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By Rose Ragsdale
For Mining News 

Miners rush to gold claims near Stewart

Junior's discovery ignites flurry of staking in prolific gold-producing region of Canadian province near Southeast Alaska border


Last updated 10/25/2009 at Noon

Thanks to one junior's report of encountering substantial gold mineralization this season near the old Red Cliff Mine in Northwest British Columbia's Stewart Mining District, a gaggle of excited juniors are grabbing up mineral claims and leases in the area.

The small but growing stampede to Stewart surfaced in September after Decade Resources Inc. released assay results from the first few holes drilled in its 2009 exploration program.

Vancouver, B.C.-based Decade reported intersecting 28.4 meters grading 7.3 grams per metric ton gold, including 3.66 meters of 24.05 g/t gold, in one of nine diamond drill holes testing the Montrose zone on the Red Cliff Project.

The Red Cliff property consists of eight mineral claims situated in the Skeena Mining division a few kilometers north of Stewart, B.C. In November 2008, Decade optioned a 60 percent interest in the property, plus a 20 percent interest dependent on shareholder approval from Mountain Boy Minerals Ltd.

Other juniors soon began focusing their attention on the area.

Mining companies that recently acquired gold tenures or assets in the area include BonTerra Resources Inc., Brookemont Capital Inc., Nanika Resources Inc., Orestone Mining Corp. and Sidon International Resources Corp.

Two other explorers, Canasia Industries Corp. and Ascot Resources Ltd., stoked industry excitement about the region by reporting positive drill results from their 2009 exploration programs at the Clone gold property located 18 kilometers, or 11 miles, southeast of Stewart and the Premier Project, located about 22 kilometers, or 13 miles, north of Stewart, respectively.

Prolific region, controversial geology

On its surface, Decade's report is not uncommon for the area.

Though relatively quiet in recent years, the Stewart Mining Region boasts a venerable history of prolific gold and copper mining activity dating from the discovery of placer gold at the turn of the century.

In the early 1900s, postmaster Robert M. Stewart named the mining-dominated community after himself and his brothers. Nearby Hyder, Alaska also boomed with the discovery of rich silver veins in the upper Salmon River basin in 1917 and 1918.

With big gold and silver producers, the area saw significant mining activity throughout the 20th Century. Significant precious and base metal deposits in the Stewart Gold Camp include the Big Missouri, Silver Coin, Sulphurets, Red Mountain and Eskay Creek deposits. The Stewart Mining Region's last big gold producer, the Silbak-Premier Mine, was shut down in 1996 by operator Westmin Resources due to low metal prices after producing 2 million ounces of gold and 42.8 million ounces of silver, along with a minor amount of lead, zinc and cadmium.

The area around Stewart, home to a significant deepwater port on the northwestern coast of Canada, has the typical gold-quartz veins seen in Jurassic-Hazelton Group volcanic and sedimentary rocks, said Stephen Rowins, acting chief geologist of the British Columbia Geological Survey.

"This type of geology hosts all the good gold mineralization, but there is still debate about the Stewart region's geology," Rowins told Mining News Oct. 16.

"It has complicated grades that can be very high, but the continuity is not there. You can find two nice veins intersecting, but try to trace it and it pinches out," he explained. "The structural models that people come up with have been challenging and not economic."

The Stewart region also boasts significant volcanic massive sulphide deposits. A good example of this mineralization is the Granduc Mine located 40 kilometers, or about 25 miles, northwest of Stewart, B.C.

Rowins said the recent spurt in mining activity in the area appears to spring from Decade's "Montrose discovery play."

"In September drilling, they found 28.4 meters of 7.3 g/t gold, which is a nice intersection," he said.

But the junior's Red Cliff Project is in an area where lots of mining activity has occurred in the past. "It's not grassroots," Rowins said.

Strong drill results from Clone

Canasia, for example, reported intersecting very encouraging drill results during its 2009 drill program on the Clone gold property in early October.

