Banyan Gold - 40,000 Meter Drill Program Details, High-Grade Drill Results, Franco-Nevada Acquires Existing Royalty

Hey, everyone. Welcome to the K.E. report in a company update from Banyan Gold. I am chatting with the president and CEO Tara Christie.

Tara and I have a lot to talk about recapping some drill results from the Ormat Gold project that were released just yesterday, March 10th.

Also, some news and information on a pre-existing royalty at this project that was just purchased by Franco Nevada for $52.2 million.

As well as a bit of an overview of the drill program that started mid-February, that 40,000 plus meter fully funded program, and some of the new targets.

I had a couple questions come in on some of the new targets the company will be drilling.

So Tara, let's start off with this pre-existing underlying royalty. It's a 6% NSR on the project.

It is, I guess, being held or was being held by Price Waterhouse Coopers that was the receiver and manager for Victoria Gold.

Franco Nevada stepped in, they purchased this royalty for $52.2 million, but another nuance to cover here is that you, Banyan Gold, has the ability to reduce this NSR down to 1%, from 6% for a one-time cash payment of $10 million.

So Tara, take us through Franco coming in and purchasing this royalty and your option to reduce this royalty, please.

Yeah, so the logical outcome is that when this project produces that somebody will pay that $10 million and then reduce the royalty to 1%, so really what they've nominally purchased for $42 million is a 1% NSR.

And for us, one Franco purchasing is huge validation of our project. You know, they do a lot of due diligence.

It means they believe that this is kind of project, particularly for that kind of a price tag for 1%, that will one day become a mine, and that it's a very large deposit.

So they probably think they've got a good deal buying it at that price for 1%, and obviously that would mean we'd have lots of upside in the geology and the project for that valuation to be a discounted price.

Yeah, really when you run the numbers here, not discounting that $10 million whenever you pay it, but they're paying $42.2 million for 1% NSR here, but that brings up the question, you have the option of paying this $10 million, is there a cut-off date on this?

When do you expect to repurchase or reduce this royalty?

You know, you don't have to do that until you're about to sell gold, so why would you rush to do it?

And that in the time value of money for us, doing that when you're about to produce gold is when you do it, and it may not even be us.

So, you know, we're under no pressure at all because there's no time constraint on it, but really for us the significant thing, and we wouldn't want to spend the money right now, because that's not the best use of our current shareholders dollars.

But really, that benchmark valuation and the vetting of the quality of our project is really what gets me excited about it.

And, you know, Frank goes now a partner, they've been known to get involved in financing projects, and generally when they buy a royalty, they are a partner to a company, they're out marketing, they're telling the story that they believe in it, so that's really positive for us.

Now, it's also noted in that news release that the royalty area covers approximately 13% of the total or Mac project.

It is over that resource area, but talk to us about, I guess, the potential outside of that area that now the royalty to Franco is on, what could happen outside of there?

And if there are any other royalties or anything else, we should know about the rest of the project.

So we now have 720 square kilometers, and yes, that royalty only covers 13% of that 720 square kilometers.

We've identified 10 other targets on the property that think we have both geochemical, geophysical anomalies, as well as a lot of historic, alluvial and present alluvial mining, or placer mining, as people call it,

right around those targets. And that, to us, means that we want to go and explore those.

Some of those, most of those, are on property where we have no existing royalties.

There are a couple of them that are on properties we purchase that have minor 1% royalties on them as well.

So lots of upside, exploration upside for our shareholders in that, in that big area, and these types of deposits occur in belts.

Remember, we're right by Victoria Gold, we've got our Ormac, and then across them a question river is Sitka, and there's known intrusions on the property they've been mapped, but they haven't been drilled these areas.

So we're pretty excited. We're going to have two fly drills in the summer, starting in May, focused on drilling some of these targets.

And there are some of them that our skid mounted drills can hit on the Ormac proper property.

So yeah, look for lots of exploration news for us in addition to continuing to advance Ormac, where we've got five drills turning today.

Well, let's dig a little bit more into this program that's underway right now. So 40,000 plus meters, so you're leaving it open to expansion.

