Tectonic leases Doyon's Flat gold project
Builds upon strong partnership with Alaska's largest landowner North of 60 Mining News – October 1, 2021
Last updated 10/7/2021 at 2:44pm
Building upon a strong relationship it has made with Doyon Ltd., Tectonic Metals Inc. has entered into an agreement to lease the Flat gold project owned by the Alaska Native Claims Settlement Act regional corporation.
Located about 25 miles north of the Donlin Gold project being advanced under a joint venture between Barrick Gold Corp. and Novagold Resources Inc., the 92,160-acre Flat property hosts intrusive-hosted, sheeted quartz vein gold mineralization similar to that found at Kinross Gold Corp.'s Fort Knox Mine in Alaska and Victoria Gold Corp.'s Eagle Mine in the Yukon.
Located in the Kuskokwim Mineral Belt, Flat covers the likely lode source of two creeks – Flat and Otter – that are estimated to have produced more than 830,000 oz of placer gold since 1908. When you add in other creeks streams draining Chicken Mountain on the property, this total is more than 1.3 million oz of alluvial gold.
Historical exploration carried out from the 1960s until 2003, including roughly 11,000 meters of drilling, has outlined a nearly 4,000-meter-long gold-in-soil anomaly formed by intrusion-hosted mineralization that begins at surface and remains open along strike and at depth.
"The acquisition of Flat provides Tectonic with access to one of the most exciting gold exploration opportunities in Alaska," said Tectonic Metals President and CEO Tony Reda. "The property's location, just 40 kilometers north of Donlin, is enhanced by gold mineralization consistent with that found at the Kinross Gold's Fort Knox mine and Victoria Gold's Eagle mine."
The flat property covers two main target areas – Chicken Mountain and Black Creek-Golden Horn.
Gold at Chicken Mountain occurs as disseminated and fracture-controlled mineralization within a late-stage quartz monzonite intrusion, which appears to have been the major source of placer gold in the Flat district.
A 3,800- by 600-meter soil anomaly with greater than 100 parts per billion gold covers the core of the exposed intrusion.
Historical drilling at Chicken Mountain cut bulk-tonnage gold mineralization with narrower, high-grade sections. Highlights include:
• 26.6 meters averaging 1.36 grams per metric ton gold from a depth of 57.9 meters in hole F88-02, including 4.5 meters averaging 6.47 g/t gold.
• 7.6 meters averaging 5.62 g/t gold from a depth of 33.5 meters in hole F88-14, including 1.5 meters averaging 24.51 g/t gold.
• 24.7 meters averaging 12.56 g/t gold from a depth of 27.1 meters in hole DDH97-16CM, including 1.4 meters averaging 211.27 g/t gold.
• 1.6 meters averaging 27.2 g/t gold from a depth of 193.2 meters in hole CM03-25.
Tectonic says the gold at Chicken Mountain is hosted within quartz veins which contain free gold, arsenopyrite, pyrite, stibnite, cinnabar, and rare chalcopyrite.
Mineralization at the Black Creek-Golden Horn complex is contained within northeast-striking, steeply dipping, intrusion-hosted sheeted sub-parallel veins.
Narrow veins contain quartz and limonite, while wider veins up to 18 inches thick contain open space fills of massive stibnite with pyrite, arsenopyrite, cinnabar, scheelite, and native gold.
Contact-related vein and disseminated bulk tonnage mineralization is hosted within sedimentary and volcanic rocks. Most notable is the Golden Hornfels, or Golden Horn, zone which occurs along the eastern contact of the Black Creek stock.
One hole drilled at Golden Horn in 1997, DDH97-10GH, cut three gold mineralized zones: seven meters averaging 1.49 g/t gold from a depth of 84.4 meters; 21.4 meters averaging 0.49 g/t gold from a depth of 123.4 meters; and six meters averaging 4.15 g/t gold from a depth of 149.4 meters.
"Flat also has the potential for free-milling gold, implying a simpler, less energy-intensive extraction process upon mining. This, in combination with historically mined placer gold deposits in creeks draining the property, points to an opportunity with a low-cost path forward," said Reda.
Tectonic plans to conduct data compilation prior to a preliminary metallurgical test work program utilizing existing drill core.
Since its formation in 2018, Tectonic has built a strong working relationship with Doyon, the ANCSA regional corporation for Interior Alaska.
Much of the 12.5 million acres of land owned by Doyon was selected for its mineral potential, including two district-scale mineral exploration properties a few miles west of the Yukon border – Seventymile and Northway – that Tectonic leased from Doyon in 2018.
Tectonic recently opted to terminate its lease on the Northway property but continues to explore the massive gold potential identified across a wide swath of the district-scale Seventymile property.
In 2020, Tectonic leased an additional 65,600 acres of Doyon lands adjacent to or near its Tibbs gold project in the Goodpaster Mining District, a gold-rich region of eastern Alaska that hosts Northern Star Resources Ltd.'s Pogo gold mine.
These Goodpaster District properties leased from Doyon include Carrie Creek, 15,800 acres of lands divided into two blocks now referred to as Tibbs North and Tibbs South, and Mount Harper, a 49,800-acre polymetallic exploration property about 10 miles southeast of Tibbs.
Flat now represents the fourth property Tectonic has leased from Doyon over the past three years.
"Tectonic is proud to once again be partnering with our largest shareholder, Doyon, to unlock the exploration potential at Flat," said Reda.
Much like the agreements on the previous three properties leased from Doyon, the agreement for Flat covers all aspects of exploration, development, production, reclamation, and royalties.
Under the terms of the lease, Tectonic paid Doyon US$30,000 upon signing the agreement and is required to make US$40,000 payments to the ANCSA corporation in years two through five; US$50,000 annual payments in years six through nine; and US$100,000 annually for the balance of the initial 15-year lease.
If Tectonic decides to extend the lease beyond the first term, annual payments to Doyon will increase to US$200,000.
If Tectonic completes a feasibility study for developing a mine on any portion of the Flat property, the company is required to pay a one-time fee of US$150,000 to Doyon.
Doyon also retains a 2% net smelter royalty for precious minerals and a 1% NSR for base minerals until the fifth anniversary of commencement of commercial production. After that, Doyon's royalty increases to 3% NSR for precious minerals and a 2% NSR for base minerals up to the tenth anniversary of commercial production. Following the tenth anniversary of commercial production, the production royalty for precious minerals is the greater of a 4% NSR or 15% of net proceeds, and the production royalty for base minerals is the greater of a 3% NSR or 15% of net proceeds.
An important aspect of all Tectonic's lease agreements with Doyon is contributions toward educational programs for the Alaska Native corporation's shareholders. As such, Tectonic has committed to contributing an annual US$10,000 scholarship payment to the Doyon Foundation or another accredited institution as directed by Doyon for the term of the lease. This scholarship amount increases to US$50,000 each year following the commencement of commercial production at Flat.
To keep the lease at Flat in good standing, Tectonic must complete $1 million of exploration by the end of 2023, including $500,000 next year; another $2 million over a three-year span beginning in 2024; and $2.5 million for every three-year period from 2027 to the end of the lease.
"We look forward to focusing our methodical, innovative and targeted approach to gold exploration on the over 90,000-acre district-scale opportunity at Flat for the benefit of all Tectonic's shareholders and stakeholders," said Reda.