Kaminak outlines fully funded 2013 program at Coffee

VANCOUVER — It is full steam ahead for Vancouver-based explorer Kaminak Gold (KAM-V) at its wholly owned Coffee gold project in the Yukon’s White Gold district. Fresh off its maiden resource, which cemented Coffee’s multi-million ounce gold potential, Kaminak is back at work with an $11-million exploration program that should see drilling underway this month.

In December Kaminak calculated an inferred resource at Coffee of 64 million tonnes grading 1.56 grams gold per tonne for 3.23 million contained oz. at a 0.5 gram gold cut-off. Perhaps more impressively, 28 million tonnes at an average grade of 1.64 grams gold consist of near-surface oxide material.

On Feb. 26, Kaminak stated its objectives for 2013 and bumped its cash position to $16 million by completing a private placement worth $1 million, which involves issuing 746,250 shares at $1.34 each.

Kaminak will focus on its shallow and high-grade oxide resources during 2013, which are hosted mostly within the Supremo and Double Double deposits. The Supremo trend consists of seven north-trending, gold-bearing structural zones — labelled T1 to T7 — that coincide with a well-defined 2 by 2 km gold-in-soil anomaly.

Double Double is associated with a regional east- to northeast-trending and steeply north-dipping structure that coincides with a 600-by-100-metre gold-in-soil anomaly. The structure is comprised of shear zone and breccia fabrics overprinting variably textured schist, giving the overall appearance of a high-strain fault zone.

In 2012 Kaminak punched 348 holes at Coffee over 69,000 metres and made discoveries at the Supremo T4, T5, T7 and Sugar zones, as well as establishing over 8.5 km of mineralized strike within the 2 by 2 km Supremo, Double Double and Latte areas. Exploration drilling completed through the third quarter of 2013 will be incorporated into an updated resource estimate that could pave the way for Kaminak’s inaugural economic study.

The company will also be following up on initial metallurgical testing that involved heap-leach column tests on oxide materials from Supremo, Latte and Double Double that returned 90% recoveries over 80 days, including 83% recoveries over a 15-day period. Kaminak will ramp-up its metallurgy this year, focusing on expanding work to a broader range of samples that include transitional and sulphide material from depth.

The company will also be chasing plenty of blue sky on its 600 sq. km land package. Current resources cover less than 15% of the overall property, and with Kaminak’s established success with its geochemical program, it isn’t a stretch to see the project yielding further discoveries. The company plans to collect 10,000 soil samples this year to improve its regional coverage.

In early February Kaminak shuffled its management team to strengthen its developmental experience going forward. Eira Thomas replaced Rob Carpenter as president and CEO. Thomas sits on the board of a number of notable Canadian resource companies, including Suncor Energy (SU-T, SU-N) and Dundee Precious Metals (DPM-T). Richard Hall will also be joining Kaminak’s board. Hall helmed Northgate Minerals when AuRico Gold (AUQ-T, AUQ-N) paid $1.5 million in 2011 to get its hands on the Young-Davidson gold mine in Ontario.

“Our work program is designed to expand upon and define preliminary economic parameters for core resource areas at Supremo, Latte and Double Double, while at the same time continuing with an aggressive drilling campaign to identify additional resources over the broader [Coffee district],” Thomas says. “In addition to the ambitious drilling and resource campaigns that are planned for 2013, Kaminak intends to initiate early stage engineering studies in support of a preliminary economic assessment.”

Kaminak received a market boost following news of its 2013 program, jumping to a high of $1.25 per share during midday trading on Feb. 26. The company lost its momentum in subsequent trade sessions, however, closing at $1.09 per share on March 1.

Kaminak has had a rough ride on the market to start 2013, dropping 32%, or 51¢ since early January. The company had 83 million shares outstanding at press time for an $89.5-million market capitalization.