Jun 20, 2011 4:21 PM - 0 comments

The Yukon: The new address for gold

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By: Alisha Hiyate

Truly new discoveries of mineral deposits may be rare these days, but not so in the Yukon. Multiple greenfield gold discoveries, starting with Underworld Resources' White Gold project in 2008, have opened up three new gold camps and proven that the underexplored territory is fertile ground for juniors seeking gold.

Northern Tiger Resources (NTR-V) president and CEO Greg Hayes says prospector Alex McMillan, who discovered the most recent greenfield find - his company's 3Ace project - simply parked his truck along an established road, hiked in a couple of kilometres and sat down beside a quartz vein to have lunch.

"It ended up being one of the highest-grade outcrops probably ever discovered in the Yukon," Hayes says of the vein, which later returned grab samples that assayed as high as 4,820.6 grams gold per tonne. "That boots-and-hammer kind of prospecting can still have a lot of success in the Yukon."

In fact, Bill Sheriff, president and CEO of Yukon-focused Golden Predator (GPD-T) compares being in the Territory now to being in Nevada in 1970 - with decades of exploration success ahead.

"We've got 103 placers in the Yukon, of which sources have been discovered for three," he says. "That sort of potential in a First World country that's got a mining-friendly government. . . we're just at an incredibly good spot in history to exploit that."

While modern methods have been employed in the Yukon for the past 45 or 50 years, the typically short, three or four month field season translates to much less than half a century, says Carolyn Relf, director of the Yukon Geological Survey.

"If you tally up the full cumulative amount of exploration, it's less than twenty years that Yukon's been a target of modern exploration," she says. "So it really is terra incognita in a lot of ways.

Dozens of companies are endeavouring to get to know the territory and its gold potential better.

White Gold District

The White Gold district, named for the Underworld Resources project that prompted a $139-million takeover by Kinross Gold (K-T, KGC-N) last year, is in the Dawson Range, a northwest-southeast trending belt of Cretaceous-age intrusive rocks in the Yukon that forms part of the territory-spanning Tintina belt.

It's also the home of Kaminak Gold's (KAM-V) Coffee project, 130 km south of Dawson, and 30 km south of White Gold, optioned from the same now-famous prospector who discovered White Gold, Shawn Ryan.

Last year was a big one for Kaminak, with its market cap mushrooming tenfold to $200 million from $20 million on the strength of results from its 100%-owned Coffee project, which saw its first-ever drillhole in 2010. The early entrant into the White Gold district (it optioned Coffee in 2009) made eight major gold discoveries last year in a 15 by 5-km area of the 607-sq.-km property, starting with the very first hole (17.1 grams over 15.5 metres from 15 metres depth) at the high-grade, Supremo zone last May.

Kaminak's exploration program will be the biggest in the White Gold district this year. As of early May, the prospect generator, which has projects all over Canada, had working capital of more than $30 million, more than enough to support the $15-million exploration program it plans for Coffee.

This year the company is more than doubling the amount of drilling it did last year (16,000 metres) to 40,000 metres. The drill program, which began in April, will see three diamond-drill rigs and one reverse-circulation (RC) drill rig on the property. Kaminak will conduct expansion drilling of previously discovered zones - all of which are open in all directions and are near surface - starting at Supremo, Latte and Double Double. It will also drill test new targets Sugar, Americano West, Macchiato and Cappuccino in the fall.

The company also plans to take 10,000 soil samples in unexplored areas of the property to generate new targets for drilling in 2012, and follow up on an 8 by 4-km gold-in-soil anomaly 20 km southeast of the Supremo zone, and a new soil/geochemical anomaly 25 km northwest of Coffee, dubbed Apollo.

As with White Gold, soil sampling has proven a highly effective exploration method at Coffee and is what has made the rapid discoveries possible, explains Kaminak president and CEO Rob Carpenter.

"This part of the Yukon was never glaciated, which means when you take a soil sample, it's reflective of the bedrock below," he said in a presentation in Toronto in May. "(There's a) very good correlation between gold-in-soil trends and structures - you drill below that and 100% of the time you hit a gold-bearing structure."

The lack of glaciation also means the zones at Coffee are weathered to at least 100 metres depth, making the gold easier to recover. Initial metallurgical testing of oxide mineralization at Coffee has recovered about 97% of the contained gold.

The property, which hosts mineralization very similar to that at White Gold, shows potential for both high-grade and bulk-tonnage gold.

Gold mineralization at the project is widespread and associated with fractured and hydrothermally altered rocks. It occurs in quartz veins, stockwork and breccia zones, pyrite veinlets and disseminations and is hosted in both granite and metasedimentary rocks.