The Vancouver, B.C.-based junior said most of holes #15 to 21 in the Trench 4 and 14 areas cut high-grade intersections. Holes #16, #20 and #21 were particularly impressive. Hole #16 intersected 7.92 meters grading 20.22 g/t. Hole #20 cut two zones, the first with 20.12 meters grading 7.11 g/t and the second with 12.5 meters grading 7.39 g/t. Hole #21, the first hole of the second phase, returned bonanza values in 7.93 meters averaging 30.37 g/t.

"The initial results attained here are very exciting for management. Not only did we achieve the highest grades drilled by Canasia on the Clone Prospect to date, but it also appears that we may have encountered a new zone as witnessed by the significant gold values intercepted in holes 18 and 20 at deeper depths to the rest of the drilling," said Canasia Director Graeme Sewell. "We look forward to the next set of results as some of those holes appear to contain even more visible gold than the holes reported today."

"The major lithology is observed to be light grey to green andesitic pyroclastics intercalated with fine grained to aphanitic andesite. Clasts are subangular to angular, matrix supported, and range in size from 1-3cm. Quartz-calcite stockwork pervades the unit in moderate abundance. The mineralization is localized within highly silicified semi-massive to massive hematite-specularite and gold occurs as fine disseminations and is associated with the oxide mineralization. A diabase dyke has been observed in many of the holes, acting to minimize and in some cases deplete the mineralized zone," Canasia said.

Holes #6 to #12 were drilled in the vicinity of Trench 81, about 160 meters to the southeast of Holes #15-21. Canasia said these holes were successful in intersecting sheared mineralized sections displaying local auto-brecciation, intense hematite alteration, chlorite stringers, and the cobalt-containing mineral, erythrite.

Holes #6-11 returned lesser gold values, ranging from 2 g/t to 8.07 g/t gold over widths varying from 4.27 meters to 9.75 meters.

New interest in old ground

In June, Ascot, another B.C. junior, optioned 100 percent of all of the assets of the historical Silbak-Premier Gold Mine held by Boliden Ltd. in the Premier Gold Camp and by September, had reported encouraging drill results from the first 29 drill holes of a 2009 exploration program.

Ascot said it confined initial drilling to the Premier pit, while waiting for drill permits. The first 11 holes confirmed previous work by Westmin and demonstrated additional potential in the pit area. Several holes also targeted the Power and Hope zones for additional extensions to these high-grade zones near the Premier portal. The S1 pit area exposed mineralization in the pit wall in a new orientation than was previously recognized. The drilling opened up potential to the north and east of the existing pit.

Ascot said the Northstar area of the property has seen little drill testing and a series of 100-meter step-out holes tested this target for depth potential. A hole drilled in the Province area (the only one with results as of Sept. 22) was designed to test the potential of mineralized structures between the surface Province zone and the underlying Big Missouri zone. In hole P09-029, Ascot reported intersecting 11 meters averaging 50.51 g/t gold as well as significant gold mineralization in core from 19 other drill holes across the property.

Previous work by Westmin had developed a shallow, flat-lying syngenetic "cherty tuff" model for Big Missouri area mineralization. Ascot said its 2009 work is applying an epithermal model, based on knowledge gained over a long period in the Premier mine area, to test many of the targets on the balance of the large property. This work is opening up significant depth potential and allows new targeting of many of the historical occurrences, the junior said. Additional target areas drill-tested (assays pending) included Martha Ellen, Montana, Silver Tip and Rambler with drilling continuing as weather permits.

Miners converge on district

The mining industry seems to believe Decade and others may be onto something worthwhile in the Stewart Mining Region.

In the past 60 days, 49 (mineral) tenures have been taken out in the Montrose Play, and in the past 30 days, 13 tenures have been taken, according to the B.C. Geological Survey.

"In the past 60 days, the region also has seen 87 mineral tenures taken within a 20-kilometer radius of the Montrose gold discovery with 16,341 hectares, or 39,382 acres, staked, and a "good half-dozen mining companies entering the area," Rowins said.

