Adamera eyes golden upside in historic Washington

VANCOUVER — Vancouver-based Adamera Minerals (TSXV: ADZ) has cut ties with its uranium assets in Nunavut, and picked up gold projects in a less logistically challenging locale: Washington state.

According to president and CEO Mark Kolebaba, Kinross Gold (TSX: K; NYSE: KGC) drew Adamera to northeastern Washington, where the Canadian gold producer has operated its Kettle River–Buckhorn mine since late 2003. Buckhorn was conceived as an open-pit operation, but Kinross redesigned and developed the project as an underground mine due to permitting concerns, while the Kettle River mill was refurbished to process ore.

“It’s quite a historic district . . .  there have been around 10 million oz. gold mined in the region,” Kolebaba comments during an interview, noting that Buckhorn is Kinross’ lowest-cost gold mine. “They have the mill, and every day they’re shipping that ore, but the mill is operating at half capacity. The real opportunity for us is that the orebody Kinross is mining only has around two years of mine life left.”

Adamera came into Washington in February 2012, when the company picked up a 100% interest in the historic Poland–China gold mine, which lies about 80 km by road from Kinross’ Kettle River mill.

Poland–China was founded during the late 1800s in Okanogan, and operated through 1940. The reported historic mining grade was between 8 grams gold per tonne and 12 grams gold per tonne, over an average 2-metre width.

Adamera company conducted its initial mapping and sampling campaign during 2012, culminating in a trenching program that identified a 12-metre-wide quartz-stockwork zone, with gold values up to 19.95 grams gold per tonne over 1.5 metres.

“I call it brownfield due to the fact there has been so much historic work, but a lot of the stuff we’re doing is quite greenfield, though we are looking at some more advanced-stage things as well,” Kolebaba says. “Poland–China actually hasn’t seen a modern exploration project since production was closed down. It is past producing, however, and there are two levels of workings down there, as well as a sort of higher-grade glory pit. It’s also on private land, which carries some really nice benefits for us.”

The next step for Adamera was developing a geological model for the project.

The company mobilized a Winkie Drill — a lightweight, gas-powered alternative to larger rigs — and kick-started a 12-hole structural program. Several reconnaissance holes, adjacent to the historic workings, were drilled south to obtain geological information on the local strata and structures in areas lacking outcrop.

“We were drilling thinking we had a fold hinge, but that doesn’t look to be the case. What we think we’ve got is a highly graphitic shear zone. It’s all mineralized to a certain extent, but it looks like we have high-grade shoots that carry the really interesting gold mineralization,” Kolebaba continues. “When you look at Poland–China you have the volcanics and sediments, and then you have the old mine right on the contact zone. You have a lot of high-grade values up around that area, as well as in the volcanics.”

Adamera conducted a chip-sampling program in Poland-China’s old adit systems midway through the year. The company discovered gold values within a graphitic zone that ranged from 4 grams gold to 16 grams gold, and determined that mineralization remains open at depth. Samples taken at the lowest level of the mine workings — located 33 metres below the adit level — suggest multiple mineralized horizons, or a potential depth extension of a mineralized structure.

Based on its new model, Adamera figures that the high-grade gold ore shoots and downdip extensions of the shear zone will be its focus during the next drilling phase.

The company also completed a gradient-array survey over part of the property, which suggests that targeting resistive, highly silicified zones could lead to more gold mineralization.

During its mid-year exploration campaign Adamera identified another promising target that lies 1.5 km north of the historic mine, and hosts extensive placer-mine workings that extend for 500 metres.

The company suspects that gold found in soils at the target may not be part of a placer deposit, but could be residual gold derived from shallow, underlying weathered bedrock.

Adamera personnel recovered coarse gold grains during hand panning, which exhibit textures indicative of a nearby source.

“Almost every significant gold deposit in the Cordilleran has an associated nearby placer component,” Kolebaba notes. “The placer gold occurrence at the property has been previously overlooked in regards to originating from a nearby bedrock source, and now we recognize it as being far more important than initially thought. It’s unusual to find this high concentration of coarse, local gold in unsorted soils.”

And Poland–China is just one of seven projects that Adamera has staked or acquired in northeastern Washington.

The company is conducting mapping and geochemical work at its Empire Creek gold-silver and Golden Reward gold properties, and has two drill targets outlined at its Flag Hill epithermal project 1 km east of the Eureka gold trend.

“With our cash position, we’re just about to look at fundraising again,” Kolebaba says, adding that the company’s treasury stood at just under US$400,000.

He also says that Adamera is in talks to sell its Nunavut-based uranium projects for cash and a small royalty.

“We’ll continue to raise money on a per-program basis, so we can keep an eye on our dilution. We’d like to continue to drill at Poland–China to test predictability, and see if we can identify the high-grade zone and where it’s going. We can actually do that under our current budget,” Kolebaba says.

Adamera shares have traded within a 52-week window of 4¢ to 19¢, and closed at 5¢ at press time.

The company has 33.5 million shares outstanding for a $1.7-million market capitalization.