Serengeti gauging Kwanika’s size

SITE VISIT

Fort St. James, B.C. — Since drilling its “discovery hole” on the Kwanika copper-gold project earlier this year, Serengeti Resources (SIR-V, SGRNF-O) has produced several widely mineralized intercepts but also uncovered some structural complexities in the new porphyry.

Hole K-06-9 cut 111.1 metres of 0.69% copper and 0.54 gram gold per tonne in the blind target, including 22.2 metres of 1.49% copper and 1.9 grams gold, initiating a strong rally in the company’s stock to a high of $4.80 from the 60-per-share level.

The grassroots copper-gold porphyry discovery came from a drill hole collared in the central high of an elongated induced polarization (IP) anomaly on Serengeti’s land package. Three of the four other holes drilled in the initial program also returned significant copper-gold intercepts.

Kwanika is situated in the Quesnel Trough, a prominent belt several hundred kilometres long of porphyry copper-gold deposits trending roughly north-south up the centre of the province.

The copper-gold project is situated between Northgate Minerals’ (NGX-T, NXG-X) Kemess South copper-gold mine to the north and Terrane Metals’ (TRX-V, TRXOF-O) advanced-stage Mt. Milligan project.

The regional Pinchi fault goes through Kwanika and forms the western boundary of the copper-gold mineralization.

Porphyry copper-gold at Kwanika is primarily hosted in a monzonite unit intruding an andesitic package that also hosts some mineralization, albeit at lower grades. A steep structural component was determined from drilling.

Copper mineralization occurs as chalcopyrite, bornite, chalcocite, as well as native copper can be seen in the upper sections of a couple drill holes. Serengeti notes gold tends to be associated more with the bornite.

A 15-hole follow-up program initiated in March began to show additional impressive results, including hole K-07-15 that returned 0.61% copper and 0.72 gram gold over 328 metres.

With its share price buoyed from the results, Serengeti closed a $20-million bought-deal financing, comprised of units and flow-through shares priced at $3.00 and $3.75 apiece, respectively, earmarked for more drilling.

However, the final batch of assays from the company’s Spring 2007 drill campaign released in July fell short of investor expectations and triggered a 35% share price slide to around $2.70.

Seven out of the 11 holes cut notable intervals of copper and gold including K-07-18 with 158.3 metres of 0.53% copper and 0.43 gram gold, K-07-20 cutting 107.7 metres of 0.76% copper and 0.91 gram gold, and K-07-24 returning 312.1 metres of 0.27% copper and 0.39 gram gold.

Serengeti subsequently initiated a 45-hole, 18,000-metre follow-up drill program aimed to fill in some gaps and gain a better understanding of Kwanika. Key areas of expansion potential are north and south of the “core-zone” outlined by the higher-grade drill results.

With the extensive overburden cover and almost non-existent outcrop, holes collared at about 50-metre centres along the section lines are likely necessary for development of a reserve-resource estimate.

A historic (non-NI 43-101 complaint) resource based on a dozen drill holes from 1966-1972 identified 36 million tonnes averaging 0.2% copper located several kilometres south of Serengeti’s current program, in the IP anomaly.

After reaching its $4.80 share price high in late-June, Serengeti shares have recently slumped to about $1.40, valuing the company at $62 million based on its 44 million shares outstanding.