When it comes to Japan-Canada trade, Canadian companies tend to sell mineral resources to the east Asian country rather than mine them there.
But a small number of Canadian explorers are going against that grain in their search for Japan’s best kept secret: its array of high-grade gold prospects accessible by top notch infrastructure and in a geopolitically stable environment.
Vancouver-based explorers Japan Gold (TSXV: JG) and Irving Resources (CSE: IRV) together have more than 40 pre-resource projects on Hokkaido, Honshu and Kyushu islands where strong past production indicates potential for economic deposits.
Their entry into Japan was made possible after the Japanese government in 2012 amended its mining law to kick
The country today has only one producing gold mine – Sumitomo Metal Mining’s high-grade Hishikari mine on Kyushu which has produced about 9 million oz. of the yellow metal since 1985 at head grades of about 20 grams gold per tonne.
Almost a decade ago, John Proust, a resource industry veteran and currently CEO of Japan Gold, was searching the world for a new mining opportunity.
“My mandate was: high grade gold in a safe geopolitical jurisdiction that was respectful of foreign investment,” Proust told The Northern Miner. “We did due diligence on many ideas, and one of them was that Japan had just changed the mining law. It was luck and timing that we got to Japan when we did.”
Japan Gold began its work there in 2014, becoming the first foreign explorer to apply for prospecting rights.
All of its 32 projects sit on 47 closed gold mines, in areas with low-sulphidation epithermal mineralization.
“Our idea isn’t to reopen a little old gold mine,” Proust said. “To me these mines are indications there’s gold in the system and they vary from a very small operation to larger operations where there was a gold rush with lots of people.”
And because most historical mining in Japan stopped decades before the advent of modern geochemistry, geophysics and engineering, many of the epithermal veins deeper than 100 metres weren’t explored.
One of the benefits of applying geophysics to the historic mines is it helped Japan Gold, under its ‘Barrick Alliance’ joint venture with Barrick Gold (TSX: ABX; NYSE: GOLD) secure six projects that the gold giant would solely fund as they advance to a three-year evaluation phase of geophysics, drilling and assaying. The JV was formed in 2020 and covers most of the junior’s projects, though Japan Gold acts as manager of each one, subject to Barrick’s right to become manager at any time.
Barrick rival Newmont (TSX: NGT) holds a 10% interest in Japan Gold.
To seal the JV deal with Barrick, Japan Gold showed the gold major its geophysical studies across 2,100 sq. km revealing that almost all historic mines in the country are adjacent to gravity highs, where older basement rocks have pushed up through younger volcanic rock, Proust said. Results from geochemistry studies on waterways and rock samples using bulk leach gold analysis (BLEG) revealed anomalous gold areas intersected with those highs, indicating areas of prospectivity.
Barrick decided last summer that the six projects (three on Hokkaido, two on Kyushu and one on Honshu) could host tier-one or tier-two orebodies — defined respectively as 5 million oz. or more and with a potential production of 500,000 oz. a year for at least 10 years; or 3 million oz. or more, with production of 300,000 oz. a year for 10 years or more. There are two other project areas in Hokkaido and Kyushu that Barrick might later add to the second evaluation phase.
Another 23 of Japan Gold’s projects weren’t advanced by Barrick because they didn’t meet its criteria, though they remain in the Alliance. Proust notes that the major still funded those projects’ initial evaluations and the junior can keep that information for use with other possible joint ventures. Four of those projects have been chosen for geophysical surveying and up 6,000 metres of drilling in 2023.
Japan Gold’s two, 100%-owned projects are Ikutahara on Hokkaido, which covers 20 historic gold mines, and Ohra-Takamine on Kyushu, near Hishikari. They’re outside of the Alliance and Newmont has a right of first refusal to become a partner in them.
Drilling at Ikutahara’s Saroma prospect last summer returned high-grade silver results with gold mineralization, the company reported in December. Ikutahara is the company’s most advanced project and is located about 250 km northeast of the prefectural capital of Sapporo.
Highlights include 1.05 metres grading 1.3 grams gold per tonne and 1,449.5 grams silver from 90.5 metres in hole IKDD22-012; and 3.1 metres at 0.4 gram gold and 475.7 grams silver from 104.75 metres in hole IKDD22-009.
But Japan Gold has faced challenges working in the Asian country, especially with its drilling capacity, most of which is channelled into the government-subsided geothermal industry, Proust says.
