Categories: Precious Metals / Energy
Topics: Gold Stocks / Lithium Stocks

Lion Rock Resources (TSX-V: ROAR)(OTC: LRRIF) Chief Geologist Dr. Jeff Hrncir on Targeting High-Grade Gold-Lithium-Tin in South Dakota’s Black Hills Mining District with Drills Set to Turn

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the chief geologist for Lion Rock Resources (TSX-V: ROAR)(OTCQB: LRRIF) — Dr. Jeff Hrncir. Jeff, it's great to have you on. How are you today?

Jeff Hrncir: I'm great, Gerardo. Thanks for having me on.

Gerardo Del Real: Listen, I want to start with your background. I mentioned you’re a chief geo but, honestly, you wear a lot of hats for Lion Rock. The doctor title is definitely one that sticks out to me for this reason: your background is specific to this project and the geology of this project.

And so when I look at your neighbors, and I see Homestake — and I see 42 million ounces of gold produced — and I look at the high-grade tin that was produced, and I look at the high-grade lithium that exists all over this property… how the heck does this stay a secret or untapped for this long?

There's historic production, and I want to talk about that. But I want to start with your background because I know that plays an important part as to how this was kept a secret for so long. 

Jeff Hrncir: Yes, it does. And so I think, as it will become apparent in our conversation today, I'm a geologist by background and training. I come from a family that, while they're not necessarily geologists, we’ve been around the mining business for a very long time. And so my whole life, I knew I was going to be an exploration geologist.

My dad was actually president at the South Dakota School of Mines just outside of the Black Hills. And so I've been deeply connected to this community of geologists and engineers and miners here in the Black Hills basically my whole life.

When it came time to do my Master's work and, ultimately, my Ph.D., I really wanted to study the rocks in the Black Hills. Study-wise, there's so much gold in these rocks specifically. Other people have looked at the geology before but it's never been from that angle of why is there so much gold, could there be any big things left, where might they be hiding, and how could the geology help guide us to that?

I spent years doing that stuff in grad school and then came away with this impression that the Black Hills really are one of the last great search spaces in the world — specifically for gold but for some of these other things as well.

Gerardo Del Real: You mentioned ‘in the world.’ And again, this is an educated take. It's one thing for me. I'm a non-geologist. I see the grades. I see the tin grades, the gold grades, the lithium grades. And as a shareholder — or, I should say, as an investor in the company — I get excited. I can't wait.

But then, you add the fact that it’s on private land, that it’s in the US, that the permitting is fast-tracked… how does this stay private up until recently for so long?

Jeff Hrncir: Yes, I think it gets down to the fact that it's on private land, and the same family has owned it for over 100 years. They've never actually done a formal exploration deal with a company to come in and explore it.

Over the years, some various lessees have come in — they've taken a little bit of tin out, a little bit of tantalum — but nobody's ever explored the gold potential of this property. So this is the first time that this little island of private land in the middle of this phenomenal district with all this potential is ever going to be explored.

We're going to be the first people to ever explore it using modern techniques and modern thought.

Gerardo Del Real: That's absolutely incredible. And for context for everyone that's listening, I just want to provide some historical underground gold results: 61 meters of 5.15 grams per tonne gold with a 3.5 km shear zone strike length that’s just waiting to be tested. 

I want to start by talking about the gold potential — and we’ll go one at a time. We’ll talk lithium, and we’ll touch on tin just a tad bit at the end. In terms of the gold potential, I don’t want to put an exploration target on it because it’s never been explored with modern-day technology. But I would like to get a sense of the scale of what could be there because the grades and the widths of mineralization — the historical ones — stick out to me like a sore thumb.

Jeff Hrncir: Yes, they do to me as well. And a lot of that was difficult to put together. They're from very old reports that are not public information; we dug them out of archives.

But putting that whole story together, the property just lights up for its gold potential when you start piecing all of those bits of information together. And when you take a step even further back, the Tinton District that the Volney property is situated in — and it kind of forms the core of that district — was originally known as a placer gold camp.

In the 1870s, 1880s, these guys were out in the creeks and gulches mining all of the loose placer gold nuggets and flakes out of the gravels. And they produced at least 250,000 ounces and maybe in excess of 400,000 ounces. Every little gulch draining the central ridgeline that runs up the middle of our property yielded placer gold including nuggets up to 28 ounces.

And it’s just inconceivable that that gold does not come from basically the center of the property, from this topographically high ridge. And during the early 1900s, when people were exploring the tin potential of that deposit, they drove these tunnels and shafts into the hill. And while they were trying to exploit the tin resource, they happened to pass through these gold zones — and that’s where these historical numbers come from.

They didn’t even care about the gold. They were looking for the tin. For us today, those are just incredible widths and grades, especially sitting basically at surface. People are scouring the world looking for 50 meters of 5 grams per tonne Au. And these days you usually have to go a kilometer underground to find something like that. But for us, it could be sitting there basically at grassroots.

