Providing coverage of Alaska and Northwest Canada's mineral industry
November 2009

Vol. 14, No. 47 Week of November 22, 2009

Mining News: 2008 gold discovery gets better in 2009

Explorer drills longer intersections of high-grade gold at Rau Project in east-central Yukon; plans C$12.5 million program in 2010

Shane Lasley

Mining News

RAU PROJECT, Yukon Territory – While the “White Gold Rush” captured the headlines in 2009, Atac Resources Ltd. quietly conducted a one-company claim-staking rush covering known geochemical and geological targets around its Rau gold property here in east-central Yukon Territory’s Tombstone Mountains, 55 kilometers, or 35 miles, northeast of Keno City.

Adding to the claims already held by Atac, the junior expanded the Rau gold property to more than 600 square kilometers, or 232 square miles, situated in a highly prospective geological setting between the regional-scale Dawson and Kathleen Lake Thrusts.

“This is a different style deposit for the Yukon. The Dawson Thrust and Kathleen Lake Thrust encapsulate a Paleozoic limestone package,” Mike Burke, a senior geologist for the Yukon Geology Survey, explained.

A recent interpretation by the Vancouver B.C.-based junior has identified strong similarities between the geological settings of the Rau property and the northern part of the Carlin Trend, a 50-mile-long-by- 5-mile-wide belt in Nevada considered the most prolific goldfield in the Western Hemisphere. 

The junior began exploring the property with an 18-hole drill program in 2008, which discovered both sulfide and oxide gold mineralization in an area known as the Tiger zone.

The initial focus of the 53 holes drilled at Rau in 2009 was on the oxidized portion of the Tiger zone, a thick northwesterly trending body of carbonate replacement-style gold mineralization hosted by a moderately northeast-dipping horizon.

Starting off the 2009 exploration season in mid-June with one drill rig, the junior quickly added a larger core drill. The second rig came equipped with large core diameter (HQ) split-tube equipment to maximize recovery of the oxide gold mineralization, which occurs in intensely decomposed, porous limestone.

“We are very pleased with the continuity and tenor of oxide mineralization revealed to date at the Rau property. We currently have one drill systematically delineating the core of the oxide zone and plan to add another to accelerate this process. A scout drill is presently working to determine the limits of the zone and will later be used to test other encouraging targets on the property,” Atac CEO Graham Downs told reporters during a tour of the property in August.

Oxides the focus in 2009

Atac’s 2009 drill season at Rau started off with a bang. The first hole of the season, Rau-09-19, cut 28.04 meters of limestone-hosted, massive iron and arsenic-rich oxides that averaged 24.07 grams per metric ton of gold, including a 2.9-meter intersection that graded 162 g/t gold.

Drilling the oxidized core of the Tiger Zone continued to produce long sections of gold mineralization. Highlights from assay results returned in August include:

Rau-09-23 intersected 16.76 meters of oxidized mineralization averaging 15.64 g/t gold;

Rau-09-27 intersected 54.60 meters of oxidized mineralization averaging 3.16 g/t gold;

Rau-09-31 intersected 65.51 meters of oxidized mineralization averaging 2.13 g/t gold; and

Rau-09-34 intersected 39.73 meters of oxidized mineralization averaging 3.74 g/t gold.

Atac was particularly excited about the next batch of drill results. Rau-09-41 cut 20.67 meters with an average grade of 23.01 g/t gold. The exceptionally high grades in 09-41 were significant because they show that the Tiger zone is open to expansion down-dip to the northeast and along strike to the northwest, directions the company previously thought the zone may have been cut off.

Preliminary metallurgy tests of the oxidized mineralization also have produced exceptional results. Cyanide leach tests on five samples taken from hole 09-19 averaged 97.55 percent recovery in 24 hours.

“These highly encouraging results from preliminary leach tests are a key development for the advancement of the Rau gold project because they suggest that the oxide mineralization is potentially amenable to simple and low-cost extraction processes,” Downs said.

Two distinct sulfides

Drilling in 2009 also cut long intersections of gold-bearing sulfide mineralization. Rau-09-60 intersected 72.32 meters of sulfide mineralization averaging 3.15 g/t ton gold. Hole 09-60 was drilled about 50 meters west of Rau-08-05, which cut 78.54 meters grading 1.71 g/t gold. Hole 08-05, which was one of the first holes Atac drilled at Rau when it began exploring the property in 2008, was previously the best sulfide intersection at the Tiger zone.