“There hasn’t been much exploration with diamond core drilling. The equipment is antiquated, and the skillset isn’t focussed on that,” he said. “We tried Japanese drillers at first but it wasn’t cost effective. So I decided we would put our own drilling division together.”
The explorer purchased and imported four rigs into the country. After negotiations with the government and the creation of a special driller visa category, Japan Gold brought in 26 workers from Indonesia to work the drills.
Proust acknowledges his company has no timeline towards a preliminary economic assessment (PEA) or prefeasibility study, and is for now focusing on evaluating the most prospective areas.
“Barrick has picked projects with potential, so now they’ll have drilling and advanced geophysics, that’ll help us advance them to PEAs,” he said.
In the first quarter of 2023, the company plans to start drilling three holes of up to 2,100 metres on the Mizobe property, and conduct geochemical surveying to define drill targets at Ebino, the two Kyushu projects in the Barrick JV.
At Ikutahara this year, BLEG sampling and controlled source audio-frequency magnetotellurics (CSAMT) are aimed at advancing prospects with drill targets and setting new prospects for possible drilling in 2024.
Hoping for future Hishikaris
Irving Resources CEO Akiko Levinson, worked for many years in mining in Africa, and it was relatively recently that she turned her attention to exploring in Japan. Levinson divides her time between Vancouver and Japan, where she is a citizen.
Several years ago, looking at the conditions and grade at Hishikari, she realized “there can’t be just one” like it in the country.
“The more we’ve been exploring in Japan we feel there’s opportunity to have another Hishikari… or a chance to have another sizable gold mine using today’s technology,” she said.
Levinson formed Irving in 2015, spinning it out of Gold Canyon Resources which had a rare earths exploration joint venture in Malawi with the Japan Oil, Gas and Metals National Corporation (JOGMEC).
“It really made sense because of our history in Africa in JOGMEC and I know the Japanese government and mining companies,” she said. “And people in general have been very helpful in Japan. I think we’ve been very fortunate.”
The company is focused on identifying high-silica and high-grade epithermal gold-silver veins that could yield smelter flux —
– a purifying agent — – for use in Japan’s base metal smelters. According to Irving, Hishikari ships its ore to copper smelters, which use the flux and recover gold and silver in the refining process.
Most of Irving’s 10 exploration projects are on Hokkaido, with its lead project being the 171.4-sq.-km Omu, consisting of the Omui, Hokuryu and Omu Sinter targets hosting high-grade epithermal gold and silver veins. Omu is located 200 km northeast of Sapporo.
Yamagano, just southwest of Hishikari on Kyushu is its next main focus. Like Japan Gold, most of Irving’s projects sit on or near historic gold mines.
Diamond drilling last November at Hokuryu intersected high-grade gold-silver veins, Irving said in a news release.
Highlights from hole HKR-001 include 0.4 metre grading 3.12 grams gold and 469 grams silver per tonne from 266.5 metres depth, 1.7 metres grading 4.27 grams gold and 7.55 grams silver from 292.1 metres depth, and 1.2 metres at 6.45 grams gold and 13.22 grams silver from 502.4 metres depth.
Newmont has since 2019 thrown its support behind Irving with US$20.4 million in investments and the issuance of 13.2 million shares of the company, with the most recent coming last July when it announced a $4.4 million investment and 4,577,788 common shares at a price of $1.23 per share. Levinson said the Colorado-based miner is also involved in planning exploration with Irving.
Like Proust, Levinson has had issues with drilling in Japan and has relied on Canadian drillers and some Japanese.
However, the company plans to begin training local drillers, especially as it plans to ramp up activity at Yamagano where it’s targeting an initial drill program for this year.
And, in contrast to its reputation as a high-tech nation, Japan has limited technology for geophysics work, Levinson explained.
“They haven’t done that in Japan for many years. We needed to bring geophysicists in from abroad,” she said. “Originally we had Australians and now we have a Canadian team in Kyushu.”
Also in 2023, Irving plans to resume diamond drilling at Omu, specifically by testing new targets and vein extensions at Omui, as well as follow-up drilling at Omu Sinter and Hokuryu, Irving said in a news release in January.
It has hired Chilean drillers who will work at Yamagano and Omu.
The company believes it can drill year-round moving forward, though Levinson could not comment on how many metres of drilling the company plans for this year.
Japan Gold shares traded at 27¢ on Friday, in a 52-week window of 20¢ and 34¢, valuing the company at $60.9 million.
Irving Resources shares traded at 87¢, in a 52-week span of 65¢ and $1.84, giving it a market capitalization of $62.9 million.