Coffee shows golden promise for Kaminak (June 21, 2010)

VANCOUVER — Kaminak Gold (KAM-V) spent 2009 sampling, trenching and mapping its newly acquired land package in the Yukon’s White Gold district. Now, the company is being rewarded for its patience in completing groundwork before drilling with promising gold hits in every drill hole.

The Coffee property covers 360 sq. km and sits 30 km from Underworld Resources’ (UW-V) Golden Saddle discovery, a 1-million-oz. gold deposit that prompted Kinross Gold (K-T, KGC-N) to snatch the junior up for $139 million in a deal set to close shortly. Kaminak started putting its own property together in early 2009 and spent the summer finding drill targets using soil sampling and trenching.

As 2010 rolled around, the Vancouver- based junior had eight targets ready to drill.

An interesting aspect of the White Gold district is that it has never been glaciated, which means soils have not been pushed around. As such, gold-in-soil anomalies should, in theory, indicate very close, hardrock gold sources.

For Kaminak, the theory is working out well. In late May, the company single-handedly reignited interest in the White Gold district with its first set of drill results, which included a best intercept of 17.07 grams gold per tonne over 15.5 metres. Now results are in for seven holes covering two target zones.

The company first probed the Supremo zone, where gold is hosted in a north-south trending structure that produced strong gold-in-soil, trenching and geophysical responses. The second two holes at Supremo, drilled from the same collar 50 metres north of holes 1 and 2, confirmed a north-south strike and a steep easterly dip to the mineralization.

Hole 3 cut 17.4 metres grading 3.26 grams gold, starting at 37 metres depth. Hole 4, drilled at a steeper angle, returned 20 metres carrying 2.47 grams gold from 50 metres downhole.

Previously, hole 1 intercepted 15.5 metres of 17.07 grams gold from 15 metres depth and hole 2 hit 60.3 metres averaging 1.26 grams gold, starting 18 metres downhole and including 12 metres of 3.95 grams gold. Kaminak’s drill is currently on the Supremo zone testing for strike extension.

The south end of the 1-km long Supremo target touches the second area being drill-tested at Coffee, known as the Latte zone. Drilling has now proven up 400 metres of east-west strike at Latte, with gold mineralization hosted in silicified and oxidized sulphides hosted in brittle fractures and breccia zones.

The first two holes at Latte cut across the western side of the zone from the same drill pad. Hole 6 intersected 83.9 metres of 1.08 grams gold from 28 metres depth, and hole 7 returned 55 metres of 1.12 grams gold starting 33 metres downhole. And another 8-metre intercept at 101 metres depth carried 1.24 grams gold.

Kaminak then moved the drill 100 metres to the east and drilled another two holes. Hole 8 cut 51 metres grading 1.32 grams gold from just 7 metres depth. Kaminak notes this hole was collared in wall-altered and mineralized rock, and the true width is not known. Results from hole 9 are still pending, as are the assays from three other holes. Hole 10 is a 200-metre step farther to the east and holes 11 and 12 were collared 100 metres west of holes 6 and 7.

The Supremo and Latte zones are both hosted in arsenic-silver-antimony- barium enriched, altered paragneiss and amphibolite as well as non-foliated dacitic rocks showing pervasive silicification and brecciation. The similarity suggests the two zones were formed by the same hydrothermal event, even though the Supremo zone strikes north-south while the Latte zone strikes east-west. Kaminak says more work is needed to understand the relationship between these two zones, the projected intersection of which could be an important focus for gold mineralization. Trenching crews are currently being moved to the intersection to start sampling.

Kaminak’s share price jumped from just below $1 to the $1.30 area, on news of the first two holes at Coffee. In the ensuing two weeks, it ranged as high as $1.52, closing recently at $1.37. Kaminak has 48 million shares outstanding.