White Gold Corp.
(TSX.V: WGO)
(OTC – Nasdaq Intl: WHGOF)
CEO: David D’Onofrio
About: The White Gold District of the Yukon has seen gold discoveries of approximately 7 Million Oz since 2007. There have been major acquisitions and investments by GoldCorp, Kinross and others. White Gold Corp. owns a portfolio of 20,501 quartz claims across 33 properties, totaling 409,000 hectares (approximately 40% of the district). This makes White Gold Corp. the largest land holder in the District. The properties range from grass roots to advanced exploration projects including the flagship White Gold property with a mineral resource of 961k Indicated and 282.5k Inferred ounces of gold. The highly experienced technical and management team has a track record of multiple discoveries in the White Gold District.
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INTERVIEW TRANSCRIPTS:
WSA: Good day from Wall Street, this is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is David D’Onofrio, the CEO for White Gold Corporation, the company trades on the TSX venture, ticker symbol WGO and here in the US OTC NASDAQ International WHGOF. Thanks for joining us today there, David.
David D’Onofrio: Thanks for having me, Juan. Really appreciate it.
WSA: Anytime. So, starting off for some of our listeners here that are new to the story, can you provide us a history and overview?
David D’Onofrio: Absolutely. So, White Gold Corporation is a relatively newly formed company we put it together in 2016. With that said though, it’s sort of the culmination of the success and the experience, of some very, very high profile groups in the mining space for decades really before that. Our flagship project is based in the White Gold District of the Yukon Territory in Canada, which was the site of the very prolific Klondike gold rush from the turn of the century. I think you know, we all sort of have seen the pictures of the prospectors with the pans full of gold and those pictures sent thousands and thousands of people from the US and all over the world up into that region to literally pull high grade gold out of the stream bed by hand. In fact, they pulled out over 20 million ounces of gold back in those days with no technology…
WSA: Yeah, Gold Fever…
David D’Onofrio: You got it. So, for the next basically 100 years not much happened actually, you know, it got quiet until about 15 years ago when the legendary Prospector Shawn Ryan moved to that area and Shawn realized that there was a very unique characteristic of both the geology in that area as it hadn’t been glaciated. He discovered that there was a very strong correlation between the geochemistry in the soil and the bedrock beneath it. So, by analyzing what’s in the soil, which wasn’t necessarily always gold, there’s other trace pathfinder elements that are associated with gold, he was able to discover these very big soil anomalies, which then lead to the discovery of very large modern hard rock deposits. So, the theory is there was all this gold in the rivers, it didn’t come from the sky, had to have come from somewhere, but where did it come from? Shawn used this technique to be able to find it, and very early on in that process he was able to discover the Golden Saddle deposit in 2010, which Kinross Gold bought for $140 million.
At that time he was using these same techniques throughout the district and basically staked up a very significant portion of it, but once the word got out of this new discovery it basically created a new age gold rush, you know, gold fever all over again as you put it and almost every mining company in the world was looking to get a piece of it. Shawn was a very hot commodity with the large land package that he’d assembled and what he had done was he then auctioned off the rest of his claims to a dozen or so different companies and they all raised money and they all started to explore using his novel explorations techniques. Through that process one of the companies that he was working with Kaminak had another very large-scale high-grade discovery known as the Coffee deposit, which Gold Corp actually acquired in 2016 for over $500 million.
So, the area has proven to have some very significant high-grade gold deposits in the very shallow bedrocks. It’s an area of the world that’s really had almost no modern day exploration applied to it other than what has been involved with Shawn. However, something unique happened up there after the sort of gold rush 2.0 that was in 2011 and 2012, shortly thereafter the junior mining markets really got soft. So, all these companies that Shawn initially partnered off with and auctioned his properties to, that had raised a few million dollars to explore, when it came to raise the money to do their follow up work, this was really in the depths of that down junior mining market and none of them could afford and maintain their auction payments to Shawn.
