Snowline Gold hasn't got its "arms around" its Valley gold deposit at its Rogue project in Yukon, Canada, yet with plenty of growth potential still to be uncovered, chief executive Scott Berdahl told Mining Journal.

Earlier this month, the company released a maiden indicated resource of 76Mt grading 1.66gpt gold containing 4.05Moz, with an additional 3.26Moz in inferred resources. Snowline has been one of the few gold exploration stories that has caught the eye of investors over the past few years, with a promise of grade, scale and continuity.

For Berdahl, this initial resource has delivered, with a large number of ounces using conservative inputs. "We took a fairly conservative approach in terms of how it came to hang together. We have a pit constraint on the resource and revenue factors of 0.72, which is a fairly conservative way to go and means we are not really pushing it to the maximum of the economic limitations. … By walking it back, we're showing something we have a lot more confidence in," said Berdahl.

Snowline framed the Valley resources in sequential pit shells to show a potential mining sequence, which highlighted the prominence of a high-grade portion near the surface. "That is to give an idea of how top-heavy this system is and its continuity. There is almost no waste in that first zone, and the average [grade] is well over 2gpt. There are 2Moz indicated there, so you are digging into high-utilisation [mineral] from day one," said Berdahl.

With the high grade at Valley being near the surface, it bodes well for a future production scenario and the possibility of obtaining a relatively quick payback time for the initial capital invested. "The cash flow that would come out of a deposit with a geometry like that will be front heavy with a big pulse at the front. That is a good thing because you can pay back capital expenditures more quickly," said Berdahl.

Showing Valley's continuity was a key task to start to show that mining could be relatively simple and not face the challenges other deposit types face.

"Even after 2022, when we had huge drill spacing of 260m between holes, we saw intervals longer than that [260m] within each hole, and, drilling along strike, there was no reason to think that the mineralisation dipped between them. … It is a lot less like your typical structurally controlled orogenic system and almost like a base metal or a copper porphyry, except that it's relatively high-grade gold," said Berdahl.

Snowline's stock received a slight lift on the day the resource was announced, which, in a market that has preferred to punish juniors for putting out resources and economic studies, is something of a victory, even if it didn't set the world on fire.

"There was a range of reactions, from:Why is it so small, to why is it so big? It was nice to be able to put a guidepost out. We have been hesitant, not just to ensure we have the quality of the resource, but our strategy to wrap our arms around it, so to speak, and not just rush towards the first million ounces. … We broke our own strategy because we don't have our arms around the whole thing yet. This is an initial resource, and as initial resources go, this is definitely up there," said Berdahl.

The company has a 25,000m drilling campaign underway this season, with at least 15,000m devoted to Valley, and the rest on regional exploration. It has three rigs operating with another two on the way as it seeks to expand Valley, infill and upgrade it

Eagle

Rogue is located in a relatively remote part of Yukon with little infrastructure. A mine development would require road access, power and other basic infrastructure, which means there has been a high threshold for the Valley deposit's scale and grade requirements from the get-go for a mine ever to be developed.

The recent heap leach pad slide at Victoria Gold's Eagle mine in Yukon earlier this week is likely to mean that Snowline will face greater regulatory and social scrutiny to obtain an environmental license should the company be able to advance the project to that stage. While stating that it is too early to comment on what happened at Eagle, Berdahl acknowledges that bringing new projects on stream in Yukon probably just got harder.

"It is a bit of a double-edged sword, and yes, it will almost certainly bring about closer looks at things and could pose additional hurdles. With the metallurgy we've done and the grades we have, our options for processing it are open.

Our current resource estimate doesn't consider heap leach. We have had great recoveries from flotation tests and we haven't optimised testing yet for our material. So there's a lot of options. The overall situation underscores the need for a world-class asset. We know already that the closed operations [at Eagle] are going to hurt Yukon businesses, Yukon contractors, our local airline, and so on. We need something stable and robust that can fill in that gap. That is where I think there's opportunity," said Berdahl.