Another Kuskokwim Delta gold hunt

Tonogold Resources Inc., a California junior mining company, is mounting a gold exploration campaign in Alaska's Kuskokwim River Delta this summer not far from the city of Bethel. The move marks Tonogold's first exploration venture in Alaska and the second gold project in the Kuskokwim delta in recent years.

La Jolla-based Tonogold came to Alaska looking for an affordable "company-making property" and wound up signing a 10-year mining lease last month with Calista Corp. to explore the 57,600-acre Nyac gold district about 60 miles east of Bethel, and 300 miles west of Anchorage, company President Jeff Janda said June 10.

Native corporations impressive

"We decided early on to work with the Alaska Native corporations. They seemed to have the best lands, 44 million acres in all," Janda said. "We talked with a number of them, including Doyon (Ltd.) and Bering Straits (Corp.) as well as Calista. We were impressed with them because they really have their act together. But we especially liked Calista. They were easy to work with and their land department is composed of geologists."

Janda said a comprehensive master's thesis on the Nyac District caught the eye of Tonogold geologists in reviewing Calista's portfolio of mining properties.

Historical production in the Nyac District totals more than 500,000 ounces of gold, from 1908 to the present day, but the lode source has never been identified. The current placer operator is Tuluksak Dredging, Ltd.

Prepared by a University of Alaska Fairbanks student for Calista, the report theorized that Nyac's location on four drainages suggested that its plentiful placer gold traveled a short distance, which bodes well for finding the district's lode source.

Another Donlin Creek?

Located on the Tuluksak River in the Kilbuck Mountains within the southwestern extension of the recently recognized Tintina Gold Belt, the Nyac district is about 130 miles from the Donlin Creek gold prospect currently being developed by Placer Dome.

"Calista told us, 'If we're going to find another Donlin Creek, we think it's at Nyac,' " Janda said. "That kind of got us excited, and when we found that Calista was spending (its) own money to explore Nyac, that got us really excited."

Calista geologists have been working at Nyac since the 1980s, "which is one reason Tonogold was so comfortable with us," said Vice President of Lands and Resources June McAtee.

Calista sampled the Wallace gold prospect in 2004, one of the five areas of anomalous gold mineralization at Nyac identified in 1974. It returned rock samples containing up to 7.0 ounces of gold per ton. In total, Placer Dome and Calista spent approximately $700,000 on exploration.

Tonogold said it intends to move early stage exploration forward to advanced exploration status as quickly as possible. The company has earmarked $431,000 for 2005 field work, including mapping the area and taking 4,000 surface geochemical samples to identify drill targets. Tonogold plans to seek an exploration permit to begin drilling next year.

Calista may buy in to Nyac project

Several Calista shareholders are currently training to work on the field team this summer. Janda said he and his colleagues thought the logistics of fieldwork in Alaska this summer would tough, but Calista subsidiary Chiulista Camp Services made it easy.

Tonogold also has three gold and silver projects under way in Nevada.

The Nyac lease includes a buy-in option for Calista to acquire equity in the project at some future date, according to McAtee. The lease also provides for a yearly advance royalty payable to Calista, minimum annual work requirements, a net smelter royalty when in production and an annual $5,000 scholarship contribution to the Calista Scholarship Fund.