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By Shane Lasley
Mining News 

2010 Mining Explorers: Junior investments pay big for Kinross

Major's strategy to invest in Tintina Gold Belt explorers turns up White Gold


Last updated 10/31/2010 at Noon

Kinross Gold Corp. is a partner of choice for many junior explorers investigating gold prospects in Alaska and northwest Canada.

The Toronto-based major has formed various alliances with a number of juniors exploring for gold in the Tintina Gold Belt, the prolific 145-million-acre (58.7-million-hectare) mineral region that hosts Kinross' Fort Knox Gold Mine and huge gold deposits including Donlin Creek and Livengood in Alaska as well as significant gold showings in Yukon Territory, including White Gold.

This symbiotic relationship affords the smaller companies the funds and resources for exploration while providing the Toronto-based major an inside track on any discoveries turned up with the grassroots exploration.

If the White Gold project in the Yukon Territory is any indication, this liaison is paying dividends for both Kinross and its junior partners.

When Underworld Resources Inc. raised money in the fall of 2008 to explore the, at the time, little-known White Gold property, Kinross pitched in C$1 million to acquire 9.7 percent ownership of the junior.

"The investment in Underworld is part of Kinross' strategy to maximize exposure to new prospects and experienced explorationists at a relatively small capital investment by partnering with promising junior companies on a select basis," the major explained.

This strategy resulted in Kinross buying out Underworld and gaining ownership of the junior's White Gold and Ross projects in central Yukon Territory.

The friendly takeover bid was embraced by Underworld management and shareholders.

Getting in the Golden Saddle

Since the takeover, Kinross has not spared time or money on this promising gold asset. The Toronto-based gold miner allotted C$15 million to advance the White Gold properties in 2010. The multifaceted exploration program included some 30,000 meters of drilling, geophysics, environmental baseline studies and staking of around 9,900 acres of additional claims in the region.

The company's newly acquired Yukon asset is divided into two land packages; White Gold and Ross. About two-thirds of the drilling completed in 2010 was on the original land package, with the remaining 10,000 meters drilled at Ross.

The bulk of the 20,000 meters drilled on the White Gold property itself was aimed at expanding the one-million-ounce gold resource outlined by Underworld in the Golden Saddle and Arc zones.

At Golden Saddle, drilling by Underworld outlined an indicated resource of 1 million ounces of gold, at an average grade of 3.2 grams per metric ton, plus 407,000 ounces at an average grade of 2.5 g/t gold in inferred resources.

At the Arc zone, the initial resource estimate includes 170,500 ounces at an average grade of 1.2 g/t gold in the inferred category.

In addition to resource expansion in these two zones, Kinross also had drills turning at McKinnon, Black Fox and Wedge - three other prospects on the White gold land-package.

Ross is a 312-square-kilometer, or 121-square-mile, land-package located some 35 kilometers, or 22 miles, north of the White Gold property.

This 40-kilometer-, or 25-mile-, long trend of gold prospects exhibits similar geologic and geochemical characteristics to the White Gold Trend, it parallels. Within the trend, Underworld said it identified a Golden Saddle-style geochemical signature that is underlain by similar host rocks.

The Ross trend includes the headwaters to multiple active, and past producing placer operations, including: Henderson, Maisy May and Black Hills creeks. Production records from the Yukon Geological Survey (2009) report more than 177,689 ounces of gold mined from these operations.

Due to poor exposure of bedrock in the White Gold District, soil sampling is the primary reconnaissance exploration tool used by Underworld, which collected some 6,200 samples at Ross.

Kinross investigated five prospects turned up by Underworld - Frenzy, Sabotage, Marnie, Vertigo and Stage - along the Ross trend with its 30-hole 2010 drill program.

Frenzy is a gold-in-soil anomaly that measures 2,700 meters by 1,000 meters. The average gold grade of 459 samples collected at this prospect is 18 parts per billion, ranging from trace to 1,142 ppb. The prospect is underlain by similar host rocks to the Golden Saddle, with a similar geochemical signature. As a comparison, the Golden Saddle soil anomaly measures 1,800 meters by 900 meters, and consists of 348 samples, which outlines a u-shaped anomaly with an average grade of 22 ppb gold, ranging from trace to 364 ppb gold.

