hundred grand. We are also looking at getting a remaining top target drilled at Loki, target 853. Ideally we’d tie that onto ongoing drilling at our LDG JV property, which is operated and funded by partner Dominion Diamond. We’d retain a half million or so for G&A.

Q: Any big names buying into the financing? How much will insiders and management participate for?

A: Insiders are committed to taking at least $1.5 million, so half, with most of that being directors/management. Gren Thomas, our chairman, and Eira Thomas, a North Arrow advisor, will both participate. I will also participate.

Q: How did you determine the pricing of the financing?

A: We tried to price it to make the non flow-through unit and flow-through share components equally attractive. On the Unit we put a fairly quick threshold on the accelerator, at 40 cents, however we felt it was justified by pricing it a discount to market with a full warrant, rather than a half-warrant. The flow through is essentially priced at market with the intent to fill the orderbook efficiently. We are looking at immediate use of funds with Mel drilling in July, Loki drilling in July or August and with more diamond results from Loki, Naujaat, and in September or October, from Mel. This is all news flow that will occur before the four-month hold comes off the financing shares which is, we think, a positive feature of the placement. We have been the most active Canadian junior in terms of new kimberlite discoveries in Canada and are poised for more discovery, potentially on up to three projects, over the four months.

The esker location at Mel where North Arrow’s drill camp is being set up.

Q: Which of the three active projects that you’re raising money for is the most likely catalyst — Loki, Mel or Naujaat?

A: All three have potential catalysts. Folks seem to be most interested in new discoveries and Mel certainly fits that bill — it’s a brand new kimberlite discovery made by prospecting last fall. The kimberlite contains some very coarse mantle minerals and we see hints of that coarseness in the initial diamond results, which is positive. Having already found kimberlite and diamonds actually de-risks the initial drilling significantly. We know we will hit kimberlite with diamonds, it’s more a question of how many and how big they are.

Based on the spread of indicator minerals there are certainly multiple sources with some nice, sizable magnetic targets. This is a brand new kimberlite field and the first kimberlite discovered is significantly diamondiferous. It doesn’t happen too often, so we are keen to get drilling. We’re currently mobilizing a camp and drill to the property now with drilling planned for July.

At Loki we also have a new discovery and are waiting on microdiamond results. In early April we announced the discovery of the 465 kimberlite – the first kimberlite discovery made in the Lac de Gras area in over 5 years. There are also pending microdiamond results from the EG05 kimberlite which was also drilled during the spring 2018 program. We also have a number of targets that we’d like to drill test, including target 853, which we’d like to see drilled this summer.

Q: It’s been almost three years since the disappointing Naujaat diamond valuation. Does Naujaat remain North Arrow’s flagship project and what is happening with the project?

A: Naujaat remains North Arrow’s most advanced project. We’re still interested because it’s a significant diamond inventory in a large tonnage deposit (as far as Canadian diamond deposits go) sitting on tidewater near a community. Our work on the Q1-4 diamonds has clearly shown the deposit contains high-value fancy orange yellow diamonds and, overall, is under evaluated. Last summer we completed more drilling to confirm the size potential of the kimberlite down to 300 metres below surface and we had three different holes extend over 100 metres beyond the geological model, with two of those holes ending in kimberlite. It’s a big body. We also collected a 210-tonne sample that confirmed the presence of the coloured diamond population in the A88 phase of the kimberlite. This is a totally different unit than was sampled in 2014 – the 2017 sample pit was over 400 metres away for the 2014 pits – and the proportion of coloured stones is very similar to the 2014 result. The work we’ve done with the diamonds themselves has shown that the coloured stones are a distinct population from the non-coloured stones. The two populations are completely different ages and the yellow population has a markedly coarser distribution than the non coloured stones.

The photos of the diamonds we had polished and certified at the GIA show how beautiful this colour is and highlight the potential value upside in these diamonds. But it is actually the potential for a coarse size distribution that may be even more important in terms of potential upside to the value contribution of the coloured diamonds. And the only way to confirm or disprove the potential value upside is a larger bulk sample.

A cut-and-polished fancy intense orangey yellow diamond from North Arrow’s Naujaat project.

To that end we have hired consultants and been working closely with the community of Naujaat to look at developing a road to the deposit. We’ve also started looking at processing options for a larger sample and how that might look, all with an eye to better pinning down the budget options for collecting a sample of sufficient size to get that answer. Being so close to the community really presents opportunities for reduced costs – we’ve seen that with our exploration programs and we need to make sure we take full advantage of all potential cost savings.

Of course all this takes time, but that is why we have North Arrow evaluating a number of quality projects, not just one. It allows the team to focus on well-informed, cost-effective exploration even if that might mean slower news flow from a particular project. There will be steady news flow from other projects as each cycles through the process.

Q: Along the lines of quiet projects, what is the status of the Lac de Gras joint venture with operator Dominion Diamond Corp.?

A: The LDG JV is having an active year. It has definitely been one of our quieter projects as our partner Dominion spent a lot of effort defining targets through a series of overburden drilling and geophysics programs. Late last year, Dominion also went through a well-documented takeover by the Washington Group of Companies, with the resulting transitions that often accompany such changes. However, a very positive outcome for the LDG joint venture has been Dominion’s renewed commitment to exploration, and, as I understand it, the 2018 LDG JV budget was one of the first budgets approved by the new ownership. The focus of the 2018 program is exploration and discovery-type drilling and we expect that work to pick up again during the summer. North Arrow elected not to finance its share of the current program so we could focus our resources drilling our 100% owned projects at Mel and Loki. However, although we are taking dilution of our joint venture interest, if a Lac de Gras-type discovery is made North Arrow will still maintain a significant interest, north of 25%, in the joint venture.

Q: With Eira recently taking over as CEO of Lucara Diamond Corp., how involved does she remain with North Arrow?

A: Eira’s involvement with North Arrow has been key since we began our focus on the Canadian diamond space. She remains an important advisor and sounding board for management – and the board – as we strategize on how best to move the project portfolio forward.

Disclosure: North Arrow Minerals is one of three Resource Opportunities sponsor companies and James Kwantes owns North Arrow shares. Readers are advised that this article is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. The information is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data.

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