Goldcorp takes stake in Independence Gold

Thumbing through a feasibility report on Kaminak Gold’s (TSXV: KAM; US-OTC: KMKGF) Coffee gold project in the Yukon, it’s easy to see why Goldcorp (TSX: G; NYSE: GG) — just six weeks after tabling a friendly $520-million bid for Kaminak — has scooped up a 19.9% position in junior gold explorer Independence Gold (TSXV: IGO).

Vancouver-based Independence holds the 185 sq. km Boulevard gold project, which is referenced in the Kaminak report as hosting mineralization that’s likely a next-of-kin to Coffee’s multimillion-ounce, structurally controlled gold deposit.

Boulevard falls along the western edge of Kaminak’s land holdings and is 135 km south of Dawson City in the Yukon Territory — a historic placer mining town in the heart of the Klondike gold fields.

“Goldcorp looked at our land holdings and recognized the property’s potential to host a similar discovery to Coffee,” Randy Turner, Independence Gold’s president and CEO, told The Northern Miner. “We’re pleased to welcome Goldcorp as our shareholder and we see their investment as a validation of our exploration results.”

Under the terms of the private placement, Goldcorp will inject $2 million into Independence in exchange for 10.9 million flow-through shares, which would bring the junior’s working capital up to $7 million.

Regional geology and location of Independence Gold’s Boulevard gold project, Yukon Territory. Credit: Independence Gold.

Exploration on the property has so far outlined two zones of structurally hosted gold: Sunrise-Sunset and Denali, located 8 km southwest and 8 km west of the Coffee project.

The Denali zone is marked by a gold- and arsenic-in-soil anomaly measuring 700 metres long, and Sunrise-Sunset has a similar V-shaped anomaly, with one side measuring 1.5 km long and the other measuring 1 km long.

Last year, exploration focused on the Sunrise-Sunset gold zone, where reverse-circulation (RC) drilling returned 3.1 metres of 15 grams per tonne gold and 4.6 metres of 1.63 grams gold. The program was designed to follow up on an earlier intercept of 12.2 metres of 7.23 grams gold.

This year, the company plans to drill 1,500 metres of RC at Denali, where previous drill intercepts returned 3.1 metres of 3.33 grams gold and 6.1 metres of 4.25 grams gold.

It has also budgeted 2,000 metres of rotary air-blast drilling on a variety of other greenfield projects in the district, along with trenching, mapping and soil sampling. The program’s total cost is $1.5 million.

Kendra Johnston, head of corporate development for Independence, said during a phone interview that the drill program at Denali aims to “address some unanswered questions” about the controls to mineralization.

Drillers at Independence Gold’s Boulevard gold project in the Yukon’s White Gold region, 135 km south of Dawson City. Credit: Independence Gold.

The prospect falls along strike of west-trending structures related to the Big Creek-Coffee Creek fault system that also hosts Coffee’s Latte and Double Double deposits, and its Americano and Americano West prospects.

“We’ve mapped structures to the edge of our property and you can easily draw a dotted line to where Kaminak had mapped theirs,” she said. “But the difference is that Coffee is hosted primarily within felsic gneisses and schists, whereas mineralization at our property is found entirely in the schists, so the rheological controls that drove and concentrated the gold wouldn’t necessarily be the same.”

According to Kaminak’s feasibility study, gold-rich fluids powered through the west-trending fault system and dropped much of its base-metal and silica content at Boulevard before migrating upwards into Coffee’s domain.

The fluids veered off into a series of north-trending, strike-slip fault splays and precipitated gold.

The splays host most of Coffee’s resource, which stands at 63.7 million indicated tonnes averaging 1.45 grams gold for 3 million oz. gold, and 52.4 million inferred tonnes of 1.31 grams gold for another 2.2 million oz. gold.

These mineralizing events occurred during the mid-Cretaceous period — almost 100 million years after another gold event linked to the 20 million oz. of placer gold dredged out of the Klondike gold fields.

The only significant hard-rock gold deposit related to the earlier event is Kinross Gold’s (TSX: K; NYSE: KGC) Golden Saddle deposit, 95 km south of Dawson City, which contains 9.8 million inferred tonnes of 2.67 grams gold for 840,000 oz. gold.

“When Golden Saddle was discovered and gold hit US$1,800 an oz., everyone loved the Yukon,” Turner said. “Now, with the price of gold moving back and Kaminak being taken over by Goldcorp, everyone loves the Yukon again. It’s a great mining jurisdiction with a lot of discovery potential.”

Independence Gold has traded within a 52-week range of 25¢ and 5¢ per share, and closed at 24¢ per share at press time. The company has 43.8 million shares outstanding for a $10-million market capitalization.