Vancouver —
SKN will form a joint-venture company with the Regional Geological Survey Team (RGST) in which SKN can earn an 80% interest by investing US$3.25 million over three years. In the first year, SKN must spend at least US$500,000. Once vested, the partners will contribute on a pro rata basis. RGST’s interest can be diluted to not less than 10% if it elects not to make cash contributions.
The acquisition is subject to several factors, including: completion of due diligence (including field visits and confirmation of the data supplied by the Chinese partner); an independent review of the project to conform to National Instrument 43-101; signing of a formal joint-venture contract; and regulatory approvals.
The project is 700 km northeast of Lhasa, the capital of Tibet, and accessible via a 90-minute flight from the city of Chengdu, in Sichuan province, to Changdu, followed by a 3-hour drive on a national highway to the property. The project area is on a plateau at an altitude of between 4,400 and 4,700 metres above sea level. SKN reports that the area has never been extensively explored.
The Zage prospect lies on the southern side of the suture zone between the Gangdis (Nian Ching) Tanggula tectonic plate and the Yangtze tectonic plate. The area hosts carbonaceous slates interbedded with siltstones, and these sediments have been intruded by granite and albite porphyry stocks.
The RGST produced a geological map of the area on a scale of 1:200,000 and a stream-sediment geochemical survey at 1:500,000. The latter survey identified two significant gold anomalies about 4 km apart and parallel to each other. They both strike to the northwest for 5-8 km. Only part of the south anomaly has been tested for gold mineralization, by surface trenching.
The Zage prospect represents the northwestern corner of the south anomaly. Six trenches were dug across this anomaly, resulting in the identification of a high-grade gold zone that strikes to the northwest and extends for 1.4 km. The following grades (which have yet to be verified by independent means) were cut in the trenches:
— Trench TC12 averaged 10 grams gold over 25 metres, including a 10-metre section averaging 24.05 grams gold.
— Trench TC0, 300 metres east of TC12, averaged 1.54 grams gold over 70 metres and included a 7.5-metre section of 7.2 grams gold.
— Trench TC1, 360 metres east of TC12, averaged 6.3 grams gold over 9.2 metres, including 11 grams gold over 4.7 metres. Another section of the trench averaged 1.9 grams gold over 10.2 metres and included a 1.4-metre section of 9.3 grams gold.
— Trench TC19, 860 metres east of TC12, averaged 4.6 grams gold over 3 metres.
— Trench TC25, 1,100 metres east of TC12, averaged 12.2 grams gold over 13.5 metres, including an 11-metre section of 15.9 grams gold.
A vertical hole was drilled at the southern end of trench TC25 and returned 6 metres averaging 1.1 grams gold starting at a down-hole depth of 61.7 metres. SKN says the core recovery was poor.
Several grab samples collected 5 km southeast of Trench TC12, within the same geochemical anomaly, returned 6-8 grams gold per tonne.
The gold mineralization is related to the fine quartz veining networks hosted in carbonaceous slates. Where quartz veining is well-developed, the gold grade tends to be much higher. The mineralization is believed to be related to northwest-striking faults and a nearby porphyry stock.
An initial mineralogy study indicates that more than 93% of the gold is in free and coarse form and that the sulphide content is low. A preliminary metallurgical test on a 160-kg sample, taken from trench TC25, showed that more than 91% of the gold can be easily recovered by gravity circuits and that 99% recovery can be achieved by combined gravity and cyanide leach.
Eight other exploration permit areas were staked based on gold geochemical anomalies hosted in similar rock environments, though these areas have yet to be explored.
Meanwhile, in Yunnan province, SKN has inked a deal with Yunnan Golden Industry Investment Co. to explore 226 sq. km near
SKN will form a joint-venture company with Yunnan Golden Investment, which would allow SKN to earn a 70% interest in the property over four years. At least US$600,000 must be spent in the first year. Once vested, contributions will occur on a pro rata basis. Yunnan Golden’s interest can be diluted to not less than 10% if it elects not to make cash contributions.
The property, known as Dongchuan, in underlain by Proterozoic-aged carbonaceous slate units and calcareous siltstones that are the same as those that host the Boka gold mineralization. Dongchuan hosts numerous copper-gold and gold showings, as well as several gold stream-sediment anomalies. SKN plans to kick off exploration with stream-sediment sampling.
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