Orefinders sees potential in gold-rich Kirkland Lake

VANCOUVER — When equity markets and investors get skittish, being an explorer in an established jurisdiction with minimal socio-political risk can really pay off. And with that in mind, Vancouver-based junior Orefinders Resources (ORX-V) set its sights on mature gold camps in Ontario’s Red Lake and Kirkland Lake districts in a bid to identify historic projects that could put the company on the map.

After looking at a number of opportunities, Orefinders settled on the Mirado gold project, 35 km southeast of the gold mining town of Kirkland Lake, which lies in the prolific Abitibi gold district. Mirado is a brownfield project that first produced in the 1930s, bringing 40,000 metres of historic drilling that helped Orefinders fast-track its target identification and get the drills turning.

“We took a serious look at what was around Red Lake and Kirkland Lake, and ended up acquiring Mirado,” company president Bill Yeomans comments during an interview. “It’s actually been in production a few times, but the main complaint back then was that the miners were not interested in the lower-grade gold that appeared to be all over the place. We looked at the historic holes, and in addition to there being significant high-grade gold there were also broad zones of low grade that perked our interest, since they were close to surface.”

Orefinders got to work compiling its historic data and identified two areas of interest for its inaugural drill campaign, namely its North and South zones. The North zone lies near Mirado’s historic mining shaft and hosts vertical mineralization that appears to have strong continuity. The South zone is Orefinders’ bulk-tonnage target, where the company has focused much of its drilling so that it can outline a maiden resource as quickly as possible.

“Once we had that compilation done we shot it with a deep-penetrating, induced-polarization survey,” Yeomans says. “Lo and behold, it was one of those unique situations where all the pyritic mineralization that is associated with the gold lined-up quite nicely with the chargeability. So we have some well-defined targets. In that process several new things came up, and that helped us prioritize. There are areas around the North zone and the shaft where there is little drilling, and we see some strong, deep-seated structures there that look promising.”

And Orefinders is definitely fast-tracking its work at Mirado. The company is aiming to complete its 100% earn-in requirements by year-end. Under its Mirado agreement, Orefinders is obligated to spend $2 million in exploration within three years, but according to Yeomans the company had completed 75% of that requirement by the end of May. The agreement also features a 3% net smelter return royalty, which Orefinders can buy back for $6 million.

By May 28, Orefinders had completed 8,800 metres at Mirado over 29 holes, and the company has been cutting some impressive widths and grades. Highlights from exploration drilling at the South zone include: 46 metres grading 1.33 grams gold per tonne from 136 metres depth in hole 13-03; 4.3 metres averaging 9.88 grams gold from 56 metres in hole 13-06; 19.5 metres grading 3.65 grams gold from 265 metres in hole 13-10; and 8.2 metres of 10.6 grams gold from 62 metres depth in hole 13-12.

Mirado comes with historic metallurgical work completed in the 1980s, with gold recoveries from gravity concentration and flotation clocking in at 94.4%, with direct cyanidation recoveries around 95%.

Orefinders expanded its presence in the Kirkland and Larder Lake gold district when it nailed down a deal for its South Break land package in early March. South Break includes patent claims that have not been optioned or explored since the 1940s, but Yeomans sees potential in some of the historic results.

“Since these are patent claims we can do anything in a heartbeat there. So we have an excavator going in and we’re going to clean up the historic trenches in front of the old drill casing, and we’ll do some channel sampling to see if we can verify some results,” Yeomans comments, citing historic results that returned 59 grams gold over 2 metres. “You can see the holes lined up right up at the trench, so it is pretty obvious they had the mineralization in outcrop, so we’ll clean that off and confirm those numbers.”

Orefinders looks well-positioned to continue its exploration activities at Mirado and South Break. The company had $3.2 million in the bank at the end of May and expects to end the year with $2.2 million. Orefinders has a relatively tight equity structure with 48 million shares outstanding, and has jumped 50%, or 10¢, since early May to sit at 30¢ per share at press time. The company has traded within a 52-week range of 18¢ and 95¢, and maintained a $14-million market capitalization at press time.