SKN Resources inks deal for more ground in China

Vancouver — SKN Resources (SRL-V) has entered into an agreement with the Regional Geological Survey Team of HGMR covering nine exploration permit areas that together cover 197 sq. km in the Zage area, in the northeast Xizang Autonomous Region of China.

According to the terms of the agreement, SKN Resources will form a Sino-Foreign joint venture cooperative company with the Regional Geological Survey Team (RGST) in which SKN has the right to earn an 80% interest by investing US$3.25 million over three years. During the first year a minimum of US$500,000 must be spent. Once vested, the partners will contribute on a pro-rata basis. RGST’s interest can be diluted to not less than 10% if RGST elects not to make cash contributions.

The acquisition is subject to completion of due diligence, including field visits and confirmation of the data supplied by the Chinese partner, an independent review of the project to conform to National Instrument 43-101, signing of a formal joint venture contract and regulatory approvals.

The Zagew gold project is situated about 700 km northeast of Lhasa, the capital city of Tibet. Access to the property is via a one and a half hour flight from the city of Chengdu in the Sichuan province to Changdu, then a three hour drive on a national highway to the property. The project area is on a plateau at an altitude of between 4,400 and 4,700 metres above sea level. SKN reports that the area has never been extensively explored.

The Zage prospect lies on the southern side of the suture zone between the Gangdis – Nian Ching – Tanggula tectonic plate and the Yangtze tectonic plate. The area mainly hosts carbonaceous slates interbedded with siltstones. These sediments have been intruded by granite and albite porphyry stocks.

The RGST produced a geological map of the area on a 1:200,000 scale and a stream sediment geochemical survey at a scale of 1:500,000. The stream sediment survey identified two significant gold anomalies. These anomalies are about 4 km apart and parallel to each other and both strike to the northwest for 5 to 8 km. Only part of the south anomaly has been tested for gold mineralization by surface trenching.

The Zage prospect represents the northwest corner of the south anomaly. Six trenches were dug across this anomaly. A resulting high grade gold zone was identified. It strikes to the northwest and extends for about 1.4 km. The following grades were cut in the trenches. These data have yet to be verified by independent means.

• Trench TC12 averaged 10.0 grams gold over 25 metres. This included a 10 metre section that averaged 24.05 grams gold.
• Trench TC0, situated 300 metres east of TC12, averaged 1.54 grams gold over 70 metres and included a 7.5-metre section that averaged 7.2 grams gold.
• Trench TC1, situated 360 metres east of TC12, averaged 6.3 grams gold over 9.2 metres, including 11.0 grams gold over 4.7 metres. Another section of the trench averaged 1.9 grams gold over 10.2 metres and included a 1.4-metre section that averaged 9.3 grams gold.
• Trench TC19, situated 860 metres east of TC12, averaged 4.6 grams gold over 3.0 metres.
• Trench TC25, situated 1,100 metres east of TC12, averaged 12.2 grams gold over 13.5 metres. This included an 11-metre section that averaged 15.9 grams gold.
• Trench TC35, situated 1,350 metres east of TC12, averaged 2.6 grams gold over 13.5 metres and included a 3-metre section that averaged 6.0 grams gold.

A vertical hole was drilled at the south end of trench TC25 and returned 6 metres averaging 1.1 grams gold starting 61.7 metres down-hole. SKN states that the core recovery was very poor.

Several grab samples collected 5 km southeast of the trench TC12 within the same geochemical anomaly returned 6-to-8 grams gold per tonne.

SKN reports that gold mineralization at the Zage prospect is related to the fine quartz veining networks hosted in carbonaceous slates. Where quartz veining is well developed, the gold grade tends to be much higher. The mineralization is believed to be related to northwest trending faults and a nearby porphyry stock.

An initial mineralogy study indicates that in excess of 93% of the gold is in free and coarse form and the sulphide content is very low. A preliminary metallurgical test on a 160 kg sample taken from trench TC25 showed that over 91% of gold can be easily recovered by gravity circuits and 99% recovery can be achieved by combined gravity and cyanide leach.

SKN states that eight other exploration permit areas were staked based on gold geochemical anomalies that were hosted in similar host rock environments. No exploration work on these areas has been performed yet.

Moving to the Yunnan Province, SKN also recently inked a deal with the Yunnan Golden Industry Investment Company to explore a 226 sq. km area along the Southwestern border of Southwestern Resources (SWG-T) Boka gold project.

According to the agreement, SKN will form a sino-foreign joint venture cooperative company with Yunnan Golden in which SKN has the right to earn a 70% interest in the property over four years. A minimum of US$600,000 must be spent in the first year. Once vested contributions will occur on a pro-rata basis. Yunnan Golden’s interest can be diluted to not less than 10% if it elects not to make cash contributions.

The property, dubbed Dongchuan, in underlain by Proterozoic-aged carbonaceous slate units and calcareous siltstones that are the same as those that host the Boka gold mineralization. Dongchuan hosts numerous copper-gold and gold showings and several gold stream sediment anomalies. SKN plans to kick of exploration with a 1:25,000-scale stream sediment sampling program as well as prospecting program.