So, Shawn Ryan got all these properties back, other than the two that had the big discoveries on them, which were very well financed. But not only did he get the properties back, he got the properties back with all the additional information that was generated based on the exploration work that these companies had done. It was like $25 or $30 million of exploration work having been done on them. So, he spent the next three years basically just reviewing all the data, going through line by line and seeing which of those properties were the best of the bunch and he aggregated those into a new portfolio and he believed that this district is going to be ripe with new discoveries. His view was that this is a, world class gold camp like what you find in Nevada, like what you find in Timmins, Ontario, like we find in some of these other premium gold districts in the world, it’s just that no work has been done on it yet with any modern exploration technique. Large gold deposits don’t usually happen on their own. And this is what it looked like was happening in the White Gold District of the Yukon. And imagine the potential to own over 30% of one of these world class districs!
However, the one thing he wanted to do differently this time around was he didn’t want to work with ten different groups. He wanted to work with one group that could provide the capital and the capital market’s expertise to help him be able to access the funds necessary to do a comprehensive exploration program over this entire area, which is about 35% of the district. So, that’s when he came to visit us at the PowerOne Group with 35% of the district that he has been studying for over 15 years. And really, we’re talking like 90% of the best properties that you could possibly have in that district, which is a huge gold district. PowerOne is a mining & diversified merchant bank based in Toronto that has a very strong track record and has been involved with many, many discoveries over the years that have been taken out by majors.
We’ve known Shawn well, we’ve done work together in the past and he knew that our group was able to provide the capital, the network and the relationships in the industry to help him execute on his plan. We love the plan, we love that jurisdiction of the world, it’s in a very stable jurisdiction, its mining friendly. We believed that this could be a once in a life time opportunity and so we were very happy to back him. We also believed the opportunity so unique, this would be exactly what major mining companies would love to be a part of. Its almost unheard of to be able to have the opportunity to own such a large percentage of such a virgin ground in an emerging mining camp is such a great mining jurisdiction.
So, we brought the idea and Shawn to a number of the major mining companies that we have close relationships with and not surprisingly they were all extremely interested. We selected Agnico Eagle to be our partner and they invested for approximately 20% of the company. Additionally Agnico was particularly attractive as a partner because they have such a strong exploration team and our arrangement with them is they would collaborate with to help explore this jurisdiction, so they were an ideal partner. They joined in and invested and bought 20% of the company, with Shawn and the PowerOne group owning probably another 25% of the company.
A few other strategic and very sophisticated institutions also came in at that point. We raised the capital necessary to perform the comprehensive exploration program and we got to work. That was at the end of 2016. Shortly after we got to work we had an idea that to add additional value to the company. Kinross had purchased Underworld for $140 million, and they were doing some work on that, but limited. I think they’re a big company, they have other very high profile projects around the world and maybe this wasn’t sort of at the top of their pipeline.
So, we met them and gave them a proposal, which went something like this; We have in our company some of the best properties in that jurisdiction and on top of that we had just assembled a team, which included every individual that was directly responsible for all of the exploration success in that area, which also included Jodie Gibson, who is now our VP of Exploration. He was the geologist on Underworld Resources, which discovered the Saddle deposit that Kinross acqured. Also Robert Carpenter joined the team, he was the co-founder of Kaminak, the company that Gold Corp had bought.
So, really there is no one else in the world that would be in a better position to unlock the value of their investments in that jurisdiction, so they should roll it into White Gold. This would allow them to keep an interest in these properties and gain exposure to the rest of our portfolio. Once we presented that idea to them, they just got it right away, they loved it and they said this will be a fantastic opportunity. So, what we worked out was that they would roll in their assets, which at this point had included a high grade gold resource of over a 1.2 million ounces, and some other very high profile exploration properties, and then they would take back 20% of the company and $10M cash and some performance incentives.
So, now we had Agnico and Kinross backing us each for 20% of the company. With two institutional investors on board, we were very well capitalized and now it was time to get to work, to try and repeat the model testing Shawn’s thesis to find more of these high-grade gold discoveries near surface.
WSA: You definitely have a backing of some pretty big players there, and you put out some results at the Vertigo target there at the JP Ross property, perhaps you can give us an overview of the property as well.
David D’Onofrio: Yeah, absolutely. So, that brings us to today where we’re starting to see the fruits of our labor and just to add on one extra little piece of interesting information. In the down period Shawn is reviewing the data, he also refined the exploration techniques in two ways. One, making them more efficient and less costly, which is obviously very important for junior mining companies, this was also very attractive to the majors and a big reason why they wanted to join forces with us because they knew that no one else could operate as effectively and efficiently as we could,. Secondly, he incorporated a lot of new technology that has never been used probably anywhere in the world.
