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

WHITEHORSE, Yukon Territory - Quieter streets, emptier skies, shorter business hours and closed shops here are sure signs of tough times in the mining industry. Hours away by helicopter, one can find bare-bones exploration camps and skeleton staffs sprinkled like the occasional grain of visible gold across remote mountain vistas, which also reflect the return to the frugal times of the past.

In the wake of more than two years of scarce capital, mineral exploration activity is a shadow of the booming times the territory enjoyed earlier in the decade. Still, the Yukon Geological Survey estimates that mineral exploration activity across the territory will climb nearly 45 percent this year to roughly C$65 million, reflecting dozens of small programs and only nine projects where expenditures will exceed C$1 million.

For most of the explorers who mounted mineral exploration programs in Yukon this season, 2014 is shaping up to be an interlude of waiting, whether for better markets, better fund-raising opportunities or better data. Individual projects offer sharp contrasts, ranging from modest one- and two-day field programs, with budgets of less than C$100,000, to a year-long venture with C$65 million earmarked for exploration and development.

Many of the projects received assistance from the Government of Yukon's highly successful mining exploration programs, which encourages prospecting, grassroots and early-stage exploration with cash grants totaling C$1.4 million awarded to 42 recipients in 2014.

Junior advances Coffee project

But for an intrepid few juniors and the occasional major, 2014 has brought a turning point that could advance their respective projects to the next level of exploration or development and position them for larger, more meaningful programs in 2015.

"The biggest development in the Yukon this year is that Lucas Lundin and Ross Beaty, two of the smartest investors in the junior mining space, each bought 10 percent interest in Kaminak (Gold Corp.)," Victoria Gold Corp. President and CEO John McConnell told Mining News. "That level of interest shows the project is for real and so is the Yukon."

Lundin, head of Zebra Holdings and Investments S.à.r.l., Luxembourg (a company owned by a trust whose settlor was the late Adolf H. Lundin) and Beaty each agreed to invest C$6.76 million, collectively C$13.52 million, in Kaminak by way of a non-brokered private placement in July.

The move boosted the junior's cash position to C$26.5 million.

Kaminak's board of directors two weeks later approved a C$12 million exploration program for 2014, and initiated a feasibility study for its Coffee Gold Project, located 130 kilometers (81 miles) south of Dawson City, Yukon.

The decision to proceed directly to a feasibility study followed a positive preliminary economic assessment of the project announced in June, which indicates that Coffee represents a robust, high-margin, rapid pay-back, 11-year open pit mining project at a US$1,250 gold price.

Feasibility activities will be initiated in the third quarter, and will include infill drilling, additional metallurgical test-work, continued environmental baseline activities and a condemnation program.

Rory Kutkuoglu, Kaminak Gold's exploration manager, told Mining News the junior is expected to spend an estimated C$18.5 million in 2014 and bring five drills online to drill 70,000 meters this year, with a goal of upgrading Coffee's 3.43-million-ounce (79 million metric tons grading 1.36 g/t gold) inferred resource to the indicated category. The project's current NI 43-101-compliant indicated resource is 719,000 oz gold, using base case cut-off of 0.5 g/t gold for oxide and transitional material and a 1 g/t gold cut-off for sulphide material.

Kaminak anticipates completing the feasibility study by early 2016.

Olive offers high-grade results

Ironically, Victoria Gold's flagship property, Dublin Gulch located about 80 kilometers (50 miles) north of Mayo in central Yukon is grabbing its own headlines this summer. The property hosts the five million-ounce-plus Eagle Gold deposit, which many believe will become Yukon's next gold mine.

Following receipt of high-grade gold intercepts from exploration earlier this year, Victoria launched a 5,000-meter phase 2 of 2014 exploration at the Olive Zone, which is adjacent to the Eagle deposit.

"We finished the first phase, drilling 3,000 meters and we did metallurgical tests," said Helena Guikka, project geologists for Victoria. "The results were encouraging so we decided to keep drilling. We're hoping to put out a resource estimate this year after the drilling is completed."

In early August, Victoria had 20 workers in camp and two drill rigs running.