Drills began turning in April this year at the north-trending Supremo zone, where Kaminak drilled 550 metres of the T3 trend's 1.7-km strike length last year. Supremo is actually made up of five parallel mineralized structures over an 800 by 800-metre area. Aside from the discovery intercept, drilling last year at the steeply east-dipping T3 trend returned 14 metres of 12.4 grams gold per tonne (from 53 metres) and 51 metres of 1.2 grams gold (from 83 metres).

Latte, 1 km south of Supremo, is an east-west trending, steeply south-dipping structure, coincident with a 1 km long by 100-metre-wide gold-in-soil anomaly. Regional geophysical surveys show the Latte structural zone is about 10 km long. Highlights from Latte last year included 70 metres of 1.9 grams gold (from 19 metres depth) and 16 metres of 3.7 grams gold (from 119 metres). A stepout hole drilled 900 metres west of Latte hit 6 metres of 3 grams gold per tonne, and is believed to be an extension of Latte (Latte West).

The Connector zone, meanwhile, is the presumed intersection of the Supremo and Latte zones and has returned up 5.5 grams gold over 11 metres.

East of Connector, the east-northeast trending Double Double zone, returned 35 metres of 6.3 grams gold. Double Double consists of two parallel zones, and is coincident with a 300 by 100-metre gold-in-soil anomaly.

Kona, 5 km west of Supremo, is a northeast-trending soil anomaly 1,500 metres long and up to 500 metres wide. It returned up to 57 metres of 2.2 grams gold.

The 700 metre-plus Americano trend consists of two parallel gold-in soil anomalies more than 4 km long, linked by a 700 metre-long mineralized structure. It has returned 18 metres of 2.4 grams gold and 36 metres of 0.9 gram gold.

And 1 km south of the Americano link structure, the northeast-trending Espresso zone is a 1,200 by 750-metre wide soil anomaly where drilling has cut 8 metres of 1.4 grams gold.

While there are many new entrants into the White Gold district, familiar faces are sticking around, too.

After a reverse takeover of Shawn Ryan's company Ryan Gold by Valdez Gold late last year, the prospector has agreed to join the resulting company as its president for a five-year stint. The new Ryan Gold (RYG-V) has acquired all of the prospector's gold properties in the Yukon, comprising about 10% of all claims in the territory or 2,454 sq. km. It also boasts access to the extensive database of geophysical and geochemical anomalies Ryan has built up over 15 years.

The company has projects in all prospective areas of the Yukon, including the White Gold district, the Selwyn basin, and in southeast Yukon, near Northern Tiger's 3Ace project. Ryan Gold plans extensive soil sampling and airborne geophysical surveys in 2011, plus 12,000 metres of drilling.

Its flagship propery, Ida Oro, is 25 east of Golden Predator's past-producing Brewery Creek project. Soil samples at the property have turned up gold anomalies over a 4 by 1-km area that corresponds with a magnetic low.

The company announced a $40-million private placement in April, but the final tally when the financing closed in May, came to $52.3 million.

Ryan has some high-profile believers: the company is backed by Ned Goodman, who serves a director, and Osisko Mining (OSK-T) bought a 10% stake in Ryan Gold last year.

Led by Underworld founders Adrian Fleming and Darryl Cardey, Smash Minerals (SSH-V) holds 4,177 claims just east of the White Gold property. The company completed an IPO in April and has a $4.3-million exploration program planned for this year consisting of magnetics surveying, soil and ridge sampling, mapping and prospecting and drilling.

Silver Quest Resources (SQI-V) has a large land package in the White Gold district, including its high-grade Boulevard discovery, which adjoins Kaminak's Coffee project to the southwest. Soil sampling last year identified the 20-km-long Boulevard trend at the property, the western part of which is along strike of a projected extension of Coffee mineralization. A 20-hole, 3,000-metre program drill program last year that followed up on previous trench results (6 metres of 7 grams per tonne gold) at three anomalies yielded 2.6 metres of 1.02 grams gold (from 72.6 metres) and 6.3 metres grading 2.11 grams gold (from 62 metres depth).

Arcus Development Group (ADG-V) is earning 50% of the Dawson gold project, 100 km south of Dawson City, from its sister company Atac Resources (both belong to Strategic Exploration Group). Its $2.4-million budget for the year will cover airborne geophysical surveying over each section of the more than 70-sq.-km project, as well as soil sampling and drilling later in the season.