What I read in that news release from February 19th is that 80% of the drilling is going to be in and around this airstrip and power line deposit.

Explain to us what the balance is going to be there in terms of infill, trying to upgrade ounces and expansionary resource drilling.

So remember last year, we really were drilling for the economics in the PEA, which is, you know, the what you can expect from Banyan here in the second half is our PEA, which, you know, we focused on that 5 million ounces of plus 1 gram.

This year, we are continuing to have a very significant component on focusing on the economic project, but also significant part showing the stepouts and the ability for this project to continue to grow.

So the balance we haven't totally announced our program yet, because we're still waiting for 56 holes from last year, including a little bit more on our silver.

And of course, when we're drilling off some of our high grade gold, we're also drilling off our high grade silver. So there's, it's a difficult balance to cut it off and say, you know, this is exactly what the drill plans going to be.

And of course, we adapt our program with what we're seeing. You can see a lot of this mineralization as we're drilling it and that, you know, you get visible gold, you get these known discordant veins.

You can see the scorn type mineralization. So, you know, we get quick logs every day and we either make holes deeper or shorter or expand out in different directions and adapt the program based on that, which is, is pretty unique.

It's nice to be able to visually see in the core, you know, the mineralization that you're getting.

So what about these other targets? 20% of the program is focused outside the power line and the airstrip deposits.

I had a few questions come in asking, how many targets will be drilled? How many holes into each? Do you have more information on what you're looking at really on these regional targets?

Well, we put out a map in our news release with 10 targets on it. And, you know, it clearly shows kind of the general areas.

But, you know, you always, you always adapt a little bit, you know, if you drill a hole and you think that it should have one type of rock type or, you know, if you encounter mineralization, well, then you probably will drill another hole.

So, when you're going into, to greenfield exploration, you go with a plan, but you are prepared to adapt it based on what you find or maybe you find the structural orientation is different than you're thinking or, you know.

So, yes, we got 10 general targets and they're on the map that's on our website and in our news release. And we'll get more information as we start to get out and drill those programs.

And of course, some of those you drill based on time of the year when you can get access. And, you know, thankfully, we have to drill rigs available for that that we've already secured.

So that'll mean that we'll really optimize them based on location and also cost to get out to those areas.

Well, there hasn't been any drilling outside of this area, correct? These are truly new targets that you and your team have developed all on your own.

One area has had three holes in it historically. And then there is an area in the gold dome kind of in the center of our block that was owned by Victoria that has some drill holes.

And that's super useful because it gives us indication of the geology and the mineralization. But no, our new specific targets have not been drilled.

Now all these targets similar, maybe in nature to what you found or at least what you're looking for compared to air strip and power line.

Well, they all have really strong geochemical signatures, geophysical signatures that indicate they either could be like or Mac or be, you know, a similar kind of deposit.

So yeah, that's it's there's lots of exploration upside on our property. And, you know, we we acquired it since 2020 slowly and steadily so that now our claim block is continuous.

And I love the exploration side. You know, I grew up in exploration with my dad. So as much as developing a project that might become become a mine is exciting.

And I think our PA economics are going to really surprise people. The exploration side is is kind of where you have that, you know, the thrill of the chase.

And I think my team's done an exceptional job identifying targets. So yeah, that that is exciting.

So since the program just started that February 19 news release was a commencement of the program can give us an update on how it's progressing.

Sure, well, we got the camp open and you got to move some snow and get everything running and do your maintenance. And then it got cold for a little a few days.

So we took a pause before we put the drills on the pads that we had ready. But now we've got four drills and our fifth drill starting up here today.

And we've got one drill, which is already completed a hole. And the other four or the other three that are drilling right now will very quickly complete their first holes. So yeah, we're off to the races and kind of once you get going and you get the bugs worked out of the first hole.

Then, you know, things kind of work one like clockwork because we're really well set up there. You know, the temperatures are pretty moderate. You want you want a little bit of cold to keep the frost in the ground so that you can take advantage of that snow pack.

But my teams, you know, been used to operating in this kind of temperatures. And there's actually a whole lot of holes we want to get drilled before that snow pack melts.

And it's this time of year is so beautiful in the Yukon. You know, the days every day you can noticeably see the day lights getting longer.

