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The mineral exploration agreement between Goldeye Explorations and Sandy Lake First Nation had been a long, long time coming.
Robin Luke Webster was just four years old when his father, Blaine, first staked claims near Sandy Lake in 1986. So much time had passed that Robin had gone from bring a pre-schooler to manager of corporate affairs and community relations at Goldeye, where Blaine is chief executive officer.
Sandy Lake hadn’t supported the initial exploration work that followed Goldeye’s claim staking in the ’80s – line cutting, surface geophysics, an airborne geophysical survey and a limited amount of drilling – so the project was put on hold. Goldeye tried to re-activate the project in the early 2000s, but Sandy Lake still wasn’t ready to endorse it. Representatives of the First Nation and Goldeye began to talk with each other at that time, however, and by 2004 the band council had assigned one of its members for liaison with Goldeye.
Finally, in the summer of 2013, Goldeye got the go-ahead to channel sample some of its claims in the Sandy Lake Greenstone belt, part of the First Nation’s traditional lands, and the results showed “significant gold values.” At the suggestion of a Sandy Lake resident, the exploration project name became “Weebigee,” Oji-Cree for the goldeye fish in area waters. And on Nov. 18 that year, Chief Bart Meekis of Sandy Lake and Blaine Webster signed a formal, five-year exploration agreement for Weebigee project activities.
Robin, who joined his father at Goldeye as an advisor in 2012, attended the signing, which took place in the council chamber at the Sandy Lake band office. “There was a strong feeling in the room that something very important was taking place,” he recalls. “I remember Deputy Chief Robert Kakegamic saying that we were making history at that moment and I was proud to have played a role.”
Shareholder
Of course Goldeye and Sandy Lake hope the future holds the best moments for their partnership in Weebigee.
Upon signing, their exploration agreement entitled Sandy Lake an ownership stake in Goldeye – 500,000 common shares, as of this fall valued at about $30,000 and representing just over one per cent of the total shares. Sandy Lake will gain the same number shares by the end of 2014 and again in 2016, with renewals of the agreement. (Although it’s a five-year agreement, the terms made it subject to renewal at the end of the first and third years, allowing Sandy Lake the chance to evaluate along the way how the exploration is unfolding.) The shares are to be held in a trust established by Sandy Lake First Nation for the benefit of the community.
“The shares may not hold an incredible value at the moment, but they are a seed for the future,” says Robin Webster, appointed Goldeye’s president in October. “In the event that a major discovery is made … the shares could be worth a substantial amount.”
If there is such a discovery by Goldeye, chances are it will come at its flagship Weebigee project, since that is currently the focus of all of the company’s exploration efforts. Goldeye has other exploration projects elsewhere in Ontario, and in B.C. and Chile, but none of those is active.
The Weebigee project consists of 363 claim units over about 6,000 acres, covering gold and base metal showings south of the Sandy Lake reserve. There are three distinct areas to the project: Northwest Arm, Canoxy and Sandborn Bay. All of Goldeye’s exploration work so far has been in Northwest Arm, where visible gold was noted in half of 23 drill holes. Webster summarizes in one word the drill results there so far: “fantastic.” Even more importantly, he says, “We believe that they indicate that the area has the potential to host a major gold system. A methodical program of exploration and drilling is necessary.”
It won’t happen quickly or cheaply.
Weebigee is still at a very early stage of exploration, even though Goldeye spent close to $1 million on it in the first nine months of 2014, after exploration expenses the previous year of about $300,00.
Several more years of steady exploration, costing tens of millions of dollars, will be required at Weebigee before there will be enough information to decide whether to build a mine, Webster says. A feasibility study on the economics, which would include engineering and environmental studies, would only be started once exploration at Weebigee is far more advanced.
Fundraising
To get to that advanced stage, a small junior exploration company like Goldeye has to rely mostly on financing from other investors.
“We don’t have $20 million in the bank,” Webster explains in a presentation at the Ontario Mining Forum this past June in Thunder Bay. In fact Goldeye, which has just two full-time and three part-time employees and hires project staff as needed, was left with only $265,000 when it had finished its drill program last winter. “Part of the way we continue is people like me put a chunk of each pay cheque back into the company and try to make it work,” Webster says.
Insiders, employees and board members own five per cent of Goldeye’s shares; investment companies hold about 20 per cent; and the remaining 75 per cent are owned by individual investors throughout Canada, including Sandy Lake, and worldwide.
But while Weebigee drill results to date suggest potential for “the next major gold discovery in Ontario,” Webster says, Goldeye wasn’t able to secure the new financing needed for $1.5 million worth of exploration and drilling it had planned for this past summer and fall. With the price of gold having fallen by more than a third since a peak in 2011, “Investors are nervous about funding junior exploration projects.”
Still, “We continue to promote the project widely and look forward to resuming exploration shortly,” Webster tells Onotassiniik in October.
As part of attracting investment in Weebigee, Webster says Goldeye and Sandy Lake are trying to show the strength of their relationship, in contrast to conflict elsewhere in northwestern Ontario that has sometimes led to project shutdowns and court cases. Webster’s presentation about Weebigee at the Ontario Mining Forum (a repeat of one made previously at the annual Prospectors and Developers Association of Canada convention in Toronto, with Wally Kakepetum and Monias Fiddler of Sandy Lake’s Land and Resources Office) was titled Walking the Path Together.
Aside from the five-year exploration agreement and its provision of ownership shares for Sandy Lake, Goldeye is committed to extensive community consultation and outreach for Weebigee, says Webster, and to ensuring increased opportunities and benefits for the community as the project advances.
Instead of flying experienced line-cutters into Sandy Lake for the channel sampling that took place in 2013, for example, Goldeye brought in a trainer to provide a course to about 10 locals for certification in chainsaw use, standard first aid and WHMIS (workplace hazardous materials information system). Several of them were then hired to work on Goldeye’s summer program. “We try to do as much hiring of community members as possible … (for) line-cutting, geophysics, drilling,” Webster says. With more Weebigee project investment will come more training and jobs, he adds.
“It has taken a very long time to get to where we are today but we have laid the groundwork necessary for success.”
Ultimate Goal
As an exploration and discovery company, not a miner, Goldeye’s goal at Weebigee is to fully explore the area for gold and “make multiple significant discoveries,” Webster says. Such discoveries would, of course, lead to significant financial benefit for Goldeye’s shareholders, including Sandy Lake First Nation.
As the project becomes more advanced, Goldeye will need to bring in partners that have capabilities beyond those of a junior explorer. “Ideally, if we continue to obtain solid (exploration) results, a major company might become interested in partnering with Goldeye,” says Webster. “This process is something that has been discussed at the community level. Goldeye’s task is to make discoveries and bring in partners who understand the Goldeye-Sandy Lake First Nation relationship and commit to ‘Walking the Path Together.’ ”
It’s a path that could eventually lead to a gold mine. “The ultimate goal,” says Webster, “is to see mining activity near Sandy Lake, and mining – done in a socially and environmentally responsible manner – is where the real opportunity for sustainable economic development is.”