Results from the phase 1 program included 20 diamond drill holes, three of which were used solely for metallurgical testing. The first 14 diamond drill holes from phase 1 yielded results that included 69.7 meters of 2.29 grams-per-metric-ton gold, 96.1 meters of 1.22 g/t gold and 99 meters of 1.02 g/t gold.

The final six holes from phase 1 program included 42.5 meters of 2.36 g/t gold and 22.7 meters of 1.43 g/t gold within an 89.6-meter interval of 1.18 g/t gold.

In initial metallurgical testing on Olive samples, gold recovery exceeded management expectations and averaged 61 percent on the oxide samples at a P80 6.3-millimeter crush size, or 93 percent at a grind size of 75 microns. While the average oxide recovery is less than Eagle, the higher grade mineralization targeted at Olive is anticipated to result in materially higher recovered gold grade.

McConnell said the phase 1 results underscore the success of a near-surface Olive zone mineralization model that the company had developed and tested. "Moreover, the final exploration holes were designed as large step-outs along the projected strike of the Olive shear zone and lead us to believe the Olive target may be larger than we originally anticipated. We look forward to the results from the Phase 2 program which is progressing well," he said in mid-August.

He also said Victoria has growing confidence that the Olive zone will have a meaningful economic impact on the proposed Eagle Gold Mine. "We intend to demonstrate this through a maiden Olive resource estimate followed by an update to the Eagle feasibility study and economic model with the incorporation of Olive," he added.

At Eagle, meanwhile, Victoria is still arranging financing and awaiting a water license in order to begin construction of the proposed heap leach mine.

Other companies that have reported plans for sizable exploration programs in Yukon this season include Wellgreen Platinum (up to C$6.9 million for metallurgical and engineering studies of the Wellgreen Project), ATAC Resources Ltd.'s Rau gold project (at least C$6 million on exploration of a half-dozen deposits related to the Tiger Deposit), Alexco Resource Corp. (C$5 million for surface exploration at Keno Hill), and Centerra (C$1 million for exploration of the Betty and Hayes properties).

Cantex also reported efforts to raise about C$1.75 million earlier this year, and recently launched an exploration program on its North Rackla gold project in east-central Yukon.

Through extensive sampling in previous field seasons, Cantex has identified potential Carlin-style gold mineralization with its 13.5-kilometer by 14.5-kilometer claim block at North Rackla.

The junior conducted an induced polarization and resistivity geophysical survey over the property's highest priority area in July and a follow-up drill program with a small rotary air blast drill in August to obtain bedrock drill cuttings for analysis.

Yukon tour reveals rich prospects

A tour by air of selected remote properties, aided by Alkan Air and Trans North Helicopters, in early August revealed additional contrasts in Yukon's 2014 mining activity, from the bustling atmosphere at Selwyn Chihong Mining Ltd.'s Selwyn zinc-lead project in a rambling valley of Howard's Pass in eastern Yukon to Strategic Metals Ltd.'s grassroots Hopper Project, where small core tent housing a few grab samples perches on a lonely hillside blanketed with spongy overburden near Aishihik Lake in central Yukon.

Stops in between included Rockhaven Resources Ltd.'s 90-square-kilometer Klaza gold-silver-copper project where three drill rigs dotted an area of stunted alder- and muskeg-strewn hills overlooking placer-mining creeks in the Dawson Range of central Yukon; Banyan Gold Corp.'s quiescent Carlin-style Hyland gold project on 19,000 hectares (47,000 acres) nestled in an alpine forested mountainside in Southeast Yukon; Goldstrike Resources Ltd.'s Plateau South project where lichen-covered rocks laden with gold, some of it visible to the naked eye, litters a mountaintop above the tree line in east-central Yukon.

The tour also included a visit to Manson Creek Resources and Guatavita Gold Corp.'s Guaman Project, which may host a rich volcanogenic massive sulphide base metal deposit embedded in a high forested slope about 25 kilometers south of Atac's Rau project in east-central Yukon.

Though at various stages of exploration or development, each of these projects are being advanced by hopeful owners using plausible geological models and encouraging clues from earlier work. The companies and/or their predecessors have uncovered significant mineralization on the properties and are eager to take the next step in establishing the ventures as lucrative mining projects or mines.

