Sitka buys Victoria Gold’s abutting Clear Creek in Yukon

Sitka Gold (TSXV: SIG) (OTCQB: SITKF) is expanding in the Yukon by acquiring the adjoining Clear Creek property from Victoria Gold (TSX: VGCX) in a cash and shares deal valued at nearly $15 million. 

The agreement consists of 21.8 million or 8% of Sitka’s shares, which closed at 18¢ apiece on Friday, for a value of about $3.9 million, plus three payments totaling $11 million over three years, the companies said Monday. 

Sitka is advancing the RC gold project about 100 km east of historic Dawson City and 60 km southwest of Victoria’s Eagle, the territory’s sole operating gold mine. The deal gives Sitka the largest land package midway between Eagle and Victoria’s past-producing Brewery Creek mine.

“The purchase of Victoria Gold’s Clear Creek property marks a significant milestone in the evolution of the RC gold project,” Sitka Gold CEO Cor Coe said in a statement. “It consolidates the entire Clear Creek intrusive complex under one owner.”

Historical work on the property targeted the southern portion of the complex, with initial drilling seeking mineralization similar to Kinross Gold’s (TSX: K; NYSE: KGC) Fort Knox mine in Alaska, Sitka said. The Victoria, Sitka and Kinross properties sit on the Tombstone Gold Belt arcing across the Yukon and part of Alaska. This month Snowline Gold (TSXV: SGD; US-OTC: SNWGF) reported a strong initial ressource for the Valley target in the Rogue project near the border with the Northwest Territories. 

Shares in Sitka Gold fell 5.6% to 17¢ apiece by mid-afternoon Monday in Toronto, valuing the company at $42.5 million. They’ve traded in a 52-week range of 16¢ to 27¢. Victoria Gold stock rose 1.8% to $7.43 each for a market value of $503.4 million. Their respective high and low over the last year have been $9.45 and $5.09.

Previous exploration

In the 1990s, both Noranda and Kennecott conducted drilling on the property. One hole returned 1.03 grams gold per tonne over its entire length of 67.1 metres. Redstar Resources also made a discovery with an intersection of 26.7 metres grading 2 grams gold.

Under Victoria’s ownership, the Clear Creek property was optioned to Golden Predator between 2009-2012. It drilled several zones on the property and intersected 42.7 metres of 1.87 grams gold and 10.7 metres of 20.46 grams gold.

By acquiring the property, Sitka would add as many as four high-priority targets for intrusion-related gold deposits (for a total of 12) in the heart of the Tombstone belt. The size of its RC property would also increase from 386 sq. km. to 431 sq. km.

The RC project has a resource of 61.1 million inferred tonnes grading 0.68 gram gold for 1.34 million oz. metal. It has two near and on-surface zones: the Blackjack and Eiger gold deposits.

“Sitka’s recent discovery of the Blackjack and Eiger deposits has proven that the district hosts very significant gold deposits,” Coe said. “The higher-grade Blackjack gold deposit being the cornerstone to develop the potential of the region with an initial inferred 900,000 oz. resource from surface grading 0.83 gram gold.”