Kaminak Gold reignites Yukon gold district (May 27, 2010)

Kaminak Gold (KAM-V) shares jumped 49% or 44¢ apiece to $1.34 per share in Toronto following bonanza assay results from the first two holes drilled at its 100%-owned Coffee project in the White District of Canada’s Yukon Territory.

The Coffee project is about 20 km south of Underworld Resources‘  (UW-V) White Gold property, which includes the Golden Saddle deposit, about 95 km south of Dawson City.

Golden Saddle has an indicated resource of 1.01 million oz. gold at a grade of 3.2 grams gold per tonne and 407,413 oz. of inferred resources at an average grade of 2.5 grams gold per tonne. In March, Kinross Gold (K-T, KGC-N) announced it was acquiring 100% of Underworld in a deal valuing Underworld’s fully diluted share capital at about $139.2 million.

Drill results from Kaminak’s nearby Coffee project and specifically from its Supremo zone, one of eight targets on the Vancouver-based junior’s 43-km-long property, indicate that the White district is an emerging gold district, Rob Carpenter, the company’s president and chief executive, said on a conference call to discuss the results.

“Exploration in this area has been very basic,” Carpenter told analysts and investors. “But what is unique about this part of the world is that it has never been glaciated so that means that the soil samples are very representative of what’s below…We’ve got eight very large soil anomalies and we’ve proven now that if you drill below these soil anomalies you have gold in the rock so it proves that the area has potential…The beauty of the Coffee property is we’ve got gold right on surface and our exploration model has been very simple.”

So far Kaminak has soil sampled just 7% of its property but has had stakers on the ground since February. “We believe the district is still fairly early stage despite the major discoveries so far,” Carpenter noted. “This is a very much underexplored part of the world.”

The first drill hole in the Supremo zone intersected 17.07 grams gold per tonne over 15.5 metres (starting at 15 metres downhole) and the second hole ended in mineralisation with intersections of 3.95 grams gold over 11.95 metres (starting at 18.7 metres); 4.89 grams gold over 5 metres (starting at 72 metres); 2.11 grams gold over 14 metres (starting at 124 metres); 4.31 grams gold over 2.75 metres (starting at 145.25 metres); and 2.96 grams gold over 4.1 metres (starting at 169.65 metres to the end of the hole).

The mineralized intervals from hole 2 were calculated using a 1 gram gold grade envelope but if the intervening low-grade segments were included in the calculations, then the entire intercept from hole 2 could be considered to grade 1.26 grams gold over 60.32 metres starting at 18 metres, with a second zone of 1.15 grams gold over 51.32 metres starting at 122.43 metres.

Hole 1 intercepted a single, thick interval of 17.07 grams gold over 15.5 metres starting at 15 metres downhole, hosted primarily in silicified breccia units and minor non-brecciated silica-altered gneiss.

By contrast, mineralization in hole 2 was mainly hosted in broad zones of quartz veining and silica-flooding with restricted breccia zones and yeilded five significant gold-bearing intersections.

Both holes intersected extensively oxidized, limonitic, clay- and silica-altered augen gneiss host rocks displaying complex multi-phase hydrothermal breccia (fragmental) textures in addition to quartz vein stockworks, minor pyrite and rare arsenopyrite.

Drill holes 1 and 2 were drilled to the east from the same set-up and were designed to test the depth extent of high-grade gold-in-rock results obtained by Kaminak in 2009 along the Trench 3 trend. Hole 1 was drilled at a -50 degree angle and hole 2 was drilled at a -70 degree angle.

The two holes were drilled from the same set-up at the Supremo zone, one of eight top priority targets identified on the 43-km long property. Drilling continues with samples being processed at the assay laboratory from Supremo step-out holes and initial holes from the Latte zone, 1 km to the south of Supremo.

New geological mapping and trenching completed at Supremo this year suggest mineralization at Trench 3 is hosted in a north-south trending linear structure/alteration zone that extends for at least 200 metres and is open in both directions along trend, as well as to depth.

Measurements from oriented core from both holes 1 and 2 also appear to indicate that gneissic banding is shallowly dipping to the west and that mineralized veins occur at high angle to the gneissic fabric, suggesting “near-vertical” dipping gold zones. More drilling on this section will be required in order to correlate rock units and mineralized zones from hole 1 and 2 and also to determine the true width of these zones.

One interesting component of the property is the presence of barite, a sulfur-bearing mineral. “When you look at the rock under the micron microscope it is loaded with barite and native gold,” Carpenter noted. “It is common in some types of deposits and we’re seeing it as a key indicator here in the Coffee project.”

The barite is very fine grained and it’s usually found in the matrix of the breccias. “My understanding is that barite is very prevalent at the Golden Saddle deposit,” he added. “It appears that these types of elements are becoming more common in the district and if we can use them as potential vectors to gold mineralization we will follow up on that.”

So far Kaminak has completed thirteen drill holes across different zones on its property (Supremo, Latte, and Double Double). Results from two of the initial four holes were released on May 26. Its next batch of assay results from seven holes drilled on the Latte zone, 1 km south of the Supremo zone, will be out in the next couple of weeks.

Over the last year Kaminak has traded in a range of 22¢-$1.10 and has 46.5 million shares outstanding.