North of 60 Mining News - The mining newspaper for Alaska and Canada's North

After decades of doggedly chasing the legendary allure of the gold-rich Chandalar District northern Alaska, Little Squaw Gold Mining Co. is showing signs of closing in on its recent goals. The Spokane, Wash.-based junior changed its name in May to Goldrich Mining Co. It also released findings April 30 from an independent, conceptual economic scoping study of its alluvial gold deposit discovery in the Little Squaw Creek drainage on the property.

Goldrich controls key acreage in the Chandalar district, which is about 190 air miles north of Fairbanks, with 14, 993 acres in state and federal claims. Historic production at Chandalar totals about 84,000 ounces of gold, 88 percent from placer deposits.

The company said resource calculations based on results from 100 holes drilled indicate that the Little Squaw Creek placer deposit contains 8.8 million cubic yards of gravel, containing 216,602 ounces of gold with an overburden-to-pay strip ratio of 1.14 and an additional inferred resource of 1.2 million cubic yards of gravel containing 27,019 ounces of gold.

An open-pit mine plan was prepared based on the measured and indicated portion of the estimated resources using a conventional drill, blast and haul mining method. The discounted cash flow, based on the conceptualized mine plan, generates a positive internal rate of return at the current price of gold. The mine would produce an average of about 20,000 ounces of gold annually for at least 10 years.

Costs comparable to Rock Creek, Pogo

The project operating cost for recovering the resource is an estimated $503 per ounce, but the projection is sensitive to rising energy prices, the junior said. This production cost compares favorably to those at other Alaska gold mines: NovaGold's Rock Creek mine projected to be $467 per ounce (12/31/07), and Teck Cominco and Sumitomo Metal Mining's Pogo mine operating at $515 per ounce (12/31/07).

"It is my opinion that this deposit will prove to be an economic discovery," said Goldrich's longtime President Richard "Dick" Walters. "We are effectively talking about recovering gold from a large gravel pit that could be streamlined into production under Alaska's favorable placer mining permitting system."

Goldrich believes that additional drilling will advance all of the inferred and indicated resources into measured resources at grades ranging from a fifth to a quarter of an ounce of gold per bank cubic yard, and also will substantially increase the size of the deposit.

The deposit is open to expansion by drilling in three directions; drilling also revealed a separate, higher-level gold-bearing stream channel overlying the east side of the known deposit. The possibility exists to double the sizes of the current resources, Walters said.

This order-of-magnitude scoping analysis was prepared to determine the economic viability of a remote, bulk, open-pit placer mining operation at Chandalar. The study suggests that the deposit may offer a return on investment at today's gold price, he said.

Historic name became distraction

Goldrich said the resource estimate does not meet requirements for a U.S. Securities and Exchange Commission Industry Guide 7 compliant mineral resource. However, the company does believe that the quantity of mineralized material defined at the deposit qualifies as a Canadian National Instrument 43-101 compliant resource.

On a recommendation from directors, Goldrich's shareholders approved the name change because "the use of the word 'squaw' in the company's name is considered by many to be condescending to certain cultures," Walters said

The company was incorporated in Alaska in 1959, but since has expanded its mineral interests to other states and countries.

Walters said the directors believed it was no longer appropriate for the company's name to be limited by its historic beginnings.

"Also, because of negative connotations associated with that word, we have found it to be a distractive obstacle when discussing financing arrangements with investment banks and financial institutions" he added.

The name change will take effect after Amended Articles of Incorporation with the new name are filed with the office of the Secretary of State of Alaska. The Company also will receive a new trading symbol.