CBR Gold gains on high-grade Niblack hits

Vancouver – If the last few drill holes are any indication, there is a whole lot of high-grade mineralization yet to be found at CBR Gold’s (CBG-V) Niblack project in southeast Alaska.

CBR and Heatherdale Resources (HTR-V), which is earning in a 51% interest in the project, kicked off a 7,600-metre drill campaign at Niblack in October. Drilling from an 880-metre underground exploration drift, the partners are targeting the depth extension of the Lookout zone, which is the largest volcanogenic massive sulphide (VMS) deposit at Niblack to date.

Lookout outcrops on the side of a steep hill and then plunges southwest into the mountain. Drilling from surface provided only limited opportunity to test the deposit’s down-plunge extension. As such previous owner Niblack Mining, which CBR acquired in late 2008, pushed the exploration drift in from the base of the mountain to enable drills to reach the zone from underground.

And reach the zone they have. The last hole of the 2008 program returned a highly promising intercept of 79 metres grading 4.83 grams gold per tonne, 85.31 grams silver per tonne, 1.89% copper, and 4.93% zinc. To start off the 2009 program the Niblack partners moved the drill farther away from the zone, then drilled three holes in a fan pattern from the same set-up. The holes targeted the same area, but the goal was to cut the zone from a more perpendicular angle.

The approach worked. Hole 29, the first hole, hit 18.7 metres grading 2.4 grams gold, 48 grams silver, 1.4% copper, and 2.81% zinc. Hole 30 intersected 10 metres averaging 3.39 grams gold, 57 grams silver, 1.83% copper, and 2.56% zinc. And hole 31 returned a relatively lengthy 43.8 metres grading 3.01 grams gold, 76 grams silver, 2.25% copper, and 5.52% zinc, including 8.7 metres averaging 5.18 grams gold, 133 grams silver, 4.19% copper, and 13.85% zinc.

The new intercepts sit 60 metres away from the intercepts from the end of last year.

“The intercepts were pretty terrible, weren’t they?” joked John Williamson, CBR’s president and CEO. “No – they’re comparable to the best results we’ve gotten out of the project and they’re way better on average than the resource as it stands.”

CBR and Heatherdale plan to continue drilling in the New Year, after a Christmas break, and expect to add a second drill rig to the program soon.

“Right now we’re in the heart of this thing and are definitely planning more holes,” says Williamson.

The resource at Niblack, which is contained primarily in the Lookout zone, currently stands at 2.59 million indicated tonnes grading 2.33 grams gold, 33.19 grams silver, 1.18% copper, and 2.19% zinc, plus 1.71 million inferred tonnes averaging 2.08 grams gold, 32.56 grams silver, 1.55% copper, and 3.17% zinc.

The VMS mineralization at Niblack occurs within a thick sequence of rhyolite that hosts six known massive sulphide occurrences. Mineralization is controlled by fold repetition within the rhyolite sequence; the Lookout zone is on the overturned limb of a property-scale fold.

For a project in Alaska, Niblack is very well located in terms of infrastructure and access. The Lookout zone hill rises up from a inlet on Prince of Wales Island; the island is 44 km away from Ketchikan, a city of 8,000 people with a deep-sea port and airport. The project supported a mining operation from 1905 to 1908, producing some 20,000 tons of ore averaging 2.2 grams gold, 30 grams silver, and 4.9% copper.

The joint venture agreement for Niblack gives Heatherdale, which is part of the Hunter Dickinson group of companies, the right to earn a 51% interest in the property by spending US$15 million on exploration within three years. Heatherdale has already committed to spending US$5.35 million in the first year, which is funding the current drilling effort. The private company can then increase its stake to 70% by spending another US$10 million and completing a feasibility study.

CBR recently closed a non-brokered private placement, raising $2.3 million by selling 4.6 million units at 50¢ a piece. Each unit comprised a share and a warrant exercisable at 65¢ for five years.

On news of the latest drill results CBR’s share price gained 14¢ to reach 76¢. The company has a 52-week trading range of 18.5¢ to 88¢ and has 29 million shares outstanding.

Heatherdale, meanwhile, briefly popped up to $1.67 before settling back around $1.57. Heatherdale’s traded between 7.5¢ and $1.84 over the past 52 weeks and has 40.9 million shares outstanding at last count.