Hopper hosts Casino-like mineralization

The road-accessible Hopper Property is one of about 160 properties owned by Strategic Metals in Yukon. It encompasses 365 mineral claims, covering 74 square kilometers (28.6 square miles) and lies 22 kilometers (14 miles) north of the Otter Falls hydroelectric generator.

The property, which is situated two kilometers from Aishihik Lake Road, lies within the Yukon-Tanana Terrane. Intrusive rocks on the claims may be the same age as the metallogenic episode that mineralized Western Copper and Gold Corp.'s Casino porphyry copper-gold-silver-molybdenum deposit located 190 kilometers to the north-northwest. In November, Strategic Metals reported outlining a nine-square-kilometer copper-gold skarn-porphyry target on the Hopper property.

However, Strategic's geological mapping of the property early this year revealed four phases of plutons present at Hopper, which calls into question past efforts to determine the age of the rocks on the property.

"In order to make smart geological decisions here, we need age dating," said Heather Burrell, P. Geo., a senior geologist and partner at Archer, Cathro & Associates (1981) Ltd. "Strategic is advancing about 15 projects this summer.

Multiple stacked, copper-rich skarn horizons have produced promising drill results including 1.94 percent copper and 0.87 percent g/t gold over 18.59 meters.

Hopper hosts a large, very strong soil geochemical anomaly that defines skarn and porphyry targets that are ready for advanced exploration. The porphyry prospect is a 2,000-meter by 3,000-meter area situated in the western part of the Hopper Pluton. Much of this prospective area is heavily vegetated and blanketed by various depths of overburden.

The core of this anomaly, which measures 600 by 1,000 meters, was outlined in 2013 and has not been drilled. Recent chip samples across skarns exposed in hand trenches returned 1.57 g/t gold, 3.35 g/t silver and 0.56 percent copper over 19 meters and 0.77 g/t gold, 2.18 g/t silver and 0.35 percent copper over 37 meters.

A recently completed IP survey has identified targets with high chargeability and low resistivity that underlie geochemically anomalous areas.

In 2013, gold-rich skarn - 6.83 g/t gold and 0.18 percent copper over 3.0 meters - was identified in a chip sample taken from an outcrop discovered downhill and down section of the known copper-rich skarn horizons.

As part of a C$250,000 program for 2014, Strategic completed an induced polarization survey over the northern part of the soil geochemical anomaly at Hopper and the adjacent overburden-covered plateau, near the known porphyry showings. The survey identified broad zones of greater than 25 millisecond chargeability response that encompassed and extends well beyond the known mineralization and areas of strongly anomalous copper-in-soil values. The chargeability highs lie within an even larger resistivity low.

With six to nine workers, the explorer's 2014 exploration program at Hopper also includes more geological mapping, hand trenching, chip sampling, IP surveys and road construction. Results of the work are intended to guide future drill programs, which are already permitted.

Goldstrike turns up visible gold at Plateau South

The Plateau North and Plateau South properties are located the Hess River about 130 kilometers (81 miles) east of Mayo in east-central Yukon and 120 kilometers north of the North Canol Road.

Goldstrike is credited with an original high-grade gold discovery on the properties, which consist of 1,597 claims covering about 352.5 square kilometers (136 square miles).

The results, achieved to date in only 10 weeks of field exploration since 2010, include numerous high-grade surface grab samples up to 15.45 ounces per ton (529.86 grams per metric ton) gold from multiple zones along a gold-mineralized trend 25 kilometers long and 5 kilometers wide. Nine grab samples to date have returned over 100 grab samples to date have returned over 100 g/t gold, 48 samples returned more than 10 g/t gold and 196 samples returned over 1 g/t gold.

Drilling in July 2013 intersected visible gold in four of 17 initial BQ drill holes (1,495.6 meters). The best hole intersected 2.28 g/t gold over 53.0 meters, including 10.91 g/t gold over 10 meters.

The gold occurs in multiple deformed metasedimentary and metavolcanic rocks of the Lower Hyland Group (Proterozoic), including an extensive and previously unmapped rhyolite volcanic complex and subvolcanic porphyry equivalents.

