Palomar exploring Doyon mineral lands

Since acquiring the land package as a result of the Alaskan Native Claims Settlement Act in 1971, Doyon has sought to attract mining companies to join in the formidable task of exploration and development.

Earlier this year a subsidiary of Palomar Capital Corp. (VSE) entered into a 50/50 joint venture with Caithness Gold Mining, a New York-based private mining firm, to explore more than 3.5 million acres of those mineral lands.

The joint venture is known as the Caithness/Alaska Mining Company and it holds an exclusive 7-year option to explore and lease certain lands owned or controlled by Doyon. The package is made up of 14 blocks of property ranging in size from 70,000 to 780,000 acres.

Palomar Chairman William Bird said the joint venture was attracted to Alaska because it represents one of the last exploration frontiers in North America.

“The price of properties in the southwestern United States is simply far too high,” he said. “We prefer to create value on the lower end.”

Bird stressed, however, that the value of the lands optioned from the total Doyon holdings is supported by extensive historic gold production and by over $15 million in recent exploration. Although gold (in a variety of geologic environments) is the primary target, the properties are believed to have considerable potential for base metal or polymetallic mineralization.

Palomar has selected the Flume Creek and Indian Mountain areas as its key projects on the Doyon lands. Drilling is planned to begin next season at Flume Creek to further test a 2-mile long structure with gold occurrences believed identical in character to the California Motherlode. The less-advanced Indian Mountain project is described as a volcanogenic epithermal-type gold project.

The company’s most advanced project is currently the Nixon Fork project near McGrath, Alaska, which is part of a separate joint venture agreement with Caithness. The two companies can earn a 51% interest in the 5,000-acre project from Battle Mountain Exploration which is reported to have previously outlined a 320,000-oz gold resource grading 1.105 oz gold per ton.

Recent drilling by Palomar on the property returned 38 ft grading 1.043 oz, while a hole drilled 2,200 ft to the west of this returned 30 ft with a weighted average grade of 2.582 oz. The company plans to continue drilling to hopefully outline sufficient reserves to support a low tonnage, high grade underground gold mining operation.

Palomar also plans to explore highly prospective ground adjacent to Nixon Fork held under in its option agreement with Doyon. The company operates its work programs from a field office in Fairbanks.

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