Marathon likes what it sees at Golden Chest

After releasing a maiden resource estimate last month for its 50%-owned Golden Chest mine project in Idaho, Marathon Gold (MOZ-T) is back in the news with drill results that the junior exploration and development company describes, along with its other work on the property, as a “very encouraging start.”

Marathon and its joint-venture partner and project operator, New Jersey Mining Corp., are undertaking a 20,000-metre drill program of both surface and underground core drilling as well as underground development that has already demonstrated that gold mineralization has a strike length of at least 1.1 kilometres and is open to the north and south.

The most significant intercept released today was from hole 107, which returned 5.2 metres of 12.4 grams gold per tonne from a depth of 74.3 metres and 7.74 grams gold over 2.5 metres from 107.1 metres. The underground hole extends gold mineralization nearly 100 metres to the south of previous drilling.

Phillip Walford, Marathon Gold’s president and chief executive, says part of the beauty of the Golden Chest property—in the Coeur d’Alene mining district about 2.3 km east of Murray, Idaho —is that the majority of historic exploration took place there during the 1890s and early 1900s before the use of diamond drills and the mechanization of the industry.  

“Right now we’re drifting on a vein just off the old workings that runs half an ounce per tonne and was never discovered,” Walford says. “They had no idea whether it existed or not. Back then everything was done almost all by hand, there were no hand drills or anything else, it was just chisels … Mechanization really did change the game.”

Shallow underground mining of the Katie and Dora high-grade veins produced an estimated 65,000 ounces of gold before work on the property ground to a halt in 1904, the victim of flat gold prices and increasing mining costs.

“Golden Chest basically went to sleep until about the 1960s,” Walford says, when a small company came in and did a bit of mining in the north end of the property and put in three holes.  

“Golden Chest is unique in that you’ll never find a mine like that in Timmins or Red Lake because they’ve either been mined or extensively explored,” Walford says. “There just wasn’t the exploration [in this part of Idaho] as there has been in most of Canada so that has given us a great opportunity.”

Newmont Exploration Ltd. explored the area in the late 1980s, punching thirty-five shallow reverse circulation and five core holes into the property and came up with an inferred resource estimate of 231,000 ounces at 1.66 grams gold per tonne. Marathon says Newmont’s historic resource estimate was largely contained to a large quartz vein system known as the Idaho vein on the southern end of the Golden Chest property.

“They did some widely spaced reverse circulation drilling on surface and they encountered mineralization that we have defined now and they decided it was too small for them and let it go,” Walford says. “They didn’t drill underground.”

New Jersey Mining Corp. has leased the property since 2003 and before its joint-venture partnership with Marathon completed about 3,500 metres of core drilling primarily focused on extending the Idaho vein at depth. The company conducted small-scale underground mining of about 8,400 tonnes averaging 6.9 grams gold per tonne.

Highlights from the latest drill holes Marathon released today include underground hole 117, the southernmost hole drilled on the property that extends gold mineralization by 300 metres from previous drilling. The underground hole returned 3.56 grams gold over 5.1 metres of true vein thickness, which according to Marathon indicates that the gold system is “high-grade and continuous.” Underground hole 106 cut 8.22 grams gold over 3.9 metres from 153.4 metres and hole 101 returned, while open-pit hole 102 cut 1.26 grams gold over 12.4 metres.

Currently Golden Chest’s measured and indicated resources stand at 3.11 million tonnes grading 1.47 grams gold for 147,000 ounces of contained gold. Inferred resources add   4.98 million tonnes averaging 1.46 grams gold for 233,300 ounces of contained gold.

Walford said the company hopes to complete an updated resource estimate at the end of the year.

There are 24 patented mining claims and 70 unpatented mining claims and the patented claims that cover the mine workings have mineral and surface rights allowing the joint venture to work easily on the property. “Unlike lode claims on public lands we can actually construct roads and do exploration without any permits,” says Walford. “To build a mill and a tailings facility we’ll need permits and an environmental review but to do exploration work, no, because it’s private land.”

Gold mineralization at the Golden Chest is related to a thrust fault known as the Idaho fault and the property is on the west limb of the Trout Creek anticline, a major north-trending fold in the Prichard formation.

Golden Chest is a classic lode quartz gold system, mostly with gold and a little bit of tungsten associated with it. In the southern part of the mine, gold mineralization is found near and parallel to the north-trending Idaho fault while the northern part of the mine hosts the higher grade Katie and Dora veins, which splay off the Idaho fault in a northeasterly direction.

Marathon has about $8 million in cash in its treasury and has doubled the amount of drilling each year since 2010—both at Golden Chest and its flagship Valentine Lake project in Newfoundland, about 57 km south of the mining town of Buchans. This year it plans to drill 40,000 metres at Valentine Lake, a 50/50 joint venture with Mountain Lake Resources. Marathon is the operator.

“What we focus on are properties in under-appreciated and good mining jurisdictions that have good potential for million-plus ounce deposits,” Walford says. “We’re not looking to find something, we’re looking to expand on what’s already there and that lessens our risk.”

Marathon closed 5¢ or 5.95% higher at 89¢ per share within a 52-week range of 69¢ -$1.70 per share and has about 30 million shares outstanding.