Further evidence of Zackly open-pit resource

PolarX Ltd. Nov. 12 reported strong copper-gold results from another hole drilled in an area about 850 meters east of the Zackly skarn deposit that is emerging as a potential open pit mine on the Australian company's Alaska Range project.

This hole, ZX‐18021, cut 20.2 meters averaging 0.3 percent copper, 1.1 grams per metric ton gold and 5.3 g/t silver. While not the highest grade or thickest intercept encountered this year, its proximity to holes that meet that criteria add to a potential place to begin mining from the surface as Zackly.

Before this year's drill program, the Zackly skarn deposit already hosted 3.4 million metric tons of inferred resource grading 1.2 percent (90.4 million pounds) copper, 2 grams per metric ton (213,000 oz) gold and 14 g/t (1.5 million oz) silver, that meets Australian Joint Ore Reserves Committee (JORC) mineral reporting standards.

The portion of Zackly that encompasses the resource is a nearly vertical skarn body that averages around five meters thick and extends for roughly 1,000 meters along strike, making it a likely underground mining target.

This year's drilling, including ZX‐18021, tapped thick zones of more flat lying, near-surface skarn mineralization about 850 meters east of the resource that has the potential to be mined from the surface. If large enough, this would be a great place to start mining at Zackly.

ZX‐18020, the first hole to tap the skarn mineralization in this area, cut 54.6 meters averaging 2.8 g/t gold, 9.4 g/t silver and 0.6 percent copper, including a 0.3-meter (one foot) section from 56.7 meters averaging 27.3 percent copper, 2.5 g/t gold and 82.5 g/t silver.

ZX‐18024, drilled about 40 meters north of hole 20, cut 46.7 meters of 3.1 g/t gold, 0.6 percent copper and 3.3 g/t silver from a depth of 37 meters. This thick intercept included a 21.7-meter higher grade zone that averaged 5.2 g/t gold, 0.8 percent copper and 4.1 g/t silver from 59 meters.

PolarX said this gold-copper mineralization that comes right to the surface and dips shallowly to the south could be suitable for low‐cost open‐pit extraction upon an economic resource being established through further drilling and feasibility studies.

Drilled about 50 meters south of hole 20, ZX‐18021 appears to represent a separate band of mineralization running parallel to the thicker skarn drilled in holes 20 and 24. This separate mineralization that also comes to surface could assist in building tons of resource amenable to open-pit mining in this area.

"The real potential here is to develop an open-pit position that might have many hundreds of thousand ounces of gold," PolarX Managing Director Frazer Tabeart said during a Nov. 7 presentation at the Alaska Miners Association annual convention in Anchorage.

The company discovered this zone during this year's drill campaign and did not have the opportunity to fully explore this season but plans to rapidly expand this area both along strike and down‐dip when drilling resumes in 2019.

A high-resolution aeromagnetic survey flown over Zackly and a large area surrounding the deposit will assist in targeting next year's drill campaign.

Throughout the mineralized drill core intercepts, PolarX has consistently observed a close association between copper, gold and magnetite. The recent 50-meter spaced aeromagnetic survey provides excellent mapping of the magnetite, which has greatly improved the company's understanding of the continuity of mineralization.

Coupled with maps generated from the survey demonstrating that skarn mineralization encountered in holes drilled to date coincide with the magnetic trend increases PolarX' confidence that the Zackly resource extends through holes ZX‐18023 and ZX‐18025, which encountered gold-rich skarn about 350 meters east of the deposit, and onward to the potentially open-pittable mineralization encountered a further 500 meters east.

The magnetic data also indicates a potential fold in the mineralization just east of ZX‐18020. PolarX said this feature could explain why the geometry of the skarn changes in this area – from vertical to sub-horizontal – and may allow direct targeting of drilling to expand this thick, high‐grade, near‐surface mineralization.

With the skarn in this area being nearly 10 times as thick as in the main deposit area, drilling in this area has the potential to rapidly grow the resource to the size the company is looking for to begin considering the economics of a mine at Zackly.

The magnetic survey and 2018 drilling also provides evidence of a larger prize, a potential porphyry copper-gold deposit further east.

While always lower grade than the skarns that they are often associated with, porphyry deposits are typically much larger and tend to be the type of deposit that draws the interest of major mining companies.

Geologists for PolarX and Millrock Resources Inc., the Alaska-based project generator that is managing the exploration at Zackly, have observed porphyry‐style veins and related copper sulfides drilled this year, especially in the holes drilled further east.

This is also true for ZX‐18021, where the gold and copper mineralization is present throughout zones of strong quartz veining and sericite alteration in hole ZX-18021, which is consistent with hydrothermal alteration proximal to a porphyry system.

The new magnetic data has identified several intrusions at Zackly SE that are surrounded by a broad zone of magnetite destruction, a classic signature for large porphyry deposits that is easy to recognize on magnetic geophysical maps.

This produces donut-shaped feature that shows the magnetic high in the center surrounded by magnetic lows.

A cluster of several such features show up on the magnetic maps at Zackly SE, a prospect roughly 2,000 meters east of ZX‐18021.

"The combination of these results, PolarX' drilling to date and the well‐documented association of skarn mineralization such as Zackly with porphyry copper‐gold systems makes Zackly SE a compelling porphyry target," said Tabeart.

The PolarX director said the company plans to complete an induced polarization geophysical survey over Zackly SE early in the 2019 field season followed up by initial drilling of the porphyry target later in the year.

PolarX is awaiting results from soil sampling at Mars, another porphyry copper-gold prospect west of the Zackly skarn; and rock chip sampling from Moonwalk, a Tintina-style gold area in the northern part of the Alaska Range project.

–SHANE LASLEY