Kinross eyes Kubaka lookalike in Russia

A blind discovery in the Magadan region of northeastern Russia is looking more and more like the producing Kubaka gold deposit.

Kinross Gold (K-T), which holds 54.7% interests in both projects, is understandably excited about the progress: Kubaka is its second-largest and cheapest producer. But Kubaka is also one of the major’s smallest deposits, rendering the new discovery that much more exciting.

Dubbed Birkachan and situated 28 km north of Kubaka, the newly discovered zone has yielded up to 110.11 grams gold per tonne over 3.9 metres in drilling. Of the 80-odd holes drilled to date, half returned intercepts greater than 1.2 metres in true-width and carrying more than 5 grams gold.

“This is considered the minimum amount of mineralizaiton to be possibly economic for selective mining methods,” says Project Manager Barry Gillies.

Following those criteria, Kinross, in 1999, began prospecting in the vicinity of the mine, even sinking a few holes beneath anomalous overburden blanketing the Mizinets Valley. Preliminary results from that drilling warranted follow-up programs, and more than 18,000 metres have been drilled since.

Disseminated mineralization underlies the entire valley, covering an area 2.5 km long by 100-300 metres wide. Within that area are six high-grade feeders appearing in the form of quartz-adularia-hydromica veins, similar to Kubaka.

The structures, which strike northeasterly and dip subvertically, are surrounded by alteration patterns that indicate an epithermal system. And like Kubaka, the zone is hosted by Devonian volcanics; is near northeasterly striking thrust faults; and lies on the perimeter of a basin of younger-capping rocks to the west.

Gold values spike to 307 grams in the structures but average about half a gram outside them. Mineralization has been intersected to more than 400 metres below surface, where it remains open.

“Epithermal systems such as Kubaka have a high horizontal-to-vertical aspect ratio,” notes Gillies, “[and] occurences of good mineralization over 300 vertical metres at Birkachan equals or betters vertical mineralization at Kubaka. Given the other similarities between the two, the potential to extend mineralization along strike is very good.”

Highlights from drilling include 5.5 metres (true width, starting at a down-hole depth of 225.2 metres) grading 41.08 grams and 8 metres (starting at 350.4 metres) grading 57.29 grams in hole 2102. The latter interval represents a hydrothermal breccia with visible gold enclosed and rimming some of the fragments, and three 25-metre stepouts confirmed its continuity along strike on either side.

Further drilling is required in order to calculate a resource estimate. Toward that end, another 30,000 metres will be drilled in 2001 to confirm the vertical and strike continuity of the higher-grade structures. Holes will be drilled to between 250 and 300 metres below surface.

Numerous soil and stream-sediment anomalies elsewhere in the region are sure to keep geologists busy for a while yet. So far, Birkachan remains the only “blind” discovery in this remote part of Russia.

Meanwhile, Kinross has doubled the size of the Goose Lake deposit, near Bathurst Inlet in Nunavut. Inferred resources now stand at 3.9 million tonnes grading 12.51 grams gold per tonne, which increases the total resource to 7.81 million tonnes averaging 11.25 grams.

Goose Lake is the largest of six deposits that comprise the George Lake project of Wheaton River Minerals (WRM-T). Kinross can earn a 70% interest in the project by spending $20 million over four years.

Another 9,000 metres are planned for 2001, and Kinross says it needs to outline 2.5-3 million oz. grading 13 grams at one location in order to overcome the high operating costs characteristic of this region.

Progress is also reported in Alaska, where Kinross has received a mining permit for the True North project. The first batch of ore is expected to be processed, at the nearby Fort Knox plant, by the second quarter. Combined, the two deposits are expected to produce 450,000 equivalent ounces in 2001 at a total cash cost of US$196 per oz.

At last report, Fort Knox hosted proven and probable reserves of 111.9 million tonnes grading 0.83 gram gold per tonne, whereas True North contained 6.6 million tonnes grading 2.17 grams. Both deposits are wholly owned by Kinross.

Kinross intends to buy the assets of Pentland First Ventures (PFO-T) in lieu of $1.7 million in debt. The junior can repay its remaining debt in shares, which would bring Kinross’s equity-stake to about 48%.

The deal has yet to be approved by regulators.

Pentland holds 290 sq. km near Timmins, Ont. Several of the properties adjoin those owned by Kinross.