With gold prices near historic highs, Little Squaw Mining Co. is busy laying the groundwork for exploring its vast mining property for gold in the highly prospective Chandalar district about 200 miles north of Fairbanks.

The Spokane-based junior mining company launched a $1.7 million exploration program this spring that includes more than 10,000 feet of drilling in 30 or more holes on at least 10 gold prospects where Little Squaw said it previously established the presence of rich gold values. The program also calls for various wide-ranging technical surveys in addition to the drilling.

"We are not only excited about launching a full-fledged exploration program in an area where we have already seen a lot of gold, but this summer at Chandalar is also going to be the sort of true frontier adventure like the gold rush that established Alaska," said Little Squaw President Dick Walters.

The Chandalar gold mining district has never before been subjected to a holistic exploration approach using modern techniques, according to Little Squaw officials. Until now, less than a score of drill holes have been made, all done more than 25 years ago, leaving the large property, which covers most of the district, essentially untested, the company said.

An independent technical analysis found several placer deposits in the Chandalar district compare favorably with other glacier-redistributed deposits in Alaska and in the Russian Far East. Three out of four of these examples have cumulative reserves and past production totals exceeding 500,000 ounces of gold. Only 84,000 ounces have been mined, so far, at Chandalar.

However, it is gold lodes, or veins, in the Chandalar district that could host millions of ounces of gold over large widths, and strike lengths, offering potential for a world-class mine, the report said.

Little Squaw has identified six new gold-bearing veins, bringing to 30 the total number of known veins and vein swarms on its property. Only four of the veins, so far, have seen a modest amount of past development.

Gold prices have retreated in recent weeks from 25-year highs to hover near $630 an ounce.

Logistical feat

In April, Little Squaw "cat trained" 67 tons of machinery, construction materials and supplies valued at nearly $500,000 from the Dalton Highway near Coldfoot over a 70-mile winter route to the drill site. The State of Alaska is trying to clear the access right of way to this trail for possible future road development.

Jim Barker, manager of the Chandalar Project for Little Squaw, described the operation as "a major logistical accomplishment, moving so much gear and equipment overland (using bulldozers, snow cats and sleds) in arctic winter conditions."

"But we managed it virtually without incident," he added.

With the machinery and supplies in place to support the upcoming summer exploration program, Little Squaw scheduled work to begin at the site after "spring break-up" in late May. Those efforts included upgrading existing field infrastructure, particularly roads and airfields, "which will enable us to move forward aggressively with our gold prospecting and drilling programs," said Bob Pate, vice president of Little Squaw.

Prep work to get the camp ready for 20 people was under way June 7, and the company has entered into a contract with Tester Drilling Services of Anchorage to provide 10,000 feet of reverse circulation drilling on the Chandalar property this summer, according to Little Squaw spokeswoman Susan Schenk.

"The drilling will start in mid-July," Schenk added.

The company is also busy setting up the rest of the project's support structure, including obtaining all necessary state permits, and various contracts for sampling, assaying, geologic mapping, camp catering, and aerial services.