The area play around the 5.2-million-oz. Pogo gold project in Alaska is slowly generating interest among speculative investors, and this slowness is partly due to the lack of historical exploration in the region.
Pogo is a totally blind deposit with no surface expression. Grassroots reconnaissance exploration in the early 1980s led eventually to its being drilled in 1994, but it wasn’t until after their 1997 drill program that joint-venture partners
The project is 90 miles east-southeast of Fairbanks and 40 miles north of the town of Delta Junction in the Goodpaster district of east-central Alaska. Pogo is accessible by helicopter and small fixed-wing aircraft, with road access limited to winter months.
The terrain consists of rolling, tundra-covered and lightly timbered hills, with a vertical relief of about 3,000 ft. The property encompasses about 72 sq. miles.
The Liese zone occurs in the northwestern part of the Pogo claims and consists of three or more large, tabular, gently dipping subparallel quartz bodies hosted primarily in Proterozoic-to-early Paleozoic gneisses of the Tanana terrain. The deposit lies 1 mile south of the southern margin of a mid-Cretaceous intrusive batholith suite.
Liese is divided into the main L1 zone and a lower zone called L2. The two zones are spaced 500 ft. apart. The bodies range in thickness from 1 to more than 70 ft., averaging about 20 ft. The main L1 zone is 4,500 ft. long and 2,000 ft. wide, and remains open to the southeast and the northwest. Parts of L1 are within 350 ft. of surface.
The Liese L1 and L2 zone are conservatively estimated to contain a resource of 10 million tons grading 0.52 oz. gold per ton, using a cutoff grade of 0.1 oz.
A possible third zone, L3, has been pierced by two deep drill holes 400 ft. below L2. In addition, limited drilling has identified a zone above the main L1 body, but it is discontinuous.
The quartz bodies contain about 3% ore minerals, with pyrite, pyrrhotite, loellingite and arsenopyrite being the dominant sulphides, together with lesser amounts of chalcopyrite, bismuthinite, maldonite and native bismuth. The gold is uniformly fine-grained, and project geologist Moira Smith has been quoted as saying, “You generally have to squint really hard with a 20 power hand lens to see it.”
Early biotite and later quartz-sericite stockwork and sericite-dolomite alteration are spatially associated with the Liese zone, which shows characteristics of both vein and replacement styles of mineralization. Geochemical data suggest a strong correlation between gold and bismuth, and a weaker correlation between gold and other lithophile elements.
Smith says the Liese deposit appears to represent a deep-seated manifestation of the plutonic-related gold deposit type, which includes Fort Knox, True North, Brewery Creek and Dublin Gulch.
The Alaskan subsidiary of Watts Griffis & McOuat (WGM) is credited with having discovered Pogo. In 1981, the firm conducted stream sediment-sampling and found that Pogo Creek, and, to a lesser extent, Liese Creek, returned weak gold and multi-element anomalies. Follow-up work found some gold-mineralized quartz float.
Working on behalf of Sumitomo, WGM did not return to the area until 10 years later, in 1991, and carried out a grid soil-sampling program that identified a 1-sq.-mile gold anomaly with greater than 100 parts per billion (ppb) gold. In 1994, three holes were drilled, followed by 13 more the next year.
Teck signed a letter-of-intent with Sumitomo in June 1997 and concluded a deal later that year. Teck can earn a 40% interest in the Pogo project by spending US$28 million and producing a feasibility by the end of 2000. It is also responsible for funding the first US$33 million of development costs.
To date, 176 drill holes have intersected the Liese zone, with nominal drill hole spacing ranging from 200 to 400 ft. Drilling has focused on a limited, 1-sq.-mile portion of the property, leaving 71 sq. miles unexplored.
Although Teck has carried out geophysical work on the Liese zone, geochemical sampling has been found to be an effective exploration tool. Smith says there is excellent potential for the discovery of additional high-grade gold resources on the property. Regional reconnaissance work has identified an 8-mile-long trend of anomalous gold in rocks and soils, extending to the southeast. In particular, quartz boulder trains, found in four separate areas, have yielded multi-ounce gold values, including 13- and 28-oz. grabs from Tan Creek Ridge and 3 oz. from Sonora Creek Ridge.
Ventures Res.
In January, Teck exercised 1.4 million class A warrants of New Jersey-based
Ventures is exploring the Veta property through a $7.6-million equity financing arrangement with Teck. The major initially invested $4.1 million in Ventures by buying 3.7 million shares at $1.10 in December 1997. Teck was granted 1.4 million warrants exercisable at $1.25 for one year and 1.3 million warrants exercisable at $1.40 for two years.
Teck can select one project on the Veta property and earn a 60% interest by completing a bankable feasibility study.
Exploration at Veta is being managed by WGM, which is also supervising work, including drilling, for Sumitomo, in the immediate area of the Veta property.
Last year, exploration at Veta concentrated on Carrie Creek, a 16-sq.-mile area on the western edge of the property block. Anomalous gold values were outlined in four parallel zones, which are up to 2.5 miles long and 1,000 ft. wide. Several chip samples yielded values greater than 1 oz. gold per ton.
