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

President and CEO Rick Van Nieuwenhuyse has positioned Contango ORE Inc. to be the next gold producing company in Alaska and has added projects that deepen the pipeline for this unique exploration and development company.

CORE's primary asset is Manh Choh, a 675,000-acre land package leased from the Tetlin Alaska Native Tribe that hosts two adjacent, high-grade gold-silver deposits the company advanced from discovery to a project slated to be Alaska's next large gold mine.

Based on 55,321 meters of drilling completed by the company, these Peak and North Peak deposits hosted 9.2 million metric tons of measured and indicated resources averaging 4.08 grams per metric ton (1.21 million ounces) gold and 14.19 g/t (4.2 million oz) silver going into 2021.

With the idea of processing high-grade ore from Manh Choh in the mill at its Fort Knox Mine north of Fairbanks, Kinross paid US$93.7 million to buy a 70% joint venture interest in Manh Choh, with CORE owning the remaining 30% stake in the Peak Gold JV.

Based on the resource outlined by CORE, Kinross expects to produce 1 million oz of gold-equivalent, which includes the value of both the gold and silver recovered, from Peak Gold over a 4.5-year mine life, or roughly 222,000 oz annually, beginning in 2024.

This means that in two years, CORE will be elevated to a mining company producing 65,000 oz/y gold-equivalent.

To advance this project, Peak Gold JV carried out a roughly US$18 million program during 2021 that included in-fill drilling, engineering, and environmental studies needed to complete a feasibility level study for a mine at the Peak Gold deposits; exploration to test other intriguing targets across the expansive Manh Choh property; as well as community relations activities in the Tetlin area.

With Kinross Gold Corp. taking the lead on the feasibility-level studies at Manh Choh, CORE acquired full ownership of Lucky Shot, home to a historic gold mine in the Willow Mining District that may just well follow Manh Choh as Alaska's next gold mine.

"Although it is full steam ahead for the Manh Choh project based on the latest Kinross guidance, the Lucky Shot project represents an exciting opportunity to add significant additional value for Contango shareholders and marks a new focus for the company," said Van Nieuwenhuyse.

A road-accessible project about 75 miles north of Anchorage, the 8,590-acre Lucky Shot property blankets a large portion of the Willow Creek Mining District, including the pre-World War II Lucky Shot and War Baby mines. It is estimated that from 1918 until being shut down by the federal War Production Board in 1942, these two underground operations produced some 252,000 oz of gold from 169,000 tons of ore, indicating an average head grade of around 1.6 oz of gold per metric ton.

All told, the various mines on the Willow Creek property produced roughly 500,000 oz of gold from ore with an average grade north of 1 oz/t prior to World War II.

Based on exploration carried out by Full Metal Minerals, Miranda Gold, and Alaska Gold Torrent Inc., a calculation completed in 2016 outlined 206,500 metric tons of measured and indicated resources averaging 18.3 g/t (121,500 oz) gold; and 59 thousand metric tons of inferred resource averaging 18.5 g/t (35,150 oz) gold.

CORE agreed to pay up to $30 million to acquire the Lucky Shot project, which includes 725 acres of patented mining claims over the historically mined area; 7,825 acres of state claims surrounding the patented land; and a processing site located about 30 road miles to the west.

CORE has also committed to invest $10 million on exploration at Lucky Shot within three years of the closing date of the transaction.

Shane Lasley

An ore car sits outside a portal at the historic Lucky Shot gold mine project in Southcentral Alaska.

By the end of that three-year span, CORE intends to have a mine plan developed based on a 500,000 to 1 million-oz high-grade gold resource at the Lucky Shot, while also exploring the project's wider potential.

"Contango is well positioned, with experienced personnel and capital, to explore and expand the historic high-grade resource at Lucky Shot," said Van Nieuwenhuyse. "We feel the exploration potential of the Willow district is excellent, albeit perhaps under-appreciated."

CORE's Alaska portfolio also includes Hona and Eagle, early-stage exploration gold projects on state mining claims immediately west of Manh Choh; Triple Z, a porphyry copper-gold project just north of Manh Choh; and Shamrock, a gold project the company staked on state claims alongside the Alaska Highway about 70 miles southeast of Fairbanks.

All road accessible projects with the potential to be advanced to Alaska's next gold mine at some point in the future.

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.

• Email: [email protected]
• Phone: (907) 726-1095
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