Yukon newcomer Ethos Capital (ECC-V) holds several properties in the White Gold district totalling 500 sq. km, and is planning to spend $6 million on them this year. The company will be following up on soil anomalies with trenching and conducting geophysical surveying and geological mapping to identify drill targets. About 2,000 metres of drilling is planned at the Wolf project, 35 km west of Coffee, to test soil anomalies that extend over 2.8 km.

Taku Gold (TAK-V) has nine properties totalling 626 sq. km in the area, many of which have seen placer gold mining in the past. The company is planning to carry out 7,500 metres of drilling on multiple properties this year, as well as soil sampling and trenching. The company has identified three linear gold trends in a 550-hectare, northwestern part of its Rosebute property, just west of Kinross's JP Ross project. Trenching at the Portland property along a sulphide-bearing quartz vein returned a weighted average cut gold grade of 27.26 grams per tonne over 7 metres. Five drill holes at the Bishop property returned low gold grades.

Expedition Mining (EXU-V) is earning 50% of the Brew project from Aldrin Resource, and plans to conduct soil sampling, trenching and drilling later this year. The property features two parallel 3-km-long anomalies, 1 km apart.

Pacific Ridge Exploration (PEX-V) has budgeted $3 million for its flagship 190-sq.-km Mariposa project for 4,000 metres of diamond drilling, geophysical surveying, soil sampling, trenching and mapping. Soil sampling last year identified multiple anomalies, including the 3.5 km by 650-metre Skookum Jim, which has returned grab samples of up to 8.1 grams gold per tonne and trench samples of up to 30 metres grading 1.25 grams gold. The company also holds other projects in the district, and in southeastern Yukon.

Selwyn basin gold district

Around the same time that Underworld made its White Gold discovery, Atac Resources (ATC-V) struck gold in the Selwyn basin, about 55 km northeast of Keno city and on the northern edge of the Tintina gold belt.

Since then, the company, which had its origins in geological consultancy Archer Cathro, has had phenomenal success at its Rackla project. Not only is it planning to release a resource estimate for its Tiger zone in the third quarter, it's also moving ahead with a $25-million exploration program at the 1,660-sq.-km project - doubling last year's budget.

At least eight drills will be deployed to conduct 40,000 metres of drilling at the 185-km-long by 15-metre-wide Rackla project. The bulk of the drilling (30,000 metres) will be conducted at Osiris and other Carlin-type deposits discovered last year along the Nadaleen trend, on the eastern end of the project. Tiger and five oxide gold targets within 5 km of the deposit will see 10,000 metres of drilling.

Atac staked the grassroots Rackla project based on regional prospecting. It discovered the Tiger zone, located in the Rau trend (just west of the centre of the property) in 2008, pulling intervals such as 78.54 metres of 1.71 grams gold (from 71.5 metres) and spent much of 2009 delineating the sulphide, then oxide zones of the deposit. High-grade results from the oxide zone, such as 19.4 metres of 5.29 grams gold (from 84 metres) and 38.8 metres of 17.11 grams gold sent its shares to a then new high above $2.10 last August.

Mineralization at Tiger is hosted in interbedded (dolomitized) limestones and basalt flows. The near-surface, carbonate replacement deposit has an oxide zone about 600 metres long, 200 metres wide and 40 metres thick, and a 350-metre-long, 120-metre-wide, 50-metre-thick sulphide zone.

At the beginning of September, the company followed up its Tiger zone results with the discovery of the Osiris zone, 100 km east of Tiger. With the first hole into Osiris cutting 65.2 metres grading 4.6 grams gold (from 56 metres depth), the possibility of a district-scale discovery sent its shares to more than $7 from $3 in one week.

It wasn't just the potential scale of its project that had investors so pumped up. It was also the type of mineralization at Osiris, which Atac described as "Carlin-type."

The Selwyn basin was formed at the same time and has the same regional-scale thrust faults as those in the Carlin trend as Nevada's Great basin, one of the world's most prolific gold producing areas.

"You show (rocks from Osiris) to any Nevada geologist and their jaw drops because of the similarities," says Mike Burke, a geologist and 20-year veteran of the Yukon Geological Survey. (Burke left earlier this year to join the team at Golden Predator.)

Like Nevada's Carlin deposits, the gold at Osiris is sediment-hosted (in Paleozoic carbonate rocks) finely disseminated, and originated from hydrothermal processes.

Osiris consists of stacked, gold-bearing intervals within favourable limestone debris units that are linked by feeder structures. The limestone debris-flow horizon is 150 to 200 metres thick and has been traced on surface for 2.5 km.

