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MINING NEWS: Core drilling complete at Gold Hill project First phase of core drilling concluded at Alaska Range gold property; MAX Resource hopes to continue work this fall Patricia Liles Mining News Editor
MAX Resource Corp. recently completed its first phase of core drilling on its new Interior Alaska property, the Gold Hill project about 10 miles off the Denali Highway.
In early July, drilling crews and geological consultants from Alaska Earth Sciences completed 1,400 feet of core drilling, drilling seven holes each to a depth of about 200 feet, according to Clancy Wendt, vice president of exploration for MAX Resource.
Now, MAX Resource hopes to initiate a second phase of core drilling this year, although that work depends on whether the company can secure a drill rig later this season. “Drill rigs are getting as scarce as hen’s teeth,” he said.
Plans call for an additional 12 holes to be drilled, for a total of 2,400 feet, Wendt said. That drilling may be held until next year, when additional airborne and ground geophysical work is also contemplated for the Gold Hill property. “The plans are to test new targets plus follow up on known ones,” he said.
The company spent about $200,000 for the July drilling work, and is awaiting assays. Should MAX Resource land a drill rig for the second phase of drilling, roughly another $200,000 will be spent. Past drilling produces high grade intercepts This summer’s initial drilling was designed to give geologists a better look at the Gold Hill mineralized trend, and to confirm past reverse-circulation drilling completed in the late 1980s by Amax Exploration. Amax, which optioned the property in 1988, identified some high-grade gold intercepts in a 21-hole reverse-circulation drill program designed to test the prospect for a bulk tonnage open pittable deposit.
Those include Hole 7, which showed five feet grading 0.18 ounces of gold per ton of rock, Hole 16, which produced five feet grading 0.46 ounces of gold per ton of rock, five feet grading 0.23 ounces per ton and five feet grading 0.66 ounces of gold per ton of rock, and Hole 17, which contained five feet of 0.19 ounces of gold per ton of rock.
“These holes are open along strike and, since they were drilled with a reverse circulation drill rig which encountered large quantities of water, they should be re-examined to see if loss of gold might have occurred,” the company said in a press release.
Prior to Amax’s work, General Crude Oil drilled five diamond drill holes after acquiring Gold Hill in 1983, with the best intercept of 11.5 feet grading 0.668 ounces of gold per ton of rock.
The property was first prospected by Dome Exploration and Cities Service Co., beginning in 1972, during an unsuccessful search for an economic deposit of molybdenum.
Gold Hill is an intrusion-related gold system and analysis of geophysics indicates a number of buried intrusives on the property which have not been explored, according to a company statement.
Hydrothermal alteration is pervasive throughout the property, the company said. Quartz-sericite-pyrite alteration is evident around the summit of Gold Hill and in a low saddle east of West Hill. Gold mineralization is believed to be related to the intrusions and pyrite, arsenopyrite, pyrrhotite, chalcopyrite, molybdenum and gold are found in veins and as disseminations in host rocks. Creeks in the area contain placer gold and have been previously worked. MAX signs option this spring MAX Resource, a Vancouver, British Columbia-based junior exploration company, has recently come out of dormancy to take on the Gold Hill project. The company is looking for other exploration projects, Wendt said. “We don’t want to be a one-project company.”
Gold Hill’s historical record drew the company to it, he said.
“I’ve heard about it for a number of years and after seeing the old results from Amax’s drilling…,” Wendt said. “There were some significant numbers … but never another drill hole put on the property.”
General Crude has been sitting on the property for more than 10 years, he said. “It took us a year to make a deal with them — they’re not a mining company.”
MAX Resource announced in May its option agreement with Zazu Exploration, a privately held Texas-based corporation which holds the mining claims lease from General Crude for the Gold Hill property. Terms with Zazu include a payment of $25,000 and the issuance of 100,000 shares and 100,000 warrants exercisable at 47 cents per share for a two-year period. To maintain the option, MAX must issue an additional 200,000 shares by Jan. 1, 2005, and another 200,000 shares by Jan.1, 2006.
In addition, the company must spend $100,000 on exploration and pay $5,000 for an advance royalty in 2004 and in 2005 spend $150,000 on exploration and pay $15,000 for advance royalty.
The Gold Hill property includes 3,873 hectares (9,570 acres) of land off the Denali Highway, roughly midpoint of the gravel road that stretches from Cantwell to Paxson through the heart of Alaska. Located 200 kilometers (124 miles) south of Fairbanks, access is by ATV from the Denali Highway or by helicopter.
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