A 3-hole drill program was completed in September. However, weather conditions this past winter limited drilling to a single pad at the lowest elevation in the target area. The holes encountered significant quartz veining, with associated sulphide mineralization and widespread alteration, but only anomalous gold values.
Ventures says the higher-grade targets remain untested. The 1999 exploration program will include 8,000 ft. of drilling in the Carrie Creek area.
Ventures, through an exclusive agreement with Doyon, controls the mineral rights to six large property blocks comprising more than 3 million acres. The 5-year agreement, which was extended by another two years to 2003, calls for annual payments of US$250,000 and annual exploration expenditures of US$1.5 million. Once a discovery is made, Ventures will have a further 15 years to construct a mine. Since entering into the agreement in 1996, Ventures has spent more than US$7 million on the Doyon properties.
The company has about 55.9 million shares outstanding, or 61.1 million on a fully diluted basis.
Rimfire
Rimfire Minerals, a private exploration company backed by the principals and senior technical staff of Equity Engineering, has assembled a land package of 1,615 mining claims and 28 prospecting sites covering more than 108 sq. miles in the immediate Pogo area.
Using a compilation of all publicly available geological, geochemical and geophysical data, in conjunction with information specific to Pogo, Rimfire began staking ground last July and continued to acquire claims throughout the season, late into November.
Regional aeromagnetic and geologic surveys have revealed linear magnetic low anomalies, which coincide with a series of small plutons. The Liese zone and the 8-mile trend of anomalous showings occur along one of these interpreted linear magmatic and magnetic features, known as the Pogo trend.
A second, east-westerly trending linear feature, Big Swede, lies south of Pogo.
Rimfire selected claims based on regional similarities to Pogo using a combination of the following criteria:
- regional stream sediment-sampling anomalous in arsenic, bis
muth and tungsten; - mid-Cretaceous intrusives, preferably on low magnetic trends and associated older gneisses; and
- associated northwesterly and northeasterly trending structures.
Rimfire is seeking a listing on the Vancouver Stock Exchange (VSE), and could begin trading sometime in April. An initial public offering will consist of 2 million units priced at 50 cents each. A unit will comprise one share and one warrant. Two warrants will entitle the holder to buy an additional share at 70 cents for a period of 18 months. The underwriter is Pacific International Securities.
Western Keltic
The California and Surf properties lie along the projected east-southeasterly Pogo trend.
In late September 1998, exploration crews carried out a 13-day reconnaissance program of mapping and sampling on the California claims, as well as one day of prospecting on the Boogie claims. The work confirmed the presence of Cretaceous granitic intrusive rocks and dyke-like intrusive bodies. A program of geochemical stream sediment-sampling identified areas of anomalous gold, arsenic and bismuth, when compared with background levels established by an earlier National Uranium Resource Evaluation government survey. Silt samples yielded gold values as high as 1,025 parts per billion (ppb).
Western Keltic has staked two additional property blocks, covering 15.2 sq. miles in the immediate area of Pogo.
The company recently closed a brokered private placement with Pacific International Securities. The financing consisted of 1.5 million units priced at 15 cents each and raised $225,000 in proceeds. Each unit consists of one share and a half warrant. One full warrant entitles the holder to purchase an additional share at 20 cents for a period of one year. The company has $700,000 in its treasury and 9.1 million shares outstanding (10.6 million fully diluted).
Blackstone Resources (BZZ-A) , which shares management with Western Keltic, staked the 9-sq.-mile Falcon property along the Big Swede trend, 25 miles southeast of Pogo. In consideration, Rimfire will receive 200,000 shares of Blackstone over three years and a 3% net smelter return royalty. Rimfire is also entitled to 25% of all future cash or stock considerations that Blackstone may receive from subsequent joint ventures on the property.Hyder Gold (HGI-V) can acquire up to a 70% interest from Rimfire in five property blocks covering 22,240 acres in the district. Two of the blocks, the Ogo and Fire claims, tie directly on to the northwestern corner of Pogo and lie along the same proposed trend.The Bou and Top claim blocks lie 19 miles southeast of Pogo, along strike of the proposed trend, while the fifth property, Eagle, is 25 miles southwest of Pogo on the Big Swede trend.
Hyder can earn an initial 51% interest by spending $1.3 million on exploration and making total payments of $230,000 in cash and 200,000 shares by Dec. 31, 2001. The company will be able to increase its interest to 70% by paying a further $1 million.
Hyder intends to begin a field program of geological mapping, geochemical sampling and prospecting in early June. It has 22.8 million shares outstanding (26.1 million fully diluted).
- Yukon-based Engineer Mining is another soon-to-be-listed VSE junior. An initial public offering of 1.5 million units priced at 50 cents each, consists of one share and one warrant. Two warrants entitle the holder to buy an additional share at 50 cents in the first year or 70 cents in the second. Yorkton Securities is the underwriter.
