Cedar Mountain drills untested Alaskan gold anomalies

Vancouver – While many of its peers are exploring emerging Yukon gold belts such as the White Gold district and the Selwyn Basin in their hunt for the next big Arctic gold deposit, Cedar Mountain Exploration (CED-V) has its sights set on an even loftier target: to discover an entirely new gold district altogether.

To that end, nearly four years since listing, the company finally started its first-ever drill program last month, comprising 5,000 metres of diamond core drilling on three multikilometre-long gold targets at its only property, Kelly Creek, in western Alaska. The 426-sq.-km, 50-km-long land package is located on the Seward Peninsula roughly 145 km north of the coastal town of Nome, in a historically prolific placer region.

There, Cedar Mountain spent close to $600,000 in 2010 taking approximately 4,000 soil, stream sediment and rock samples outlining seven gold-in-soil anomalies: Kelly Creek, Wolf, Wolverine, South Fox, North Fox, Moose and Jaeger.

The best three – Kelly Creek, Wolf and Wolverine – will be subject to the current drill program, while the rest will be slowly advanced this year through more detailed soil surveys and prospecting. Around 1,500 samples will also be collected from eight other areas during the year’s short exploration season in search of more future drill targets.

Cedar Mountain is now looking to prove its theory is correct – that the initial targets host a near-surface, bulk-tonnage sedimentary gold deposit analogous in some ways to those found in Nevada’s Carlin Trend, or even International Tower Hill‘s (ith-t, thm-n) more-than-10-million-oz. Livengood gold deposit in east-central Alaska, near Fairbanks.

As with many new greenfield projects in today’s rush for gold, Kelly Creek has been briefly explored before; Anaconda Copper Mining found gold mineralization there while exploring for tin in the early 1980s. It drilled two holes at the project, returning 23.5 metres of 1.07 grams gold per tonne and 32 metres of 0.83 grams gold, before pulling out of Alaska for corporate reasons a year later, in 1985.

Cedar Mountain says gold mineralization at Kelly Creek is hosted in a metamorphosed, Devonian-Silurian, carbonate-shale, platform-shelf sequence, and associated with the intersection of specific stratigraphic horizons and secondary fault splays. While a winter road runs through the property’s eastern boundary, the current exploration program will be based out of a new 24-man camp located near the company’s 800-metre-long airstrip. Drilling will be initially supported by all-terrain vehicles and later by helicopter, which the company says is fairly cost-effective.

Led by president and CEO Charles Chebry, Cedar Mountain is one of eight juniors managed by the Vancouver-based Discovery Group, which was started in 2005 by geologists John Robins and John Williamson. So far the group’s biggest success has been Yukon gold finder Kaminak Gold (kam-v), which is spending $15 million this year proving up eight gold discoveries drilled in 2010 at its Coffee gold project in the White Gold district.

Shares of Cedar Mountain closed up 2¢ to 22¢ on 42,000 shares traded on July 19, well within their 52-week range of 13.5¢-35¢. The company has 52.6 million shares currently outstanding and 87.2 million fully diluted, of which management and directors own approximately 22%.