Mining News: Interior property shows huge potential

Junior cuts 400 meters of gold mineralization during 2009 exploration program aimed at seeking prospects beyond Whistler zone

Shane Lasley

Mining News

Kiska Metals Corp. cut long intercepts of gold-rich mineralization in two of the five holes that it drilled during the newly formed company’s fall 2009 exploration program. These intercepts indicate that the 173-square-mile, or 448-square-kilometer, Whistler property encompasses multiple metal-rich zones.

Kiska Metals, formed in August as a result of a merger between Rimfire Minerals Corp. and Geoinformatics Exploration Inc., began drilling the property in September.

Geoinformatics optioned the Whistler property from Rio Tinto Ltd. subsidiary Kennecott Exploration in 2007. Based on 38 holes Geoinformatics had an NI 43-101 resource estimate calculated on the project in 2008. According to the estimate, the Whistler zone contains an indicated resource of 30 million metric tons grading 0.87 grams per metric ton gold, 2.46 g/t silver and 0.24 percent copper, or 1.31 million gold-equivalent ounces. In addition, the Whistler zone has an inferred resource of 134 million tons grading 0.64 g/t gold, 2.18 g/t silver and 0.20 percent copper, or 4.44 million gold-equivalent ounces.

The amalgamated company did not investigate the Whistler zone, but instead drilled one hole in each of five regional targets across the property located about 100 miles, or 160 kilometers, northwest of Anchorage.

“The deposit is not going anywhere. We know what we have there, and we have a good idea what the expansion potential is there,” Kiska spokesman Patrick Moodie told Mining News in September. “We think there are more of these deposits on this property of similar or greater size (than Whistler Zone).”

Rio Tinto Ltd.’s Kennecott Exploration, which has a back-in right to earn up to a 60 percent interest in the Whistler project, also wanted to know the property’s potential before deciding whether it wanted to buy a renewed interest in Whistler.

The five 2009 drill targets were selected by a four-member technical committee made up of two geoscientists each from Kennecott and Kiska.

“Seeing as this is a 450-square-kilometer property with a lot of different anomalies of all types – whether it be magnetic anomalies, IP or soil and rock samples – through this entire property,” Moodie said, “the idea, from both companies, is to go in and drill off deposit targets and see what we have there.”

Island Mountain enigma

IM-09-001 targeted the Island Mountain Breccia – a 150-meter-diameter intrusive breccia body located about 23.5 kilometers, or 14.5 miles, southwest of the Whistler zone. Grab samples taken from the area assayed as high as 1.19 grams per metric ton gold, 5.2g/t silver and 0.2 percent copper. Kiska said similar breccias are noted 600 meters northeast and 500 meters southeast of the discovery hole.

The hole intersected two distinct mineralized zones. The upper 150 meters – which averaged 1.06 g/t gold equivalent (0.72 g/t gold, 2.37 g/t silver and 0.16 percent copper – is similar to the mineralization found at the Whistler zone about 25 kilometers, or 16 miles, north. The mineralization in the lower 106.9 meters of the hole – which averaged 1.32 g/t gold-equivalent (1.22 g/t gold 0.69 g/t silver and .05 percent copper) – more closely resembles the gold-dominant mineralization being investigated about 2 kilometers, or 1.2 miles, southeast at the Shoeshine Zone on Millrock Resources Inc.’s Estelle property .

“Island Mountain is a bit of an enigma. It does have characteristics of Whistler – it looks like there are similar Whistler intrusive-suite rocks, but then you get this gold-only zone at the bottom of the hole,” Kiska President and CEO Jason Weber told Mining News.

Weber said the company does not have enough detail yet to solve the Island Mountain riddle.

“We are very encouraged by the discovery at Island Mountain,” said Mark Baknes, Kiska Metals’ vice president of exploration. “The hole ended in a significant stretch of mineralization with surficial and magnetics data indicating further potential both at depth and laterally. We are very excited about follow-up drilling at Island Mountain next year.”

The breccia target at Island Mountain is part of a larger 2.5-kilometer-by-4-kilometer area that consists of Whistler-equivalent intrusive rocks, anomalous copper and gold rock and soil geochemistry and associated gossans covering.

A second hole at Island Mountain, drilled about 1,700 meters north of IM-09-01, cut 202 meters averaging 0.13 g/t gold. While anomalous in gold the hole was lost before reaching its targeted depth.

Big hit at Raintree

Starting at 429 meters, the Raintree hole cut 40 meters that graded 2.27 g/t gold equivalent (0.98 g/t gold, 10.2 g/t silver, 0.21 percent copper, 0.85 percent zinc and 0.35 percent lead).

“We are extremely encouraged by the results of the Raintree drill hole,” Weber said. “Considering that this deep hole ended in mineralization, we feel there is very good potential for a significant porphyry deposit at Raintree and the high lead and zinc values suggests drilling has tested only the margins of such a deposit.”

Though Raintree is near the Whistler zone, Kiska said the two deposits represent two separate porphyry systems.

No significant mineralization was intersected in the two remaining holes that Kiska drilled this year.

One hole was drilled at Lightning, a target identified by outcropping quartz veins hosted by diorite porphyry rocks. Grab samples from the prospect located about 700 meters southwest of the Whistler zone average 1.97g/t gold, 184g/t silver, 0.11 percent copper.

The other hole was drilled at Digger, a magnetic anomaly with no outcrop exposure located about 3.5 kilometers, or 2.1 miles, southeast of the Whistler zone.

“The fact that two of these five initial holes in 2009 yielded significant intercepts in areas away from the Whistler resource is testament to the potential of the greater Whistler project,“ Weber said.

Kiska plans to fire up its 2010 exploration program early in the spring. The company hopes to complete a 340-line-kilometer induced polarization survey that it started this year, and conduct a 5,500-meter drill program to test 15 property-wide targets.

Results from the IP work completed so far will assist in identifying the 15 drill targets of the initial 2010 program.

“We anticipate that integration of the 3-D IP survey data, currently being processed, will assist greatly in vectoring our next round of drilling toward the core of the Raintree system as well as other targets within the corridor,” the Kiska CEO said.

Weber said the Kennecott-Kiska technical committee will get together in late January to identify the drill targets.

Completion of the IP and drill program will trigger Kennecott’s decision regarding its back-in rights on the project. If Kennecott exercises those rights, it will need to refund Geoinformatics and Kiska two times what they spent on exploration on the property, about C$25 million, and fund Whistler exploration through a positive pre-feasibility study to achieve a 51 percent interest. To up its stake to 60 percent, Kennecott can elect to fund the project through to a positive development decision.

Kennecott, which optioned Whistler to Geoinformatics in 2007, will retain a 2 percent royalty if it chooses not to exercise its back-in right for the gold-copper project.