Engineer Mining holds a 51% stake in a joint venture with Rimfire in 120 minerals claims covering 4,800 acres, 6 miles west of the Pogo property. Engineer can increase its interest to 70% by spending $750,000 on exploration by the end of 2001.
North Star
Lakewood, Colo.-based North Star Exploration is a privately held exploration company with an exclusive 5-year option on a 7-million-acre land package in Alaska’s interior. In May 1997, through an agreement with the Alaskan native corporation Doyon, the company acquired the 25 blocks of land that constitute the North Star properties. The properties are in various stages of evaluation and contain a wide range of target types. At least some form of preliminary exploration was conducted by Doyon or others to the tune of US$10 million.
Since forming the option agreement with Doyon, North Star has spent more than US$3 million evaluating all available data, performing preliminary property visits and conducting airborne geophysical surveys over three advanced properties. In the process, it has identified more than 200 prospects. The company is seeking to joint-venture selected parcels of its package.
North Star’s holdings include the Healy Lake property block, 12 miles southeast of the Pogo property. Healy Lake encompasses 800 sq. miles, of which 250 sq. miles are held through the Doyon agreement, with the rest being state land. North Star added to its package by staking an additional 80 sq. miles of claims covering 10 prospects in or near the block, including ground adjoining the western boundary of Pogo.
In 1998, North Star identified and explored prospects in and around Healy Lake. Reconnaissance sampling revealed areas anomalous in gold and other pathfinder elements. In particular, a multi-element rock and soil anomaly was defined over several thousand feet on the Divide Creek claim block. Related anomalous elements include gold, copper, molybdenum, bismuth, silver and arsenic.
Blue Desert Mining (BDE-A) recently optioned toCamflo Resources (CFK-A) the right to earn a 55% interest in the Gobi-Portal property, which covers 26 sq. miles immediately east of the Pogo project. Camflo must make a one-time cash payment of up to $30,000, spend $1 million on exploration over four years and issue a total of 200,000 shares. The Gobi property surrounds a pre-existing, 700-acre block owned by Sumitomo.Blue Desert also owns the 11,200-acre Sahara property block, 5 miles east of Pogo, and has an option to buy the 18,000-acre West Point block, 35 miles northeast of Pogo. Anomalous bismuth and other trace elements are reported in stream sediments draining the property.
Blue Desert raised $128,000 in a private placement in February.
Williams Creek Explorations (WCX-V) andAlmaden Resources (AMH-V) jointly staked a 13,120-acre claim block adjoining the southern border of the Pogo project. A work program to explore the property is planned for the upcoming field season.Valerie Gold Resources (VLG-V) can earn a 70% interest in the Octo property by making certain cash and share payments over a 36-month period and spending US$200,000 over one year. Valerie can buy the 30% carried interest at any time for 200,000 shares. The Octo property comprises 17,760 acres, 5 km northwest of Pogo along its projected trend. A work program is planned in 1999.Troymin Resources (TYR-A) acquired five blocks of mining claims and prospecting sites totalling 35,200 acres in the Goodpaster district.Camnor Resources (CMB-V) staked two blocks of ground, South Salcha and Cabin, based on favourable geology, geochemistry and geophysical data. The Cabin property is 12 miles southwest of Pogo and covers 1,920 acres. Stream sediment-sampling returned anomalous gold, whereas regional airborne geophysical surveys show a magnetic low.The South Salcha property occurs in an area of historic placer mining, 26 miles northwest of Pogo, an
d totals 2,240 acres. Streams draining the property are anomalous in gold, tungsten and bismuth.Fairfield Minerals (FFD-T) has granted an option toInternational Riley Resources (IRR-V) to earn a half-interest in its Rock Creek and Shawnee prospecting sites. The Shawnee block adjoins the northeastern boundary of the Pogo project, whereas the Rock Creek block lies 4 miles farther northeast.International Riley must pay Fairfield $20,000, issue 200,000 shares in four tranches and spend US$1 million in exploration over five years.
Eastfield Resources (ETF-V) has acquired four state claims and 66 prospecting sites covering 16.5 sq. miles of ground, 10 miles northeast of the Pogo project. The company is reviewing the project with other companies for an exploration joint venture.Snowfield Resources (SNO-V) purchased a 100% interest in a 32.9-sq.-mile property block, 7.5 miles northeast of Pogo. The property adjoins the northern boundary of ground originally staked by La Teko Resources and now held byKinross Gold (K-T) .Newmont Gold (NEM-N) holds claims contiguous to the eastern and western sides of the Snowfield block.In February, Snowfield completed a $127,000 private placement financing that consisted of 850,000 special warrants priced at 15 cents. Each special warrant is convertible into one share and one warrant entitling the owner to buy an additional share at 15 cents in year one, or at 20 cents in year two.
Achieva Development (AHE-V) holds a 100% interest in a 24-sq.-mile claim block situated 4 miles west of Pogo. The company is entertaining joint venture proposals.
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