Yukon Nevada cuts more gold at Ketza River

Yukon-Nevada Gold (YNG-T) has intersected gold in step-out holes on its past-producing Ketza River project near the town of Ross River in the Yukon, 125 km northeast of Whitehorse.

The intercepts are reported from four targets. QB is a quartz vein target, while the other three consist of manto, a type of chemical replacement sulphide mineralized body. In the manto at Ketza, massive sulphides have replaced limestone.

The latest four assays from the QB target were from holes 1376, 1390, 1391 and 1426. The longest one, in hole 1390, was 7.8 metres of 5.8 grams gold per tonne from a depth of 60 metres. Another notable intercept was in hole 1376, returning 3.8 metres of 8.8 grams gold from 72 metres depth. True widths are not known yet.

The latest five assays from the three manto targets were from holes 1389, 1422, 1425, 1446 and 1362. The longest intercept was returned in hole 1389, drilled into the Break zone, which cut 9.8 metres of 3.2 grams gold per tonne from 130 metres. Holes 1422 and 1425 were drilled into the Hoodoo zone, returning between 3 and 4.6 metres of 4.6 to 6.6 grams gold from 73 metres. Hole 1362, drilled into the Peel zone, cut two intercepts totaling 3.8 metres of 10.4 grams gold from 52 metres. True widths are not known yet.

In view of the shallow depth of the manto targets, Yukon-Nevada envisages them as candidates for a multiple open-pit operation.

QB is a part of the Shamrock zone. QB and another Shamrock target, 3M, might be loosely characterized as stockworks or breccias, although the host rock is a siliceous siltstone and not an intrusive. The mineralization is in veinlets and altered zones around veinlets, and is not necessarily restricted to larger veins. Therefore QB and 3M are also candidates for open pit mining.

Conversely, other zones in Shamrock, named Gully and Chute, are larger vein targets. They will be approached differently, and underground mining will be considered if grades justify it.

In a release, Graham Dickson, Yukon-Nevada’s president and CEO, said that the results confirmed that Ketza River would be a viable open-pit operation with an extended lifespan. A 2008 resource estimate put measured and indicated resources at 646,000 oz. gold in 4.1 million tonnes grading 4.9 grams gold per tonne, plus inferred resources at 113,000 oz. gold grading 3.3 grams gold.

A previous operator, Canamax, was active at Ketza between 1988 and 1990, mining 100,000 oz. gold from 340,000 tonnes of oxide ore grading 11.6 grams gold per tonne. Owing to low gold prices, the 350 tonne-per-day operation closed without mining the sulphide resource, and some infrastructure still remains (T.N.M. Aug 11-17/08).

Yukon-Nevada envisages a 60-70,000 tonne-per-year operation, running for ten years. The project is part of the traditional territory of the Kaska, a First Nation whose territorial claims have not been settled yet. The company has signed a memorandum of understanding with the Kaska that allows exploration and environmental monitoring activities to proceed.

Yukon-Nevada is waiting for assays from another 24 holes at Ketza.

The company also owns the Jerritt Canyon gold mine, 80 km north of Elko, Nv., with proven and probable reserves of 3.1 million tonnes grading 6.4 grams gold. Mining at Jerritt Canyon was suspended in August because of negative cash flow.

In March, Yukon-Nevada announced its intention to restart milling at Jerritt Canyon, having completed work at the mill to address environmental requirements from the government. The announcement quotes the administrator of the Nevada Division of Environmental Protection as saying that there are requirements to continue operation, and that the Division will be working with the company to meet these.

In a release, Yukon-Nevada says that it has 80,000 contained oz. gold in material above ground ready for processing, anticipated to cost less than US$300 per oz. to process. The company expects that it will be able to deal with all its outstanding liabilities during the ten months it will take to process the material.

At presstime the company has restarted the mill and completed the first gold pour. Yukon-Nevada hopes to reach full production rates by mid-May. The company has not announced a restart of mining at Jerritt Canyon.

In the year to December 31, Yukon-Nevada had a net loss of about US$105 million on revenues of US$49 million. On December 31 the company had current assets of US$29 million, including about US$1 million in cash, and current liabilities of about US$37 million.

In February the company closed two private placements totaling $1.5 million. In March the company announced a private placement of $720,000.

The company has 301 million shares outstanding. At presstime the shares were trading at 13¢. The shares have been trading in a 2¢-$1.60 range over the last 12 months.