BonTerra Resources Inc. Sept. 17 reported acquisition of the Long Lake claims 3 kilometers, or about 2 miles, from Decade's Red Cliff.

The property contains six known BC Geological Survey Minfile occurrences.

The Spider 3 showing was explored with underground workings dating back to the 1920s.

The remaining occurrences were discovered in the 1950s and have been explored intermittently since that time, including mapping and sampling, trenching, geophysical surveys and local drilling.

The occurrences include mainly veins and replacement style mineralization with silver-gold-zinc-lead values along a northwesterly trend.

The road-accessible property covers about 433 hectares, or 1,044 acres, and is adjacent to Long Lake, 22 kilometers north of Stewart. BonTerra said the acquisition cost C$32,000 and 2 million shares payable on regulatory approval.

The property also is subject to a 2 percent net smelter return royalty, of which one-half (1 per cent) may be purchased back for C$1 million.

Brookemont Capital Inc. reported optioning 100 percent interest in six contiguous claim blocks consisting of 2,706 hectares, or 6,687 acres, from an arm's-length vendor in the region. This property directly borders Canasia's Clone gold prospect and is the closest property to Canasia's current drill program location, according to Brookemont.

The junior's president, Conrad Clemiss, cited Decade's Montrose discovery and the visible gold Canasia reported at the Clone property in explaining his company's strategy.

Red Cliff East

In September, Nanika Resources reported acquiring a total of 21 mineral claims near its Indi property within 1 kilometer to the northwest of the Red Cliff Project, and immediately launching an exploration program. Nanika noted that "the recent work by Decade, north of Lydden Creek, previously undrilled, indicates the structure is striking further northwest than first thought."

The junior said its recently acquired Red Cliff East property covers 1,530 acres, or about 635 hectares, of which 222 acres, or 92 hectares, are in close proximity to the Red Cliff Project, about 8 kilometers, or 5 miles, to the east of Nanika's existing Indi property. The junior also said it began the late-season drill program in early October to investigate two targets on the northeast portion of Indi property about 24 kilometers, or 15 miles, north of Stewart, B.C. with a minimum drilling budget to provide for 1,000 meters of drilling.

Nanika said it planned to begin exploration with a crew working on all areas of the property that have not been previously worked and conducting stream and soil sampling, and prospecting. Further work on the property will be considered for later this year based on the results of the current work program, and may include drilling, the junior added.

Newcomers join the play

Another junior, Orestone Mining, reported entering an arm's-length letter agreement with Intuitive Exploration Inc. in early October to acquire 25.5 percent interest (roughly half of Intuitive's 51 percent interest) in the Todd Creek property and half of Intuitive's 100 percent option in the Funk property located about 35 kilometers, or 22 miles, northeast of Stewart. The properties cover some 19,467 hectares, or 46,915 acres. Todd Creek occurs within the Stewart Gold Camp roughly 9 kilometers, or 5.5 miles, east of Decade's recent discovery. Historical exploration on the property by Noranda Mining identified a non-NI 43-101-compliant resource of about 30,000 ounces of gold.

Newcomer Sidon International Resources Corp., also recently reported entering into an option agreement with an arm's-length vendor to acquire six contiguous claim blocks consisting of 2,668 hectares, or about 6,591 acres near Decade's Red Cliff Project.

"The Stewart Region of British Columbia has recently achieved a substantial amount of attention primarily due to the recent success shown by companies such as Decade and Mountain Boy," said Sidon President Kamal Alawas.

"Management is happy to have the ability to be involved in this historically prolific region that hosts such deposits as the Silbak Premier, Big Missouri, Silver Coin, Sulphurets, Red Mountain and Eskay Creek deposits."

"When you look at the news releases, you can't determine if there's anything to this until companies start publishing maps showing drill locations," the B.C. geologist said. "Whether it develops into an exciting exploration play for two-three years remains to be seen.


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