Mining Explorers 2017: Peak Gold LLCA joint venture between Contango ORE Inc. and Royal Gold Inc.
Peak Gold, a joint venture between Contango ORE Inc. and Royal Gold Inc., completed roughly US$11.8 million of exploration in 2017 at Peak Gold (formerly Tetlin), an extensive land package in Eastern Interior Alaska located near the crossroads town of Tok. The Peak Gold property hosts high-grade skarn deposits with gold, silver, copper and other metals.
Contango ORE discovered the metals potential of Peak Gold while surveying the area for natural gas in 2008. After a preliminary investigation of this discovery, the Texas-based minerals exploration company leased 635,000 acres of prospective lands from Tetlin Village, an Alaska Native corporation in eastern Alaska. By 2014, Contango Ore had outlined a high-grade skarn deposit at the main Peak zone with more than 1 million gold-equivalent ounces, which includes the value of the copper and silver also found there. In a rare move for Royal Gold, the Denver-based royalty company agreed to join the project as an active exploration partner. Under an agreement struck late in 2014, Royal Gold is earning a 40 percent joint venture interest in Peak Gold by investing US$30 million on exploration, an earn-in that should be nearly complete by the end of 2017.
Up until this summer, the Peak Gold partnership focused primarily on upgrading the resource in the Main Peak and adjacent North Peak zones. This work has culminated in a global resource for these parallel deposits – measured, indicated and inferred – of 15.65 million metric tons averaging 2.98 grams-per-metric-ton (1.5 million oz) gold, 14.68 g/t (7.39 million oz) silver and 0.16 percent (55 million lb) copper.
With a substantial resource established, the Peak Gold JV turned its summer 2017 exploration towards investigating the larger property, including drilling six prospects near the Peak zones. This work turned up West Peak Extension, a zone that extends northwest from Main Peak. The best hole, 17379, cut 8.1 meters averaging 5.22 g/t gold from 103 meters; and 29 meters of 2.53 g/t gold from 117 meters. The new mineralization tapped at West Peak Extension remains open to expansion, including toward the north side of Main Peak.
Three holes drilled to collect material from Main Peak for metallurgical testing cut the high-grades of skarn mineralization that has become expected from this zone. One of these holes traversed four mineralized intercepts, including 140.9 meters of 13.27 g/t gold; and another cut three mineralized intercepts, including 65.8 meters of 20.14 g/t gold. While results from the Main Peak metallurgical work is pending at the time of this report, 19 composite samples from North Peak averaged 97.5 percent gold recoveries during 48-hour cyanide leach bottle roll testing.
The summer program also included reconnaissance exploration at Noah, a prospect on state mining claims west of the leased Tetlin property. Contango Ore reported multiple gold bearing samples from streams draining the Hona prospect, and visible gold in pan concentrate samples from elsewhere on the Noah block. Peak Gold will decide on follow-up activities at Noah after all the data from the program is received and interpreted. Given the success during the spring and summer programs, Royal Gold agreed to fund a US$1.5 million third phase of 2017 exploration to further explore West Peak Extension and two other prospects. By the end of this program, Royal Gold will have invested nearly US$30 million on Peak Gold, the amount needed to earn a 40 percent interest in the expansive and minerals-rich property.
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