Sabotage, which is a 1,600-meter-long, single ridge line gold anomaly, was discovered as part of a ridge and spur sampling program completed by Underworld. Soil samples collected at Sabotage ranged from trace to 132 ppb gold, averaging 23 ppb of the yellow metal.

Tintina juniors

Kinross has an equity stake in Full Metal Minerals Ltd., Millrock Resources Inc. and Victoria Gold Corp. - three other juniors exploring the Tintina Gold Belt.

In 2008, the Toronto-based gold producer Kinross formed a strategic partnership with Full Metal Minerals, a junior with management and technical team ties to Underworld, to seek out gold deposits in the Tintina Gold Belt.

Russian and Horn Mountain gold-silver properties - located about 25 miles, or 40 kilometers, southwest of Barrick Gold Corp. and Novagold Resources Inc.'s enormous Donlin Creek gold deposit - was the first prospect turned up by the alliance.

A 13-hole drill program in 2009 encountered gold-silver-copper-arsenic mineralization associated with quartz-tourmaline veining, including one meter grading 8.59 g/t gold, 185.6 g/t silver and 6.03 percent copper in the first hole of the program.

The strategic partners have not revealed any new prospects turned up in 2010.

Kinross also has forged an alliance with Millrock Resources Inc. to explore more than 348 square miles, or 900 square kilometers, of gold properties in the Council Mining District about 60 miles, or 100 kilometers, east of Nome, Alaska.

The area of interest covered under the partnership includes Millrock's Council property and the adjacent Albion property, plus surrounding mining claims staked by the junior. The partners are seeking the source of more than one million ounces of placer gold recovered from the district.

A 2,500-meter reverse circulation drill program completed in 2010 targeted a 900-meter-by-2,000-meter gold-arsenic anomaly surrounds the old placer workings and is centered on a northwest trending structure. Millrock believes the size of the geochemical anomaly and the geological setting indicates potential for a large deposit.

Kinross also owns a 28 percent stake in Victoria Gold, which is exploring the Dublin Gulch Project in central Yukon. The Eagle Gold deposit at Dublin Gulch, which appears to be a geological twin to Kinross' Fort Knox Mine in Alaska, boasts an estimated NI 43-101 probable reserve of 1.75 million ounces of gold in about 66.1 million metric tons grading 0.82 grams per metric ton gold plus an indicated resource of 2.7 million ounces of gold in about 98.6 million metric tons grading 0.85 g/t. A feasibility study for Eagle Gold is scheduled to begin in the fourth quarter of 2010.

Fort Knox neighbor

Kinross has held a longstanding partnership with junior explorer Teryl Resources Corp. at the Gil gold property next door to its Fort Knox Mine north of Fairbanks.

In November, 2009, the major made a bid to buy Teryl's 20 percent stake in the Gil claims, an offer the junior later rejected. Though the joint venture partners could not come to terms on the buyout, they forged ahead with a US$1.5 million exploration program at Gil.

Targeting mineralized zones defined with the geophysics conducted at the beginning of the season, Kinross completed 1,628 meters of core drilling and 2,882 meters of reverse circulation drilling at the prospect.

Preliminary assay results in August from drilling at North Gil reveal that hole GVR-10-568 cut 10.7 meters with an average grade of 2.7g/t gold and GVR-09-569 intersected 15.2 meters grading 1.2 g/t gold. Hole GVR 10-563 intersected 7.6 meters grading 1.03 g/t gold at Sourdough Ridge, which is about eight miles, or 13 kilometers, northeast of the Fort Knox Mine. At the time of this report, assay results were pending from an additional 18 holes drilled at Gil in 2010.

Kinross and Teryl have spent more than US$10.5 million outlining some 10.1 million tons of ore at Gil with an average grade of 1.25 grams of gold per ton, or 404,000 ounces of gold, at the property about five miles, or eight kilometers, east of Fort Knox.


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