So yeah, that that I think and our team so excited gold prices the success we've had, you know, you can see see it in people's steps as they're, you know, getting bringing the core in from the drill. So yeah, look forward to lots of news flow from our drilling this year.

Well, let's also cover the news from yesterday. Then some more high grade gold mineralization from the airstrip deposit.

We're seeing consistent results over that one gram per ton. You've been on the show saying that you have been focused on about five million ounces of over one gram per ton.

Question came in asking what do you see as the allocation of that five million ounces between power line and airstrip considering power line does carry a lot more of this resource.

So last year, we drilled 50% of the holes into airstrip because it was a smaller resource. It was only one seventh of the resource, but that wasn't because the geology wasn't perspective.

It's because we really hadn't focused on drilling it. So, you know, over the years power line because it had better recoveries as a heap, we're not a heap.

Leach anymore. We focused on that. So sixth seventh of our deposit is power line. Last year, we drilled 40% of the holes on power line focused on those one gram zones as you were talking about.

So the fact that the deposits aren't the same size isn't really the main, you know, point, the airstrip we can see that we've got two one kilometer stepouts both east and west.

So we could add a lot of ounces to airstrip showing the consistency of those high grade zones and that there are predictable consistent high grade zones was a definite goal of the project because we want or the drill program last year because we want to be able to show that these starter pit areas that gold mineralization is consistent that there's this high grade core that you'll mine in the first few years of mining, which will really drive the IRR of your project.

So we think we've been successful in that and that these results, you know, a specific hole when you've got this big of a deposit isn't all that meaningful, but when you put it all together and you see how the models coming together and you see how these high grade domains are connecting and being predictable, that's what's really important.

So we know we can grow both airstrip and power line both laterally, you know, east, west south for power line. We had some big step outs 300 meter step outs earlier on that, you know, clearly we were kind of looking for a pit edge and waste.

We didn't find it. And then of course at depth and even at depth with a $5,000 gold price. Remember, we did our last resource at a 2050 gold price.

So that would only take the pit down, you know, to the maximum 250 meters. If you even increase that to 2500 meters, you're going to drive that pit deeper and get more

else is simply by changing the gold price. I'm never mind if you go to a $5,000 gold price, which, you know, you won't use it as a study because that's a little too aggressive.

But, you know, at spot price, look at what the value of this project will be and there will be a sensitivity chart in our particularly in our PEA when we put that out in the second half of this year.

And I think that will be really interesting. I'm looking forward to it.

Oh, I think a lot of people are looking forward to it. But in the meantime, before we even get to the second half of next of this year.

Look, you even mentioned you have 56 drill holes just from last year's program. And now you're back drilling this year. So newsflow wise.

Is it just going to be drill results after drill results for us to watch out for?

No, we might have a few other surprises for you because we do like to do that.

But certainly we'll have the rest of those drill results probably by, you know, it'll late March early April.

You know, sometimes you have QA QC problems at the lab and it takes a little bit of time to make sure you get complete holes that you can put out.

So they're coming. Then we'll have our mineral resource update, probably late April early Mayesh.

So second quarter. And then we'll move right on into that PEA, which will be in the second half.

And yes, we'll have drill results pretty consistently then from this year's program.

And we learned a lot last year on how to target high grade. Of course, silver is still a very interesting for us.

We didn't actually chase that EG1 vein up to surface that we intersected over, you know, a 20 meter width or length depth.

There's lots of targets for us to follow up on. So, and it's a bit hard to prioritize them.

You know, when it's cold, you want to drill the ones that are swampy first that you need to drill.

But we also have some ones that we really like to drill early and get some answers about how continuous that silver is et cetera.

So yeah, it's going to be exciting.

Absolutely. Well, Tara, thank you very much for this update and answering those questions.

Everyone listening, please keep sending me your questions. I'll get Tara to address those on future calls.

And again, Tara, Christie, President and CEO of Banyan Gold company is traded on the TSX venture exchange under the symbol BYN and on the OTCQB under the symbol BYAGF.

Tara, thanks for the update today.

Thank you, Cory. Really appreciate it.