Gerardo Del Real: How do you methodically approach vectoring in toward the source because the numbers you just cited in the gulch are insane, right?

Jeff Hrncir: Yes.

Gerardo Del Real: If you come anywhere near the source, this has the potential — just as a gold project — to be absolutely phenomenal. How do you vector in methodically to try to locate that source?

And you touched on it a bit. I mean, you mentioned being at surface and how you'd be surprised if it wasn't on top of where you described. How do you vector toward that?

Jeff Hrncir: Yes, so exploration, to my mind, really has three steps. Step one: identify what you're looking for — what are you trying to find? Step two: identify a place where that logically could be.

But then, step three is the most important one — and I think this is where a lot of explorers fall off the track — and it is that you have to aggressively collect your own primary data. And so we've been doing that for the last year.

We've done a property-wide rock and soil geochemistry program on a really tight grid that's enabled us to see in incredible detail where the gold is and is not. We've completed aerial geophysics over the property so we can now marry the geophysical response of mineralization to what we see in the soil and rocks.

So we now have in three dimensions — because of the inversions we can do on these geophysics — and we can actually see all of the blobs of potential gold mineralization; every single one of them. And because we're located on private land and the permitting process is so easy and streamlined, we can put a drill right down the throat of every single one of them.

We’re going to start with our best target first, which is where those historic numbers were. It’s where the gold and the rock programs have continued to show that that really is the best gold anomaly on surface… and it’s really significant.

What has impressed me is just how big it actually is. It’s about 100 meters wide at surface. That particular pod of mineralization is about 450 meters long along strike. If those kinds of grades hold up, we could be looking at something really special just in that one target.

Gerardo Del Real: When you say ‘really special,’ it sounds like millions of ounces. I’m just doing the math here: 100 meters wide, 450 meters long.

Jeff Hrncir: Yes, exactly. Every 100 meters you could prove that it extends down through drilling… so this thing could reach multi-million-ounce pretty quickly. And that’s the potential of this district, frankly.

When you look around the world at all of these great orogenic gold camps — like things in the Abitibi, things in the Eastern Goldfields in Australia — there’s never just one giant deposit. They are always surrounded by a halo of large, significant things.

So the one for Homestake is just really weird to have this 42-million-ounce producer sitting there in this district with basically nothing else known. This is a district that credibly has the potential to produce multiple 10-million-ounce deposits and a lot of 5-million-ounce deposits. 

That missing halo is really what we’re looking for around Homestake… and they could still be world-class discoveries in their own right.

Gerardo Del Real: Absolutely. Now, that’s just the gold. I happen to believe that lithium is bottoming — and I’ve been wrong about this for the last year, by the way — but it’ll bottom eventually.

Jeff Hrncir: Yep, me too.

Gerardo Del Real: Yes, it'll bottom when it bottoms. I mean, the supply and demand fundamentals are clear. How long can China go ahead and play the interim game of flooding the market with cheap supply? Who knows? But it will turn. I'm absolutely convinced of that.

And anything in North America — especially on private land — is going to fetch a premium. I've spoken to other geologists that have been on the property about the lithium potential, and they walk away just flabbergasted about the grades, the widths, and what's potentially there.

So when we talk about maybe a world-class gold deposit on private land in America — look, that’s enough for me to say, ‘Here, take my money.’ But now, you’re also telling me that there’s potential for world-class lithium grades and deposits on private land.

Can you talk to me about the lithium, Jeff, because it’s rare when we get potentially world-class gold and world-class lithium all on the same small property.

Jeff Hrncir: Exactly, and like you said, sitting in the geographic heart of North America next to infrastructure. We're 10 miles from rail. I mean, it’s an incredible find.

And honestly, that’s what drew the Lion Rock team to the property in the first place. We started the negotiations with the landowners… starting down this track of getting the property when the lithium price was going crazy three or four years ago. And it really did stand out as the best lithium opportunity in North America for the Lion Rock team to pursue.

There’s a lot of lithium expertise on the team. And these pegmatites have never been systematically explored. Everyone has commented that they're lithium-bearing. A few people excavated a couple of tonnes of it during World War II to supply lithium for the war efforts but nobody’s ever done that systematic sampling that you need to do to prove that there’s an orebody there.

We showed up on site and started sampling and started seeing three, four, five percent lithium oxide all over the place. Then, last year, we started mapping for the first time. The property hasn’t even been geologically mapped before. We didn’t even know how many pegmatites there were. We ended up mapping over 35 significant pegmatites greater than 10 meters width.

We sampled every single one of them in the course of mapping, and they all yielded values over 1 percent and up to four to five percent. So these are all high-grade lithium pegmatites.