Osiris mineralization is distinct from Tiger in that, true to the Carlin analogue, low-temperature arsenic minerals realgar and orpiment are the main minerals associated with gold, rather than pyrite and arsenopyrite.

The 5-km-long Nadaleen fault also hosts three other Carlin-type discoveries within 8 sq. km: Isis, Conrad, and Eaton.

Just 100 metres west of Osiris is an identical horizon, called Isis - a 150-200 metre thick limestone debris-flow unit. Drilling there returned 17 metres of 0.92 gram gold from 32 metres depth.

End of season drilling at Conrad, 2 km east of Isis, returned 21.1 metres of 8.03 grams gold (from 41 metres depth), while Eaton, which is 400 metres southeast of Conrad, returned 39.8 metres of 1.61 grams gold, 9.64 metres of 3.36 grams gold (both from just over 100 metres depth).

Atac ended 2010 with nearly $27 million in the bank and raised another $25 million in a private placement in February.

The other players who have come into this relatively remote camp have early stage properties, including Atac's sister company, prospect generator Strategic Metals (SMD-V). Strategic is planning an initial $3-million exploration program at its 600-sq.-km Midas Touch property, which borders Rackla to the south. The company, which reported $27 million in its treasury (and another $80 million in marketable securities) in February, will announce additional work according to the results. Realgar and orpiment have been reported in historical drilling at the Crag target at Midas Touch, 40 km west of Osiris.

Expedition Mining (EXU-V) began an airborne EM survey over its Joy and Mt. Mervyn projects in the Selwyn basin in May, which will be followed by mapping and sampling this summer. Constantine Metal Resources (CEM-T) and Carlin Gold (CGD-V), meanwhile, have staked a total of 700 sq. km in the district, targeting Carlin-type mineralization. And other companies with claims in the Rackla area include Golden Predator (GPD-T), Silver Quest Resources (SQI-V), Cantex Mine Development (CD-V), AccelRate Powersystems (AXP-V), which will soon become Goldstrike Resources, Radius Gold (RDU-V) Solomon Resources (SRB-V) and Ansell Capital.

3Ace, southeast Yukon

In only seven weeks of exploration late last year, Northern Tiger Resources (NTR-V) discovered a widespread, high-grade gold vein system over a 4-sq.-km area at its 3Ace project in southeastern Yukon.

The company acquired the project, 40 km south of the Cantung mine, in April, and got out on the ground in July. The initial results were so promising, Northern Tiger decided to do a late season, nine-hole 1,240-metre drill program in September. By November, it had announced a new gold discovery in an area better known for copper.

The first hole in the Main zone, which was drilled to intercept the Discovery Vein, returned 30.3 metres of 4.3 grams gold from 49 metres depth. Sixty metres to the south and along strike from that hole, the second hole cut 10.9 metres of 14.8 grams gold from 24.6 metres depth.

The company will spend $7.2 million on exploration this year, including 12,500 metres of diamond drilling. About $6 million of that (10,000 metres starting in late May) will be focused on the 202-sq.-km 3Ace project and the 56.3-sq.-km Sprogge property, which Northern Tiger has optioned from Alexco Resource (AXR-T) and Newmont Mining (NMC-T, NEM-N). Sprogge is on trend with 3Ace and adjoins it to the east and has returned very strong gold-in-soil anomalies and high-grade surface samples.

In its limited program last year, Northern Tiger identified four zones at 3Ace: Main, Sleeping Giant, Green zone West and North. But this year's program will focus on the Main zone, which is at least 100 metres long and open in all directions, and Green zone West. Six new targets will also be tested.

Mineralization is hosted in quartz veins and intensely fractured quartz pebble conglomerate with abundant quartz flooding and additional quartz veining. The highest grade gold intercepts were closely associated with clay-altered sheared phyllite.

The shear-hosted Sleeping Giant zone is a parallel structure to the Main zone, about 1.2 km to the east, and was likely formed by the same fluids. The gently east-dipping zone is about 6 metres wide, and has been traced on surface for 300 metres by 25 metres. Of six holes drilled along 180 metres of its strike length, five struck significant mineralized structures. However, the intercepts (such as 6.5 metres of 1.35 grams gold starting at 15.7 metres depth) were not as impressive as the Main zone intervals.

A 1.5-metre chip sample from the North zone, 500 metres east-northeast of the Main zone, assayed 90.8 grams gold and 5 grams silver. And the east-west trending Green zone, located 2 km north of the Main zone, is a 1,000 by 500 metre target defined by soil sampling.

Northern Tiger has $9 million to fund its 2011 exploration program, after raising $3.6 million in a private placement in December and another $4.7 million in March.

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