SOMBA K'E/YELLOWKNIFE
"Not everyone is lucky to have a project as close to town as TXR," said Louis James, senior metals investment strategist for private analyst company Casey Research, LLC.

TerraX Minerals Inc. president and geologist Joe Campbell in the Yellowknife City Gold project core facility in Yellowknife on Sept. 24. TerraX hosted industry analysts last week for a walk through of the property and this year's drilling results. - Walter Strong/NNSL photo

To anyone following the gold play closest to Yellowknife, TXR is the Toronto stock exchange's venture listing for TerraX Minerals Inc. The project itself is the Yellowknife City Gold (YCG) project, a 100 per cent TerraX owned 93.5 square-kilometre property just north of Yellowknife.

James was among a select group of industry and investment analysts who visited Yellowknife last week to get a first-hand look at what TerraX has been doing on the ground to date.

Like the other mining analysts who came to town, these analysts don't give out free advice, so James' brief comment was actually quite generous.

It can cost thousands of dollars to subscribe to their investment newsletters, and their opinions can sway the investment decisions of tens of thousands of individual investors or corporate clients.

"We wanted to show them we have a really good project from a technical point of view," said Joe Campbell, geologist and TerraX president.

"Hopefully they will agree."

Last week, TerraX announced it was going to investors to raise a further $2.1 million. The deal is expected to close before the end of the month.

If successful, TerraX will have the cash it needs to get through second phase of winter drilling on the property.

With approximately 4,500 metres drilled to date, Campbell figures YCG needs another 20,000 metres of drilling before being ready for the kind of NI 43-101 resource estimate Campbell wants to see.

"We would like to do enough drilling that we could anticipate having a million ounces between the Barney and Crestaurum (shear zones) before we put out a 43-101," Campbell said.

Two million dollars will get you approximately 10,000 metres of drilling this close to Yellowknife, a bargain compared to drilling costs that can easily approach between $400 and $1,000 per metre in remote NWT or Nunavut locations.

A resource estimate of 1 million ounces of gold from about 25,000 metres of drilling might be optimistic, if TerraX wasn't already sitting on the data from more than 200 previously drilled and logged holes on the property.

While many of those historic holes have intact core to back-up the assay results contained in drill logs, many logs exist without core available for re-assaying.

"We had recovered Crestaurum (drill) core from the Giant (mine) yard last summer, but the core we recovered was from 1985 drilling," Campbell said. "Previous to 1985, there were over 100 holes drilled for which we have no core."

Four of the nine holes drilled this year on the Crestaurum shear were to "twin" and confirm existing drill logs where no core samples remained.

The assay results of those drilled cores have only recently been released, and they support the historic records.

"We had excellent correlation between our results and the results from the 1940s," Campbell said.

"For example, we released a hole last winter that we had drilled 10 metres of just over four grams (of gold per tonne), and that hole historically was 9.75 metres of just under four grams (of gold per tonne)."

"That is an incredible correlation for a gold deposit. We've had similar results with the other holes we twinned."

Highlights for the most recent 810 metres on the Crestaurum showed 2.85 m at 33.6 grammes per tonne (g/t) gold, 3.07 m showing 13.84 g/t gold, 2.76 m at 7.52 g/t gold, and 5.10 m showing 7.01 g/t gold.

Early this past winter, TerraX drilled three other holes on Crestaurum showing up to 10.02 m at 4.17 g/t gold, and 1.47 m at 8.73 g/t gold.

On the Barney shear -- what Campbell describes as an extension of the same shear system that produced the Giant and Con mines -- TerraX had good results from the five holes drill drilled earlier this year, including 22.42 m at 6.35 g/t gold, 5.16 m at 18.4 g/t gold, 15.73 m at 3.93 g/t gold, and 3.83 m at 5.3 g/t gold.

"People need to understand that in total, including winter and summer, we (only) drilled 4,500 metres," Campbell said.

"That's a very small program, and our success rate with 4,500 metres was very high."

But COMEX gold is at its lowest point so far this year, sitting at just over USD $1,200 per ounce. The Reuters financial news service is reporting $1200 as the point where many existing gold operations become uneconomical.

That doesn't encourage investment in junior mining companies, but Campbell is confident TerraX and YCG have the right combination of geology, location, and experience to keep the project moving forward.

"We're still in a free-fall," Campbell said of the market. "There's still a lot of pessimism about where the market will go, but if you can present a good project, that supersedes the daily, weekly, and monthly fluctuations of the markets this is one of those projects."