Klondike looks to find the source of the old gold rush

Klondike Gold (KG-V) is back in the Klondike gold fields of the Yukon looking for the source of all that historic placer gold production at its Lone Star property.

The company is working on the thesis that the gold fields south of Dawson City that fuelled a gold rush and produced over 10 million ounces of the yellow metal, comes from local sources.

With that idea in mind, it acquired 133 sq. km of land at Lone Star, reasoning that the creeks and tributaries that made up the core of gold fields, drain from hard rock claims that it now controls.

And while the company has drill tested the Lone Star zone, which has a strike length of over 3,500 metres, its latest focus has been on other targets generated after it recognized disseminated mineralization in Klondike schist.

Exploration results from the new areas of interest are too early-stage to confirm any substantive find, but they do indicate that the company could be on the right path.

Results were from the Violet vein trend, the 310 Zone, and recently discovered Boy soil anomaly and will be used to guide planned drilling in the New Year.

Most impressive were grab samples from Violet which assayed 41.25 grams gold with 524 grams silver and 47.4 grams gold with 894 grams silver. Such stellar sample results could be evidence of higher grade material, the company says.

Bolstering that belief are historical samples of up to 131.6 grams gold in surface sampling from the zone.

Klondike says the Violet vein trends towards and beyond the 310 zone and the New Boy is a 400 by 900 metre open-ended soil anomaly.

The exploration program is focused on prospecting, rock sampling, and soil sample lines and has generated solid drill targets for 2013.

Sporadic work done in the area from 1980 to 2008 didn’t find high grade results to drive further exploration, even though the Violet vein system was recognized to run over 4 km in the direction of the 310 Zone to the northwest.

The market seems to be willing to engage the thought that Klondike may be on to something. Klondike shares have climbed 50% or 3¢ to 9¢ on heavy volume since releasing the news on Sept. 20. The company has 81.7 million shares outstanding.