Northquest Limited, a Canadian mineral exploration company, is proving that success can be found even in difficult market conditions.
JON NORTH, PRESIDENT AND CEO of Northquest, established the company in 2008 with the goal of providing resource investors with an opportunity to invest in a company with projects in prospective terrains across the world. In November 2010, after much analysis, Northquest acquired its first property in Nunavut Territory, Canada.
The 861 square kilometre property known as ‘Pistol Bay’ had previously been explored by INCO Gold (a subsidiary of the well-known INCO) in the 1980s. At the time, INCO discovered several gold occurrences in the area, particularly at the occurrence now known as the ‘Vickers Target.’
After INCO Gold left Pistol Bay in 1989, the property expired and became open Crown land. Although there were known gold occurrences, the area remained largely unexplored.
Upon acquiring the property in 2010, North and his team undertook a due diligence trip to inspect the area and sample some of the gold occurrences on the property. The team noted that the Vickers Target was very prospective.
However, North soon ran into a hurdle. Another mining company had also stacked claims on the Vickers Target.
“We immediately disputed the claims,” Jon North explains in an October 2014 interview. “The dispute took 2 years to be resolved. During that time we continued to explore the rest of the Pistol Bay property, and we avoided working near the Vickers Target.”
In June 2012, the Mining Recorder for Nunavut decided that Northquest held title to the claims at the Vickers Target. Two months later, the company drilled its first hole at Vickers.
“We published the results [of our first holes] in September 2012,” says North. “The results were spectacular. It was immediately clear that this was a very prospective gold occurrence and, potentially viable to someday mine.”
Although Northquest continued to explore and develop Pistol Bay’s other targets, Vickers became the company’s core focus. Vickers has since been de-risked and partly defined, with 24 holes drilled between 2012 and 2014. This year, Northquest drilled another 13 holes at Vickers.
“When we started drilling this year, we intersected a 200m long, 150m thick deposit with intersections from surface to a depth of 300m,” North notes.
But one doesn’t have to simply trust Northquest on the quality of the Vickers Target. In the spring of 2014 Nordgold N.V., one of the world’s largest gold mining companies, expressed their confidence in Northquest.
Nordgold is one of the world’s fastest growing mining companies and is a million ounce annual producer. Nordgold has a presence in four continents and is involved in many major mining operations. In early 2014, Nordgold purchased 25.26% of Northquest.
“Nordgold sent a technical team to the project in late June, spending three days inspecting the property. They liked what they saw and chose to invest,” explains North. “This speaks very highly of the technical quality of the property.”
“It’s an endorsement from a very large mining company that the project is good. They see an opportunity and want to be involved.”
With the new capital from Nordgold, Northquest can now intensify its development of the Vickers Target in 2014. Northquest hopes to extend the strike length of the deposit by 200m and continue to pierce the eastern extension of the target several times before the end of this year.
Jon North is confident that, through Northquest’s continued exploration and development of the Pistol Bay project, the area will soon be moved forward into the mining extraction phase.
“The options available to us are either an outright sale of the property, a joint-venture with a major mining developer, or to build a mine ourselves,” North says. “Any of these options are possible, depending on market conditions and property value. Our decision will be to do whatever is best for shareholders.”
Yet North knows his personal future is not in mine building. An entrepreneurial spirit, Jon North notes that he will always be an explorer at heart.
“If the best option for our shareholders was to build a mine on the target, we would do so. But we would ensure we had the best people in place to lead that development.”
“For now, we are an exploration company at heart – we exist to find new properties, no matter where they are.”