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

Great American Minerals Exploration Inc. has closed a landmark option agreement with Sumitomo Metal Mining that consolidates the Monte Cristo and Uncle Sam gold properties into a single 55,465-acre project about 40 miles west of the Pogo Mine in Interior Alaska.

GAME, as the company is commonly known, is no stranger to the Pogo region. In fact, the privately held Nevada corporation staked its first claims there in 1997 and has held onto a position in the area ever since. This property, however, covered only a portion of the district-scale potential of the region.

Over the past several months, Game negotiated deals with three other landholders that reassembled the original Uncle Sam property explored by Kennecott Exploration from 1998 to 2001. Consolidating the northern half of the district cleared the way for the reinvigorated exploration company to negotiate an option agreement with Sumitomo for the southern half, Monte Cristo.

Known now as SAM, this newly assembled land package allows Game to explore the previously fenced in district-scale potential.

“To finally be able to start working the geology and eliminate the property lines seems to be in everybody’s best interest,” said Game Chairman and CEO Dennis McDowell.

The exploration company has also consolidated the geological understanding of this property with the appointment of Patrick Smith as Game president. In addition to nearly four decades of international geological experience, Smith brings to the table more than two decades heading up Kennecott’s Alaska exploration programs and the new Game president was directly involved with the previous exploration of Uncle Sam.

Under Smith’s guidance, Game officials are excited to begin exploring the interesting discoveries made on each side of the Uncle Sam-Monte Cristo border that have long been considered connected but were previously explored separately.

“There is a tremendous amount of data to deal with now, with both packages, and a whole lot of neat geologic thinking and work that needs to be done to pull it all together,” said Smith.

Border deposit

On the Monte Cristo side of the now erased property line, SMM Exploration Corp. – a subsidiary of Sumitomo Metal Mining– has already outlined significant gold mineralization at the Naosi zone.

This deposit piqued interests in June 2011, when SMM Exploration released some tantalizing results from drilling at Naosi.

Highlights included 7.92 meters grading 7.8 grams per metric ton gold and 19.7 g/t silver; 22.83 meters grading 4.2 g/t gold and 48 g/t silver; and 14.69 meters grading 3.6 g/t gold and 84.4 g/t silver.

All told, SMM Exploration drilled 79 holes at Naosi from 2008 through 2012. This work outlined a deposit that dips shallowly from surface and has been traced for roughly 1,500 meters along strike.

This drilling was incorporated into an independent resource calculation prepared for Game by a third party contractor.

At a cut-off grade of 0.51 g/t gold, Naosi hosts an estimated 48.4 million metric tons of inferred resource grading 1.85 g/t (2.88 million ounces) gold and 33 g/t (51.4 million oz.) silver, or 3.42 million gold-equivalent ounces.

While this resource has been calculated to NI 43-101 standards, the technical report needed to lift it to this level of confidence has not been finalized.

Intriguingly, this deposit remains open for expansion and trends towards Lone Wolf, a zone of similar gold mineralization on the north side of the former Monte Cristo-Uncle Sam border.

Past drilling by Kennecott and later exploration companies cut gold grades and widths at Lone Wolf similar to those encountered at Naosi.

The best intercept encountered by Kennecott came in a reverse circulation hole that tapped 21.3 meters averaging 3.2 g/t gold, including 6.1 meters of 10.6 g/t gold.

Drilling under a partnership between Millrock Resources and Crescent Resources in 2011 returned similar results, including 2.74 meters averaging 3.63 g/t gold; 11.46 meters averaging 4.86 g/t gold; 3.05 meters averaging 3.27 g/t gold; and 2.13 meters averaging 1.81 g/t gold.

To date, upwards of US$20 million has been invested in exploring the properties that now make up the roughly 90-square-mile Sam project.

“Right now we are working with On-Line Exploration based in Anchorage, Alaska to pull all of the data for the entire district into one database and doing a full 43-101 – not only for the Naosi deposit but for the whole project,” Smith told Mining News.