The Plateau South is believed to be the source of the anomalous Russell Creek placers, 12 kilometers to the south, which occupy the floor of a heavily glaciated valley and were drilled by Noranda in 1981-82, with an average grade of 0.51 grams per metric ton gold over 6.5 feet.

During a brief tour of Plateau South Aug. 5, Trevor J. Bremner, chief consulting geologist and director at Goldstrike, said the property is most likely the source of the placer deposits in Russell Creek.

Bremner said the short, but intensive exploration programs undertaken during the past three years have enabled the company to identify gold mineralization at surface and at 4.5 meters depth at Plateau South.

"We think it's a bigger monster up here, and it's got a lot more appeal," Bremner said. "Geologists we brought in yesterday found eight to nine sample of visible gold in 20 minutes."

In addition, the results of silt sampling, astrodata, satellite imagery and IP survey has provided additional evidence that mineralization at Plateau South may be related to Goldstrike's Goldbank and Goldstack prospects across the river.

"We think they represent different depths of the same system," Bremner said.

Tell Property hosts

intriguing "kill" zone

Manson Resources, operator of a C$1 million exploration program this year at the Guaman project, is following up recent exploration aimed at assessing the mineralization believed to lie beneath a compelling kill zone on what is known as the Tell Property.

"We were able to finance over the last three years enough to test the target, and we still feel great about the potential for volcanogenic massive sulphide mineralization here," Manson President Jean-Pierre Jutras, P. Geol., told Mining News during the first week of August. "We've been drilling for three weeks this summer, and we've found bedded barite in the drill holes, which typically caps VMS mineralization."

A dozen or more gossans, including Tell, have been identified in a trend that extends for 650 meters on the property and a ground-based induced polarization survey in 2012 detected and defined a large area of sub-surface coincident apparent conductivity and chargeability at the head of the gossan formation and kill-zone area. Conductivity values for the target are consistent with similar geophysical signatures for large massive sulphide bodies.

Jutras said the property host and intriguing band of rocks from which mineralization appears to have killed or stunted vegetation downslope in a wide area.

"This huge vegetation kill zone is underlain by soils that run anywhere from 0.3 percent to 24 percent zinc, and zinc kills plants … What we do know is that everything above the gossans where the zinc is coming from, the trees are fairly healthy."

Jutras said soil samples of the area contain zinc, nickel, arsenic, mercury, cobalt, selenium and occasionally uranium.

"Given the VMS potential, we might be looking at massive sulphide mineralization. The geochemistry was encouraging and the water coming out of the ground here analyzes higher than the water coming out of the Wolverine Mine and the Faro Mine in the same suite of elements," said Jutras, who also is president of Guatavita Gold. That junior has an option to earn a 50 percent interest in the project by contributing C$650,000 to the 2014 exploration program.

Though zinc can be easily transported in ground water, the geologist believes the relatively neutral Ph of the water coming from the area and its cool temperature suggests that its ability to transport metals significant distances is limited.

"So we started with the gossans, then we get into the soil samples, and then we get into the kill zone. And we look at the waters. Something is happening here. Are we chasing a ghost that could be hiding who knows where?" he asked.

Banyan Gold plans drilling at Hyland in 2015

Banyan Gold is eager to advance the Hyland Gold project, which hosts a large, underexplored regional-scale mineralized system located near the southeastern corner of Yukon and the British Columbia border.

But the ongoing capital drought has hindered the junior's ability to raise the funds needed to move forward with its exploration plans for the 627-claim property that stretches for four kilometers across several forested ridges.

A fairly new company, Banyan closed on the acquisition of Hyland from Argus Metals Corp. in February 2013.

Hyland, where the gold mineralization has been compared to that of the Marigold Mine in Nevada, has a 2012 NI 43-101 mineral resource estimate of 400,000 oz gold-equivalent at 0.99 g/t, using 0.6 g/t cut-off grade.

Banyan intends to mobilize heavy equipment to the site this winter after hopefully raising capital this fall. Its goal is to launch a drill program next spring aimed at increasing the Hyland resource to 1 million oz gold.