All we need to know now is if there’s tonnage to this and if there’s an economically viable deposit. The grade is certainly there. The grades are really impressive to me. I mean, in a world where 1.5% is a great economic grade to have, and relatively large pegmatites potentially have decent volume at 4%; it’s almost concentrate grade for lithium. And it’s there at surface just like these gold targets.

I believe there were only eight historic drill holes drilled there during World War II, and the deepest one went only 50 meters below surface. And some of those holes yielded lithium intercepts.

Gerardo Del Real: So we know it goes down at least to 50 meters, right?

Jeff Hrncir: Yes. And hopefully, they'll go down a lot further. 

Gerardo Del Real: And again, this is outcropping.

Jeff Hrncir: Yes, outcropping. And some of these pegmatites are large. They’re 700 meters long and up to 300 meters across. The 4% lithium zones within them are 100 meters across within those pegmatites. These are big things. It’s not a single spodumene crystal in a 10-meter-wide dike like you see in a lot of these other junior companies. These are big pegmatites.

Gerardo Del Real: I don't want the audience to be overwhelmed by the abundance of richness in the mineral system but I’d like to briefly touch on the tin. The historic tin production and the grades are ridiculous as well. Can you speak to that a bit?

Jeff Hrncir: Yes, and candidly, I don’t know much about tin. And until we started down this, I’d never really met other geologists, even before this process, that knew much about tin. 

But the Volney Project is situated in the Tinton Mining District, and it’s so named because it was one of the most productive tin districts in the United States historically. In fact, the Rough and Ready tin mine on the property was the single most productive hard rock tin mine in US history.

And there’s tin in all of this lithium. We’re sampling these pegmatites for lithium, tin, tantalum, niobium — these other minerals are present in them. And especially around the tin mine, you can actually go out and pick up cassiterite crystals up to the size of your fist. To me, that’s really unusual as well.

So when we’re drilling these pegmatites, all of those metals will get assayed for. There won’t be a dedicated tin program or lithium program. We’re going to drill the pegmatites, we’ll assay for all those, and we’re just going to see what the grades end up being on things like tin and tantalum.

We know they’re there, and we know that they’re there in such concentrations they were mined historically. So it’s what kind of a resource we can put together now through drilling.

Gerardo Del Real: I’ve been trying to chase you down here for a couple of weeks. You’ve been in the field doing the work. I am a happy shareholder, by the way, so keep up the great work. You’re in the field now. What comes next?

Jeff Hrncir: We’ll be finalizing the drill permit; we’re about to be fully permitted for 78 platforms — up to eight holes per platform.

To put that in perspective, that’s more potential drill holes than all of the other explorers in the district combined for the last five years. So it’s an aggressive program. But we think the property warrants taking a lot of swings, drilling a lot of holes, and so we’ll be ready for that.

We have all of the logistics settled. We have our whole office and core shed set up. All of the personnel have been hired. The logistics — down to getting the water source for drilling, the water truck drivers — all of that’s ready to go.

And I anticipate within weeks, hopefully, we’ll be drilling our first hole on the Volney Project.

Gerardo Del Real: I hate to put you on the spot but I’m going to ask you for the crystal ball: what are you expecting to see once those assays start coming back?

Jeff Hrncir: Yes, hopefully by August or perhaps early September, we’ll start getting assays back en masse. And I’m a gold guy specifically so maybe I’ll address the gold.

Gerardo Del Real: Let’s do it.

Jeff Hrncir: I really hope to see widths and grades like we see in those historical reports. Those reports were done by very credible geologists. They might be 100 years old but they were done by the state mine inspector and the head of the geology department at the South Dakota School of Mines.

These weren’t just random guys offering an opinion. And the work that we’ve done has shown that there are values up to 189.5 grams per tonne in boulders sitting in that gold-in-soil anomaly that’s 100 meters wide.

I hope we can actually, almost from grassroots, cut 100 meters of five grams per tonne Au. I think that’s possible on this property. And that is a bit of geofantasy — so put a big asterisk on it — but the geology has supported that kind of a target.

Gerardo Del Real: Well, look, if we get 50 meters of two-and-a-half grams, I’ll still be a happy shareholder.

Jeff Hrncir: That’s right… and I would really like to hit that 100-gram-meter threshold that I know a lot of people look for because once you start seeing 100-gram-meter-type intercepts, you know the thing is probably an economically viable deposit. So I’d really like to cross that mark and then just see how big it gets from there.

Gerardo Del Real: Yes, those ounces add up quick at that point, right?

Jeff Hrncir: Yes.

Gerardo Del Real: Jeff, it has been an absolute pleasure and well worth the wait. I want to thank you for your time. I hope you and I are chatting here in the following weeks and months talking about the vision, the plan, and then the results. The proof is in the pudding, right? We’ll see what that pudding is.

Jeff Hrncir: Yes, exactly.

Gerardo Del Real: It’s been an absolute pleasure. Thank you so much for your time, Jeff.

Jeff Hrncir: Thank you, Gerardo. 

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