As a privately held American company, Game is not required to meet NI 43-101 requirements. However, a report of this caliber allows for apples-to-apples comparisons between Sam and gold properties held by publically listed companies, as well as providing the exploration company independent guidance.

“We want to put our best foot forward and the best targets from the work-to-date have never been drill tested,” said the Game president.

Naosi Game plan

Once the Sam technical report is complete, the exploration company will finalize its plan for exploring the consolidated property in 2017.

One of the pieces to Game’s plan is expected to include the expansion of the oxide zone of the Naosi deposit.

Because of the lack of glaciers stripping away the surface of Interior Alaska during the last ice age, the oxidization typically runs deep in this area. This is the case at Naosi, where oxidized material has been traced to a depth of around 200 meters.

Low cost heap leach recovery of gold from oxidized material has already been proven viable at Kinross Gold Corp.’s Fort Knox Mine about 40 miles to the northwest. This low cost method is also planned for Goldcorp’s Coffee gold project in the Yukon Territory, a project that shares a number of mineralogy and geology traits with Sam.

“We can define an oxide zone within the existing resource, plus expand it,” explained Smith.

This includes expanding the oxide zone north towards Lone Wolf, where deep oxidation was encountered in the holes drilled by Kennecott.

The company would also like to investigate some of the higher grade gold encountered in the deeper sulfide zones within Naosi, such as 30 meters of 14.6 g/t gold.

“This has some good high-grade zones within the sulfide minerology that could be very economic,” Smith explained.

District play

While expanding Naosi is a tantalizing piece of the exploration plan for Sam, it is not the piece that Game leadership is most enthusiastic about.

“The most exciting thing of all is to get back to the district play,” Smith said.

The Game president said that the geochemistry — especially high bismuth values found in the center of the Sam property — suggests that Naosi may be an outlier to the intrusive source of the gold in the district.

Including Naosi and Lone Wolf, the company has identified an initial six priority exploration targets at Sam.

One of these targets, Lone Tree, is a shallow-dipping zone of gold mineralization drilled by Kennecott during its tenure at Uncle Sam. The first such hole, USC-001, cut two zones of gold mineralization: six meters of 0.64 g/t gold from 28 meters; and 3.3 meters of 4.38 g/t gold from 194 meters.

USC-013, another hole Kennecott drilled at Lone Tree, cut six meters of 1.55 g/t gold from 32 meters; and 8.6 meters of 2.8 g/t gold from 79.4 meters.

The three other priority zones are large gold-in-soils anomalies associated with magnetic lows.

“If we are successful and lucky, we have a pipeline of multi-million-ounce deposits that we can bring along in the company,” said McDowell.

Cutting-edge Yukon tech

To increase its odds of making this vision a reality, Game plans to utilize a comprehensive database compiled by On-Line Exploration Services, an Alaska-based geological firm that has been exploring the Sam district for years, as well as the innovative exploration methods and tools developed by Yukon-based GroundTruth Exploration.

The brainchild of famed prospector Shawn Ryan and business savvy wife, Cathy Wood, GroundTruth employs a strategic combination of geochemistry, remote sensing, geophysics and tactical drilling.

Game President Smith got to know Ryan when Kennecott was exploring one the prospector’s Yukon properties in the early 2000s.

Ryan and Cathy went on to apply soil sampling methods refined over the years to discover a number of important gold deposits in the Yukon, including Golden Saddle at Kinross Gold’s White Gold property and Goldcorp’s Coffee deposit.

“The tools that he has and the methodology he uses is top-notch,” Smith said.

Further refinements led to the founding of GroundTruth, an innovative company utilizing a number of unique tools — drones for ultra-high resolution imaging; GTProbe, an efficient and minimally invasive way to sample the soil-bedrock interface; and GTRAB, a rubber track mounted rotary air blast drill to provide early stage tactical drilling that it has developed.

Bringing this cutting-edge exploration that is working so well in the Yukon across the border into Alaska is another piece of Game’s plan to quickly and efficiently realize the potential of the consolidated Sam property in Interior Alaska.

“We are excited,” said McDowell. “After 14 years, we can make a concerted effort to bring the Sam district forward, working the geology with all of the data.”

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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