Sounds simple enough, right? That catchy little saying, as true as it is, is much easier said than done. A good place to look, though, is where gold has been found before. Once a veritable hotspot of gold production, mining in Montana stepped back in the 1940s as resource efforts were squarely focused on the Second World War. Now some 70 years later, miners are revisiting the state that has been home to approximately 1,400 gold mines and produced more than 20 million ounces of the precious yellow metal.
One such company is Winston Gold Mining Corp. (CSE: WGC)(OTCQB: WGMCF). The Winnipeg, Manitoba-based miner also owns a promising 2,342-acre property in Willcox, Arizona at the site of a high-grade, past producing mine, but is devoting most resources first to its 205-acre Winston project, located about 18 miles southeast of Helena, MT.
Situated in a known gold district and once host to two producing mines, the Winston project is the initial focus for the company because of its potential as a near-term producer, according to CEO Murray Nye. This isn’t Nye’s first foray into the mining in Montana. Working with the venerable mine developer Max Polinsky and mine manager veteran Harold Gunsinger, Nye led RX Exploration towards bringing the historic Drumlummon Mine in Marysville, MT (about 20 miles northwest of Helena) back into production about a decade ago.
Nye, Polinsky and Gunsinger left RX following a bitter proxy battle six years ago, subsequently taking their skillsets and knowledge of mine development in Montana to build Winston Gold Mining. Last March, the company was approved for listing on the Canadian Securities Exchange, followed by listing in the U.S. on the OTCQB marketplace of OTC Markets in October.
The Winston property hosts two past producing mines, Custer and Edna (so named for their eponymous underlying gold vein and trend). Through processing of only 150,000 tons of ore, the district has produced 100,000 ounces of gold since mining began 150 years ago for an average grade of 22 g/t gold. On February 9, Winston Gold announced the drill results from the historic high-grade Custer Vein, which came shortly after it announced drill results from the Edna Vein system.
The thing is that exploration and mining has been shallow by today’s standards, generally 400-feet or less. The reason was simple: water. Going below the water table meant water had to be pumped from the mine, which was an expensive proposition a century ago and required using pumps powered by steam. To wit, depth was not economical.
Still, there has been approximately 46,000 meters of historic drilling done on the Winston property. A short video on the Winston Gold website provides a good visual as to the extent of historic drilling and some impressive intersects (i.e. 20 feet grading 55.8 g/t gold, 2 feet grading 89.7 g/t gold and 2 feet grading 97.66 g/t gold) that have been recorded at the property.
The drilling and cuts also speak to the potential breadth of Edna and Custer. The Custer Mine was an important contributor to the 100,000 ounces produced from the district, but Winston management thinks that not even half of the Custer vein has been identified. Data suggests that the vein may extend another 500 feet deeper, meaning that new resources could be trapped in a vein extension measuring 2,400 feet long, 500 feet deep and 4 feet wide. Moreover, the deeper gold could rest in sulfide ore. A problem to process for miners in the early 1900’s, sulfide ore is known to contain higher gold grades.
Utilizing $5.0 million raised to date, Winston continues a phase 1 drill program at the project. Assays from the program have shown intersects of 44.57 g/t gold across 2.3 feet, 69.87 g/t gold over 1 feet at Custer and, importantly outlined a new high-grade gold vein, now dubbed the “Edna-West Vein.”
With a strike length just over 400 feet and a vertical extent up to 150 feet, Nye said on January 23 that the company aims to identify an adit, a horizontal entrance point, to access the vein.
Thanks to a Montana mining regulation called a small miner exclusion statement (SMES), Winston will have the option to mine ore amid ongoing exploration to define a fully commercialized mine. A SMES provides the guidelines for mining operations if, among other things, the activities don’t disrupt more than five acres of the earth’s surface.
Given the fact that the Winston property is largely underground with all the infrastructure, including paved roads, railway, mills, powerlines and skilled labor, in close proximity, management has positioned the company to generate cash flow in the future, a true benefit to shareholders.
The historic exploration and mining has pointed the direction, now it’s up to Winston to go find the gold.
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