For example, he has brought drone technology into the fold where he’ll use airborne unmanned drones to survey the landscape, to help find optimal structures where these deposits could be situated and then once he does that he’ll integrate the soil sampling we talked about earlier which identifies the soil geochemistry.
We then use what’s called a GT Probe, which is done in place of trenching techniques and that allows us to get a sample of the bedrock without having to disturb much of the soil. So, it’s faster, it’s more cost effective and this survey is extremely environmentally sensitive. The first nations who we worked with very closely up there, also love that. Another new technology we’ve added in is called Lidar. Lidar is a geophysical exploration technique, which allows you to see the bedrock structure. It’s basically lasers that are shot out of helicopters and it’s particularly effective in unglaciated terrains because it allows you see the actual structures, the fault cracks, which can let you know exactly where to point your drill.
So, with all these new approaches having been integrated into the program this year, we’ve now started to get the results, and we are just thrilled that we’ve already had two high-grade gold discoveries, the Vertigo and the Ryan’s Showing. One of them is on the JP Ross property you mentioned, and the other one I’ll just talk briefly about, is right along trend with our high-grade Golden Saddle gold resource on our White Gold property. There we had multiple high-grade intercepts, over 20g/t,, near surface, right along trend with this resource. We believe that the resource is extending in that direction, and to date very little exploration has been done in that area, so we’ve done a bunch of testing this year. We are now eagerly anticipating to see how those results come in, and that’s definitely going to be looked at further.
You know, in the mining business they say the best place to find a deposit is near existing deposits. We agree and our exploration success so far has proven that theory true once again. Our busy season is throughout the spring, summer and fall and we’re getting now into our results season, which has just started and there’s going to be a steady stream of results from here well into the new year. The other big discovery is Vertigo, which we’ve recently announced is on our JP Ross property, and this year’s drilling season has demonstrated what we have in the ground here. Vertigo’s drilling results include 23.4 g/t gold over 24.4 metres from surface ending in mineralization, and 103.9 g/t gold and 400 g/t silver over 1.5 metres from surface within a broader intercept of 32.1 g/t gold over 6.1 metres; very exciting numbers. Multiple surface samples over 130 g/t gold have also been encountered, defining a very long strike length over 1km, along a structural trend that extends over 12km with multiple targets that have not yet been tested. And just to make things even better, this property is very favorably situated actually right on a road. We can basically drive to the property, which is unheard of in most mines you know, especially in new exploration jurisdictions.
WSA: Just pull up to the drive thru.
David D’Onofrio: Yeah, exactly and just to sweeten the pie there a little bit, the Federal and Territorial Government announced last year that they were going to invest over $300 million to upgrade many of the roads in the Yukon to facilitate mining exploration and development. Right, so that just gives you a sense of how pro mining they are, additionally the majority of these roads will go right to our properties, as a lot of them are going down to the Coffee deposit, which Gold Corp is currently developing and is on schedule to start production in 2021.
But back to this JP Ross, the JP Ross really validated our approach. We started off with our drone survey And found out what the structure looked like. We did some soil sampling, we found out where the hotspots were, then we resurveyed the area with this Lidar to find out exactly what this structure looks like, where the fault systems were, and all those checked the box, this is had all the signs of success. But obviously the tail of the tape comes in the drilling and with the Lidar we knew where to orient our drills, and we just started to receive those results back and we have been just absolutely thrilled that we’re hitting extremely high-grade, some of the highest ever in the Yukon and basically right at surface with very economical intercepts.
WSA: Yeah, definitely this is now very exciting, right. We’ve definitely come a long way since the pick and the shovel right?
David D’Onofrio: Yeah, you’re absolutely right. So, that’s huge as soon as we saw that we brought additional drills to the site. We’re doing a lot more drilling now. Really kind of seeing that this system looks to be extending along that target, we’ve also received the results just recently on the surface sampling. We’ve had great gold grade over 100 grams per ton with surface samples, over hundreds of meters strike length, which is just kind of unheard of and what’s even more exciting about that is these grab samples like the soils are representative of the bedrock below and that’s now making sense why we’re seeing intercepts of three meters of 50 plus grams per ton as part of a 17 gram intercept, and 45 grams per ton over three meters as part of 9.5 grams per tonne over a 15m intercept.
