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Tracker - September 28, 2021: No XRF arsenic based gold sneak preview of Endurance core drilling at Reliance
 Endurance Gold Corp provided an update on September 27, 2021 for its half completed 4,000 m core drilling program at the 100% optioned Reliance gold project in southwestern British Columbia. Endurance has completed 7 holes at the Eagle zone discovered in 2020 at the southeastern end of the 1,200 m by 300 m Royal-Treasure Shear corridor, and 3 holes into the Imperial zone with the fourth currently underway. The rig will then test the Crown Zone between Imperial and Eagle, and then possibly move back to Eagle to test for a southeast extension in the Upper Eagle area which may be a northeast fault displacement of the Eagle zone that explains the absence of arsenic values in Douglas fir branch values along the Royal Shear beyond Eagle South.
The drill program began on August 25 and is expected to be finished by early November, though given the uncertainty of lab assay turnaround it may be late November before we get the first assay results. Contrary to my expectations, Endurance is not reporting arsenic values for core drill sample intervals as it did with the earlier RC drilling because, unlike with a bag of RC chips, a handheld XRF unit cannot yield meaningful readings when pointed at core which exhibits sporadic arsenopyrite veinlets. The strong correlation between gold and arsenic XRF readings established by the RC program and confirmed by geochemical assays offered hope that we could see mineralized gold zones take shape through summer drilling well before we see assays. We will thus be flying blind until December. Ironically, only hole #6 of the 7 holes drilled at Eagle to depths of 84-262 m has intersected unoxided mineralization, 24 metres of sulphides which management interprets as a true width. Although Endurance is not bothering with arsenic XRF readings, the arsenopyrite with which the gold is associated always occurs with pyrite and pyrrhotite which is visually identifiable in core, so the company is able to see where the likely mineralized zones are showing up. The news release is very technical and without sections it is hard to understand.
The stock price has sagged in part because of the general resource junior market funk, but also because the geometry of the mineralized zones and their size potential are not sufficiently understood to allow dot-connecting and tonnage guesstimating. CEO Robert Boyd likens the northwest trending Royal and Treasure faults to the rails of a ladder, with the rails themselves not mineralized because they merely bound the sheared corridor, but the gold zones occur like flat rungs between the ladder rails. This is called a Ridel structure. The orogenic fluid would have flowed up through the corridor and dropped its gold payload within the dilation zones between the ladder rails that the shearing opened up earlier. The problem with this ladder metaphor is that one tends to visualize a 1.2 km long ladder with 300 m wide rungs but two rails only 15-30 m in the short dimension. In reality this Royal-Treasure corridor can be 3-4 km deep, with numerous sets of ladder rungs repeating themselves. The Eagle Zone appears to be a 15-30 m thick rung that is 100-150 m "high" and dipping 35 degrees to the southwest, and ideally stretches across the 300 m width of the corridor. Within these ranges such a rung could represent tonnage footprints of 1.0-3.5 million tonnes. How many such "rungs" repeat themselves near surface along what is now a 1,500 m corridor if you include Upper Eagle, and 2,000 m if you include Carter at the southeastern end where the arsenic fir anomaly reappears? At 10 g/t gold each rung could be 300,000-1,000,000 oz. Maybe there are 3 such near surface rungs within the Royal-Treasure corridor giving us a 1-3 million ounce system? And as you chase the corridor down to a depth of 3,000 m, how often do these rung sets repeat themselves? Perhaps five times, giving us a 5-15 million oz potential target? Maybe only 2-5 million ounces of the grade averages 5 g/t? A lot of drilling will be needed to find out. The press release states that 3 of the Eagle holes intersected a "lower but narrower zone of quartz sulphide veining and stockwork interpreted to be dipping 80 degrees to the southwest". If this runs a medium-high grade similar to the Eagle zone it will be a very positive development.
I asked Robert how to reconcile the shallow dipping rung model at the Eagle zone with the near vertical dip of the Imperial zone. The current thinking is that the Imperial zone may be a feeder structure that received all the historical attention because that is what Charlie Boitard first intersected. It was chased down-dip like a simple orogenic vein structure. The 4 holes it will receive as part of this program are designed to provide fresh core that enables Endurance to understand the structural controls of the Imperial feeder and how it might relate to what is now perceived to be the meat of this mineralized corridors, the Ridel dilation zones. Robert points out that gold seems to be everywhere within the Royal-Treasure corridor.
For example, on September 13 Endurance reported that prospecting and channel sampling along the Treasure fault yielded 4.7 m of 9.19 g/t gold at the Grey Rock prospect near the road next to Carpenter Lake. So I asked, why don't you pretend that this is like Osisko's Windfall project in Quebec and just grid drill it and let the software figure it out? His response was that we are not yet at such a tipping point, we need to better understand the geometry and grade distribution, plus we need to do this carefully to secure the support of community stakeholders such as the First Nations and the permitting bodies.
I have Endurance Gold Corp as a Good Spec Value rated Favorite because although I am not yet comfortable conducting an outcome visualization, the geological context and scale of the mineralization at this discovery allows one to imagine a multi-million ounce medium grade gold system worth more than the $500 million to $1 billion future outcome value needed to make the $28 million project value implied at 141 million shares fully diluted and a $0.20 stock price represent fair speculative value. The Ultimate Implied Outcome chart below for Reliance shows that for $28 million to be the mid-point of the 2.5%-5.0% fair value range for a discovery delineation stage project under the rational speculation model the future outcome need be only CAD$751.4 million. I believe Reliance has potential for a higher value outcome, and the tipping point for market recognition will come at the end of 2021 when management has a much better understanding of the orogenic gold system at Reliance.
*JK owns shares in Endurance Gold Corporation
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