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By Shane Lasley
Mining News 

Shotgun owner targets gold resource

Securing a C$3.5M private loan, TNR aims to confirm and expand 1 million-ounce gold deposit at Shotgun Ridge in Southwest Alaska

 

Last updated 6/24/2012 at Noon



Following a five-year hiatus, TNR Gold Corp. has returned to confirm a 1 million-ounce gold resource at its Shotgun project in the Kuskokwim Gold Belt of Southwest Alaska. Located about 110 miles (175 kilometers) south of Donlin Gold and about the same distance northeast of Pebble, the property lies at the intersection of two trends known to host big deposits.

"So, it's in a very, very prolific gold area. We think it has a potential not just for 1 or 2 million ounces … we hope it's going to host in the tens of millions of ounces," TNR Gold President Gary Schellenberg said in an April interview with Midas Gold Money.

TNR Gold originally optioned Shotgun from Novagold Resources Inc. in 2002. By the end of 2006, TNR had spent C$4.5 million on exploration, more than enough to earn a 50 percent interest in the project. The Vancouver, B.C.-based explorer gained full ownership of Shotgun in 2010 by issuing 6 million TNR Gold shares and 3 million warrants to NovaGold - setting the stage for a return the Southwest Alaska gold project.

Like most junior exploration companies, TNR Gold's share price has suffered from the current global financial unrest. This undervaluation has not prevented the company from securing funds to explore Shotgun.

At the end of May TNR announced that a private backer is willing to loan the junior C$3.5 million to fund drilling and other exploration at Shotgun and provide the company with additional working capital. The loan - to be repaid by May 31, 2015 - is secured by a promissory note and general security agreement. The loan will bear interest at the rate of 20 percent per annum.

"Given the current financial climate and TNR's undervalued market capitalization we are very pleased to have secured long-term, non-dilutive funding that will enable the company to advance the Shotgun gold project and return to the project generation business plan. Our present strategy is to develop TNR's existing assets to a stage that fosters strategic joint venture partnerships," said Schellenberg.

Shotgun approach

Shotgun was known as Mose - a reference to the anastomosing quartz veins at the discovery outcrop -- when the intrusion-related gold prospect was discovered by Cominco Alaska and Enstar Resources Corp. in the 1980s. The partners completed early prospecting and six shallow diamond drill holes (226 meters) before the phased transfer of ownership to NovaGold. Based on an additional 3,100 meters of drilling in 19 holes, the latter company outlined a pre-NI 43-101 resource of 980,000 ounces grading 0.93 gram per metric ton at a cut-off of 0.5 g/t at a zone known as Shotgun Ridge.

When TNR Gold entered the picture it did not focus on the 1 million-ounce gold resource area but took more of a Shotgun approach. The company drilled several other underexplored prospects - with a particular focus on Winchester, a promising intrusion-related zone about 10 miles (16 kilometers) south of Shotgun Ridge.

"It's one of these intrusive related gold systems that has a big look very similar to the Donlin Creek," according to Schellenberg.

The best intercept of some 1,653 meters of drilling completed by TNR Gold at Winchester came in hole 06-45. This hole, drilled in 2006, cut 23.6 meters averaging 1.9 grams per metric ton gold. Other significant intercepts at this intrusion-related target include 1.6 g/t gold over 14.3 meters in hole 05-32, 1.4 g/t gold over 12.2 meters in hole 06-50 and 1.22 g/t gold over 13.4 meters in hole 06-53.

TNR Gold's exploration at Winchester has focused on a 1,400-meter zone of gold geochemical anomalies that spans some 7,000 meters.

Shot and King are two other prospects the junior has investigated.

Targeting the resource

Though TNR Gold set out to make new discoveries across the 16,200-meter land package at Shotgun, a small drill program targeting the historical resource area returned what could be the most significant hole of the junior's exploration.

Hole 06-43, drilled at Shotgun Ridge in 2006, cut 210.5 meters averaging 1.29 g/t gold and includes a 27.4-meter section grading 2.3 g/t gold.

While this long section of more than 1 g/t gold was encouraging, the geological insights gleaned from this hole is what captured the attention of TNR Gold geologists. This hole transformed the understanding of structures controlling mineralization at Shotgun Ridge and revealed feeder zones, opening the 1 million-ounce gold resource to depth.

A geophysical orientation survey conducted across the historical resource area in 2011 revealed previously unknown structures within the Shotgun Ridge that appear to correlate well with geology and mineralization identified in drilling.

Armed with the information provided by these 3-D resistivity and chargeability results, TNR Gold's 1,500-meter drill program slated for this year is targeting mineralization to depth along the southwest dipping feeder zones identified in hole 06-43.

With the results of the 2012 program, TNR Gold aims to expand the 980,000-ounce gold resource at Shotgun Ridge and bring it up to modern NI 43-101 standards.

"Drill hole 06-43 has clearly been the most encouraging hole at Shotgun Ridge," said TNR Vice President of Exploration John Harrop. "We are optimistic that the current drilling program will continue to increase this mineralized zone at depth which will be reflected in the subsequent resource estimate."

 

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