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

With an earlier than expected feasibility study on its way for Manh Choh, drilling started at Lucky Shot, and the addition of geologist Curt Freeman to its board of directors, Contango ORE Inc. has a lot to look forward to as 2022 progresses.

Freeman's addition to the Contango ORE board coincides with the departure of Joseph Greenberg, an oil and gas executive that has been a director of CORE since it was spun out of Texas-based Contango Oil and into a public company in 2010.

Contango ORE Chairman Brad Juneau says Greenberg, who is CEO of Alta Resources, an independent oil and gas company that he founded in 1999, has provided a great service to CORE and its shareholders over the past 12 years.

"On behalf of the entire board of directors, we want to thank Joe Greenberg for his dedication, many contributions, and wisdom in helping build Contango Ore from a startup in 2010 to our current multi-project gold exploration business," he said. "We wish him the very best on his next chapter. We will miss him."

CORE directors have voted to appoint Freeman to fill the position vacated by Greenberg.

A geologist with more than 40 years of experience, Freeman was the project manager of the Peak Gold project, which was renamed Manh Choh following Kinross Gold Corp.'s 2020 acquisition of 70% joint interest in the project, from discovery in 2008 through 2019. Freeman provided those services through Avalon Development Corp., an Alaska-based mineral exploration consulting firm, and acted as CORE's technical consultant at the time.

"Curt is intimately familiar with the gold and minerals exploration business in Alaska, including the exploration process, resource development and field operations. We believe his expertise will be of significant value to the company as we advance our projects to the next step," said Juneau.

"Like Brad, I welcome Curt to our board. His industry expertise will be of great value as we continue to advance the company," Contango ORE President and CEO Rick Van Nieuwenhuyse added. "I am also happy to announce the achievement of two important milestones for the company regarding the status of the Manh Choh feasibility study and the initiation of our exploration program at our Lucky Shot project."

Manh Choh FS ahead of schedule

At Manh Choh, Kinross announced on June 28 that the feasibility study for developing a mine at this high-grade gold deposit near the Village of Tetlin in eastern Alaska is running ahead of schedule and is expected to be finalized by next month.

This study will detail the economic and engineering parameters of mining the high-grade ore at Manh Choh; trucking that ore to Kinross' Fort Knox Mine north of Fairbanks, Alaska; processing the ore through the Kinross Alaska mill; disposing of the tailings on the Fort Knox property; and a reclamation plan for the Manh Choh mine site.

According to the most recently published calculation, Manh Choh hosts 9.2 million metric tons of measured and indicated resources averaging 4.1 g/t (1.2 million oz) gold and 14.2 g/t (4.2 million oz) silver.

Kinross, however, expects mining at Manh Choh to yield higher grades due to an updated resource model. As a result, the ore from this mine is anticipated to be 10 times higher grade than the current average being fed through the Kinross Alaska mill at Fort Knox.

This addition of high-grade ore is expected to lower all-in sustaining costs and increase cash flow from Fort Knox.

The higher grades should also help offset some of the inflationary pressures being added to developing and operating the Manh Choh Mine.

An updated resource estimate and the first mineral reserves are expected to be included in the feasibility study.

Earlier this year, Kinross signed an extension of the Peak Gold Joint Venture's community support agreement with the Native Village of Tetlin, on whose land Manh Choh is located.

"Since the beginning, we have had constant communication with the Manh Choh Project team. They have been diligent about keeping us informed and at the table every step of the way. We are respected and valued," said Native Village of Tetlin Chief Michael Sam.

Kinross says it is also continuing comprehensive local community programs and prioritizing local economic benefits as it develops the project.

Assuming permits are issued, early construction work at the Manh Choh site could start later this summer.

Lucky Shot drilling begins

As Kinross finalizes the Manh Choh feasibility study, CORE has begun exploration drilling at its Lucky Shot gold project in Southcentral Alaska.

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 250,001 oz of gold from ore averaging around 1.6 oz per metric ton (40 g/t) gold.

This year's drilling at Lucky Shot, which got underway last weekend, is being carried out from the Enserch Tunnel, a historical underground development that has been rehabilitated and extended to allow for detailed infill drilling from underground.

"We are very excited to see the drills turning and to start exploring at Lucky Shot," said Van Nieuwenhuyse.

Five initial "pilot" holes from a drill bay in the Enserch Tunnel have been laid out in a cross pattern intended to intersect the vein down-dip from the historically mined areas.

With this five-hole cross pattern, CORE expects to be able to more accurately determine the strike and dip of the historically mined vein. The company also hopes to obtain five intervals of the shear zone hosting the Lucky Shot vein mineralization, as well as more accurately determine the optimum position of a crosscut drift in the footwall to the historical Lucky Shot vein that will serve as a platform for more than 3,000 meters of underground exploration drilling.

Shane Lasley

An ore cart sits outside a portal at Contango ORE's historic Lucky Shot gold mine project in Southcentral Alaska.

CORE has also contracted Alberta-based Geologic AI to scan the 2022 drill core as well as a significant portion of the core from drill programs conducted by previous operators at Lucky Shot.

This drill core scanning will include high-resolution digital photography, lidar (3D laser profiling to determine rock texture and fracture density), shortwave, visible, and near-infrared hyperspectral imagery, and X-ray fluorescence (XRF) scans.

CORE anticipates using this information to assist with logging mineralization and alteration mineralogy to better understand the geologic and geochemical ore controls.

"It is this type of cutting-edge technology that we plan to bring to exploring the historical Lucky Shot vein and the entire Willow Creek mining district," Van Nieuwenhuyse added.

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
• https://www.linkedin.com/in/shane-lasley-ab073b12/