SOMBA K'E/YELLOWKNIFE
TerraX Minerals is plans to drill again this week at its Yellowknife City Gold project, starting off its plans to drill 7,000 metres by the end of this year.

TerraX Minerals Inc. president and geologist Joe Campbell in the Yellowknife City Gold project core facility in Yellowknife on Sept. 24. The company plans to drill 7,000 meters by the end of the year. - NNSL file photo

President and CEO Joe Campbell said the work will give the company a firm base of estimating the resources on the 99.3 square kilometre property 10 kilometres north of Yellowknife.

"That'll be a beginning for us for resource estimates," he said.

Compared to many others, Campbell said his company has been fortunate to be in its financial position. "Right now, we've got more money than we've ever had to carry our work forward," he said. Currently, TerraX has $5.2 million raised from the sale of flow-through shares, $1 million "hard dollars" from the sale of a future option, as well as approximately $600,000 to $700,000 still in the bank. Flow-through shares are a type of security where the company's debt is passed on to investors for the purposes of reducing income taxes. The funds also have to be spent within a certain time period, usually two years.

But Campbell was careful to emphasize the company was "many years" from finding and developing its goal of a five-plus million ounce resource, close to the deposits at the Con Mine (6.1 million ounces gold) and Giant Mine (8.1 million ounces gold).

"But we're starting," he said.

This news from TerraX comes at a time when many projects in the NWT have stalled or experienced difficult raising funds, such as Avalon Rare Metals' Nechalacho or Fortune Minerals' NICO. However, Campbell pointed out that it's not just junior mining companies in the territory that are experiencing difficulty raising funds right now due to declining metal prices and negative sentiments from investors.

"I could name you half a dozen projects from southern Canada or outside of Canada that are also stalled and have been for many years," he said, "A lot of the projects that have been delayed or cancelled in the North, there's a reflection of that throughout the whole industry, regardless of where the projects are."

As for what makes the Yellowknife City Gold Project more successful than others, Campbell cited the geographic location of the mining camp with its existing infrastructure, and the easy accessibility of the site due to its location to the city.

He said it's a great lesson about the value of infrastructure and its relationship to the mining industry, even with large projects such as the proposal to put a road through the Slave geological province.

"Those are big ticket items, but they're huge incentives to the mining industry to put those things into place," he said.

The Yellowknife City Gold project's proximity is also something Mayor Mark Heyck is excited about.

He cited the city's experience with the diamond mines, which he called positive economically, but often end up with a substantial portion of the workforce living somewhere else.

"(Yellowknife City) is the type of project where it's in such close vicinity to the city in all likelihood the vast majority of people working at an eventual mine there would be located in Yellowknife," he said.

Campbell also said that following this work, TerraX will have $4.5 million remaining for exploration in 2016.

Even with a condensed timeline, Campbell told Yellowknifer that it would be at least eight to 10 years before the project would go into production.

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