So, this trend is right on the Vertigo target, but we also have a neighboring target called the Suspicion where we had also some very high grade surface samples and that’s over four kilometers away, and this mineralized trends with the other additional work that we believe it’s a 12 kilometer trend that’s structurally controlled it’s mineralized we see the high grades, it really has all the makings of a very, very significant gold discovery.
WSA: Yeah, certainly, so what are the key goals and milestones that you’re hoping to accomplish here over the course over the next 6 to 12 months?
David D’Onofrio: Well, we have many, many more results to come out. We drilled a number of other high profile targets. Some of them were nearby Gold Corp’s property, contiguous to it actually, which we hope to find other new discoveries on that one, we have many other properties that are in different parts of the pipeline. So, we’re trying to move these properties sort of up the pipeline from soil sampling, to doing the GT Probe, the Lidar. In addition to further understanding the discoveries we’ve had, we’re hoping to get more new discoveries and then we’re going to continue to move these other earlier stage properties up to the point where they’re ready to be drilled and we understand them.
This will probably be happening next year going forward, with the gold there it could generate more new discoveries and as we’ve gone through this process for the last couple of years, and with the results we had we see that the approach has been very effective and there’s no reason to believe that now why this can’t be more repeatable. These are areas that in fact no exploration has gone on in them before so we’re very excited to learn more about our new discoveries, see how big they are, and then bring out even more new discoveries over this course of the period.
WSA: Yeah, certainly. So, yeah, you have a pretty big land position there in the Yukon’s White Gold district. I think it’s over 40%, so as far as your future growth would you consider a partnerships or acquisitions?
David D’Onofrio: Yeah, you’re right, we have a huge land position like I said this is in our view it like owning 40% of a new gold district like Nevada. Imagine owning 40% of those gold camps 50 or 60 years ago. What would that be worth today! This is an area of the world where there’s a lot of known deposits. It’s on the same belt as the big gold discoveries in mines that are in Alaska like Pogo, it sits on the other side of the border. Geology doesn’t know any borders right and for whatever reason the exploration wasn’t done on the Canadian side of the border as it was done on the US.
So, we think a lot of the stuff is going to happen. We’ve been growing our land package all around these new discoveries just to make sure we own every last inch of where we think we can have more discoveries, and we have two great partners, we’re looking forward to continuing working with them to put these discoveries into production and whatever shape that’s going to work out to be we don’t know yet, but they are very involved, they’re very excited by what they’re seeing and we’re eagerly anticipating the results from all the drilling we’ve been doing over the past number of months coming out in the very near future.
WSA: Great, so David what are some of the key drivers there that you feel make White Gold Corp unique from some of the other players in the sector?
David D’Onofrio: I think a few things like we talked a lot about here is the true blue sky opportunities, but one thing the market shouldn’t forget is we do have high grade gold assets with over 1.2 million ounces, located in a district that’s building mines. The Gold Corp mine is only 20 or so miles away. It’s going to be in production soon.
So, the economics is changing for the better daily, so that fact valued by itself, right, based on our market cap we probably trade somewhere around $60 or $70 an ounce based on that. When Gold Corp bought Kaminak they paid a $175 an ounce. So, there is a tremendous amount of additional value on that.
We think that resource space is going to grow. We think there is going to be new discoveries nearby and that’s before we even talk about anything else like this Vertigo property where we had a major significant discovery, some of the highest grades and intercepts ever encountered is in this jurisdiction.
There’s, a lot of reasons to own this company right now I think. You have ounces in the ground, you have one of the best teams you could ever hope for in that region and you have the tremendous upside opportunities and the backing of some of the best mining companies and financial partners in the world.
WSA: All right, so once again joining us today is David D’Onofrio, the CEO for White Gold Corporation. The company as mentioned trades on the TSX venture, ticker symbol WGO as well as on the OTC NASDAQ International WHGOF currently trading at $0.89 a share US, market cap is about $98 million US, and we’d like to thank you David for taking the time to join us today and updating our investor audience on White Gold Corp. It was great having you on.
David D’Onofrio: Well, thank you very much it’s been a pleasure to share, our exciting story with you guys, really appreciate the interest. Hopefully a lot more good stuff to come.