While holes 08-05 and 09-60 are the highest grade gold intersects in sulfide mineralization to date, the junior believes the gold discovered in Rau-09-44 and Rau-09-61 could prove to be more significant.

Drilled 75 meters southeast of hole 08-05, hole 09-44 cut 36.78 meters grading 3.71 g/t gold. Hole 09-61 was drilled another 75 meters farther south and hit 11.58 meters averaging 4.29 g/t gold. The importance of these two holes is that they contain proportionally more pyrite and much less arsenopyrite than the other sulfide intersects at Rau. The company believes this distinct sulfide mineralization could extend to the southeast below the depth of the drilling completed in 2008 and 2009.

“It (the sulfide mineralization) started getting better to the southeast. As we got closer to the corridor we are following, it’s getting higher grade,” Downs told Mining News.

The 12,200 meters of drilling in 2008 and 2009 have outlined a 600-meter-by-100-meter area of oxidized mineralization averaging 35 meters thick and a 350-meter-by-120-meter zone of sulfide mineralization that runs about 50 meters thick. Most of the gold mineralization discovered within the past two years lies within 100 meters of the surface and many holes intersected mineralization directly below a thin layer of overburden cover.

“We are very encouraged that the Tiger zone continues to expand, and the high-grade trends of oxide and sulfide mineralization are open to further expansion on both sides of the zone,” Downs said.

Eagerly anticipating 2010

While drilling continued at the Tiger zone, geologists began exploring to the northwest seeking other prospects along the 22-kilometer-long structural corridor at the Rau property.

The reconnaissance soil sampling program identified six new surface gold zones. The best zones and their related soil geochemical anomalies are in a 500-meter-wide belt, which lies 2-5 kilometers, or 1.24-3 miles, to the northwest of the Tiger zone. Surface rock samples collected from talus or recessive weathering gullies within the new zones returned assays between 1 g/t and 18.5 g/t gold.

The junior reports that additional anomalous soil geochemical values stretch intermittently for about 22 kilometers, or 13 miles, to the northwest along a well-defined structural trend that is marked by magnetic highs and electromagnetic conductors.

“We have discovered six new gold occurrences along that trend. We are going to drill a bunch of those targets next year,” Downs said.

Excited about the discoveries made in 2009, the junior plans to spend at least C$12.5 million to drill a minimum of 15,000 meters at the Rau property in 2010.

“The final 2009 drill results are very exciting as they continue to exhibit excellent grades and further confirm the near-surface setting of the mineralization,” Downs said. ‘The company is eagerly anticipating an early return to the property in spring 2010 to continue drilling the open extensions of the Tiger zone and to test six recently discovered gold occurrences situated on trend northwest of the Tiger zone.”

The junior plans to add one or two drills to next year’s exploration campaign. The plan is to send two rigs out to investigate the new occurrences and the balance will continue delineating the Tiger zone, according to Downs.

More than Rau

Though Atac’s primary focus was on the Rau area, the junior also got in on the “White Gold Rush.” In late 2008 and early 2009, the company staked four claim groups – Matson, Green Gulch, Dan Man and Touleary – adjacent to and near Underworld Resources Inc.’s White Gold property. Atac said the properties cover the probable sources of strong gold-in-silt anomalies and placer gold deposits.

Atac optioned the four properties, collectively known as the Dawson Gold Project, to Arcus Development Group Inc. in June.

“Atac continues to implement its project-generating business model of identifying early- to mid-stage precious metal opportunities and finding strong partners to advance them,” Downs said. “The optioning of the Dawson Gold Project to Arcus falls directly in line with our corporate objectives, and we look forward to working with them in an emerging gold district.”

During the winter of 2008-2009 Atac also staked four properties (Black, Ross, Ham and Hobo) about 50 kilometers east of the former Brewery Creek gold mine in central Yukon, and three properties (Stoked, Rae and Mouse) spread along a belt stretching from 80-125 kilometers, or 50-78 miles, along strike to the west of the Rau property.

All told, Atac has laid claim to 19 properties in Yukon Territory.

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