Emerging gold belts lure juniors to Yukon, Alaska and BC

The discovery of new gold belts and deposit types has led to a modern-day gold rush in parts of the Yukon, Alaska and British Columbia, according to government geologists who track such activity in their jurisdictions.

Mike Burke, (soon-to-be retired) head of the Yukon Geological Survey’s mineral services division, told delegates attending this year’s Mineral Exploration Roundup here that gold fever has reached levels not seen for decades, with 60% of the $150 million spent in the Yukon on exploration being focused on precious metals.

Burke noted that more than 35,000 new hard-rock claims were staked in the first nine months of 2010. “And it’s still physical staking in the Yukon,” he reminded the audience, “with no computers or credit cards harmed during the process.”

Burke attributes much of the increased staking and spending to two emerging gold districts. One is the White Gold district in the northern portion of the Dawson Range, made famous by prospector Shawn Ryan and given the seal of approval by Kinross Gold (K-T, KGC-N) through its $139.2-million acquisition of Underworld Resources in spring 2010.

Another newsmaker in the belt is Kaminak Gold (KAM-V), which recently announced a $15-million, first-phase spring drilling program to test eight gold zones and generate a National Instrument 43-101 resource estimate for its Coffee project.

The other emerging area is the Selwyn basin gold district in east-central Yukon, which is attracting attention for the “Carlin-style” gold discoveries made by Atac Resources (ATC-V). Atac recently raised $25 million to further explore Carlin-style targets on the Rau trend, as well as targets on the newly identified Nadaleen trend.

The Selwyn basin has long been recognized as having similar features as Nevada’s Great basin. Burke described the Osiris zone at Atac’s Rau project as the first occurrence in the region that highlights its “Carlin” potential, commenting that “the similarities are astounding.”

Exploration also picked up steam in Alaska, according to senior government geologist David Szumigala, with at least $218 million spent last year, “mostly from Canadian sources.”

The list of active projects is diverse, ranging from the immense Pebble copper-gold deposit (by far the largest exploration/development project) to specialty metals.

While zinc still generates the most value in Alaska, the state’s gold mines (Fort Knox, Pogo, Kensington, and placer mines) are coming close to collectively reaching an annual 1-million-oz. production rate. The state has many active gold projects at various stages, mostly in known or historic camps, with at least one company, Full Metal Minerals (FMM-V), exploring the Alaskan extension of the White Gold trend (as well as many other Alaskan projects).

Another new gold district is emerging 170 km northwest of Anchorage, where Kiska Metals (KSK-V) is advancing the gold-rich Whistler gold-copper porphyry deposit and exploring two earlier stage projects: the Island Mountain gold-copper porphyry system and the Muddy Creek intrusion-related gold system. 

As in Alaska, porphyry copper-gold projects were a prime exploration target in B.C., with most of this activity focused on large-scale projects in the mineral-rich Skeena (northwestern) and Omineca (central) districts of the province.

Stand-alone gold projects are few and far between in B.C., relative to the Yukon and Alaska. However, government geologists note that an “on-line staking rush” took place last year in the Nechako-Chilcotin plateau, inspired by
recent gold discoveries.

In 2009, Amarc Resources (AHR-V, AXREF-O) reported the discovery of a new gold deposit type within a previously unrecognized gold district, located about 110 km southwest of Williams Lake. One of the company’s first four holes returned 105 metres of 1.15 grams gold, including 41 metres at 2.49 grams gold, associated with disseminated sulphides localized within pervasively altered volcaniclastic rock units.

The geological setting was recognized as a favourable environment for bulk-tonnage style mineralization, inspiring Amarc to follow-up with a 14-hole drill program. These holes returned broad continuous intervals of bulk-tonnage gold mineralization with associated silver, copper and zinc. Amarc has since added to its land position and completed geophysical and geochemical surveys in advance of its 2011 drill program.

A second gold discovery in the Nechako-Chilcotin plateau was reported by Richfield Ventures (RVC-V) at the Blackwater project in late 2009. Initial drilling also returned bulk-tonnage style mineralization, including 329 metres averaging 1.25 grams gold, which ended in 5 metres at 9 grams gold. Positive results continued in 2010, prompting Richfield to budget $15 million for 2011, to include 30,000 metres of drilling. A preliminary economic assessment (PEA) is expected to follow in the fall.

Another region attracting attention for gold in an unusual setting is the emerging Kimberley gold trend, located about 70 km north of the giant past-producing Sullivan mine. Most exploration in the region has focused on sedimentary exhalative (sedex) deposits similar to Sullivan. In 2000, Eagle Plains Resources (EPL-V) staked ground covering historic iron deposits first staked in 1897. And in 2008, the company reported a gold discovery at its Iron Range project, with one hole hitting 51.5 grams gold per tonne over 7 metres, starting at 20 metres. Providence Capital (PV-V) has an option to earn 60% of the Iron Range project by spending $3 million on exploration, making cash payments of $500,000 and issuing 1 million shares over four years. 

Other juniors have since acquired ground in the 90-km-long Kimberley gold trend, including Fjordland Exploration (FEX-V), based on its newly recognized potential for iron-oxide-copper-gold mineralization.

B.C. has many porphyry-style copper-gold and other polymetallic deposits where precious metals are, or will be, significant contributors to overall project economics. However, the province presently has only one stand-alone gold mine, the past-producing QR mine near Quesnel, which was restored to production last year by Barkerville Gold Mines (BGM-V). B.C. has many active gold exploration projects, but large-scale, stand-alone gold projects in advanced stages of development are rare. One of these few projects, featured at Roundup as “B.C.’s largest sediment-hosted gold deposit,” is aiming to become B.C.’s next mid-tier gold mine.  

Spanish Mountain

The Spanish Mountain gold project is one of the first recognized occurrences of a sediment-hosted gold system in B.C. It’s not a new discovery, as it’s situated in a historic placer gold camp near Williams Lake, and was first explored for high-grade veins in 1921.

Over time, the focus shifted to defining a bulk-tonnage deposit. However, development was hindered by low gold prices and the project’s low grades.

Current operator Spanish Mountain Gold (SPA-V) revived the project in the context of a higher gold price environment, outlined NI 43-101 compliant resources and now has a positive PEA in hand.

Using a gold price of US$950 per oz. and a cutoff grade of 0.2 gram gold, Spanish Mountain has measured and indicated resources totaling 77.37 million tonnes averaging 0.55 gram gold, or 1.37 million contained oz., within a proposed pit design and conceptual mine plan. (The inferred resource stands at 39.5 million tonnes at 0.48 gram gold, or 611,100 contained oz.)

The PEA, completed last fall, assumed a gold price of US$1,100 per oz. Production would average 213,800 oz. annually in the first five years, with life-of-mine average production of 172,400 oz. annually over 10 years at a throughput rate of 40,000 tonnes per day. Projected capital
costs are US$477 million. Cash costs would average US$570 per oz. in years one to five, and US$625 per oz. over the mine life.

Spanish Mountain intends to advance the project to prefeasibility and feasibility studies this year. Toward that end, the company plans to drill mineralized material below the proposed pit design and upgrade inferred resources. The company also plans to drill-test newly defined targets on its adjoining Cedar Creek property.

The Spanish Mountain project is accessible by an all-weather road and is near a power substation, both important advantages for a bulk-tonnage project. These types of deposits are attracting more attention than in the past, given the success of several low-grade bulk-tonnage mines developed in Quebec and Ontario gold camps.

– The author is a freelance writer based in Vancouver, and a former editor of The Northern Miner.