Junior traces evidence of new gold camp

Evidence is mounting to support Kaminak Gold Corp.'s suspicion that its Coffee Project located in the White District of Yukon Territory is part of an emerging gold district with sizable gold deposits scattered over the wooded region.

Kaminak reported assay results May 26 from the first two holes drilled this spring that "confirms the potential of the Coffee property to host large gold deposits," according to Kaminak President and CEO, Rob Carpenter.

The holes, drilled in the Supremo zone, returned indications of significant gold mineralization, and ongoing drilling since has yielded assays showing additional signs of gold.

Hole CFD-001 intersected 17.07 grams per metric gold over 15.5 meters from 15 meters core depth and hole CFD-002 ended in mineralization and yielded five significant gold-bearing intersections. They included 3.95 g/t gold over 11.95 meters (starting at 18.7 meters); 4.89 g/t gold over 5 meters (starting at 72 meters); 2.11 g/t gold over 14.0 meters (starting at 124 meters); 4.31 g/t gold over 2.75 meters (starting at 145.25 meters); and 2.96 g/t gold over 4.1 meters (starting at 169.65 meters to end of hole).

Drill holes 1 and 2 were drilled to the east from the same setup and were designed to test the depth extent of high-grade gold-in-rock results obtained by Kaminak in 2009 along the Trench 3 (T3) trend. Hole CFD-001 was drilled at a minus-50 degree angle and hole CFD-002 was drilled at a minus-70 degree angle. Both holes intersected extensively oxidized, limonitic, clay- and silica-altered augen gneiss host rocks displaying complex multi-phase hydrothermal breccia (fragmental) textures in addition to quartz vein stockworks, minor pyrite and rare arsenopyrite.

Hole CFD-001 intercepted a single, thick interval of gold, hosted primarily in silicified breccia units and minor nonbrecciated silica-altered gneiss.

Hole CFD-002, however, ended in mineralization and intersected several zones over a greater length than the hole CFD-001 intercept.

Unlike the single, wide gold-bearing hydrothermal breccia zone in hole CFD-001, mineralization in hole CFD-002 is mainly hosted in broad zones of quartz veining and silica-flooding with restricted breccia zones.

The mineralized intervals from hole CFD-002 were calculated using a 1g/t gold grade envelope.

They are separated by weakly anomalous intervals.

If these intervening low-grade segments are included in the grade/interval calculations, then the hole CFD-002 intercept also can be considered to grade 1.26 g/t gold over 60.32 meters (starting 18 meters from the surface) with a second zone of 1.15 g/t gold over 51.32 meters (starting at a depth of 122.43 meters).

Similar to White Gold deposits

The Supremo zone is located about 20 kilometers, or 12.4 miles, to the south of White Gold's Golden Saddle deposit.

Carpenter told mining analysts, investors and reporters in a teleconference May 27 that the Coffee Project appears to host rocks and trace element signatures similar to those found in the Golden Saddle deposit at Underworld Resources Inc.'s White Gold Project. (Kinross Gold Corp. recently purchased Underworld.)

A little over a year ago, Kaminak optioned the claims where the Coffee Project is located from Dawson City-based Ryanwood Exploration Inc., after owner Shawn Ryan identified several gold anomalies on the property. Ryan also optioned the White Gold claims to Underwood Resources in 2007.

Ryan has said he believes the Coffee claims could host as much or even more gold than the White Gold Project.

Gold in the cores of the two drill holes at Supremo also appear to be uniformly distributed with no visible gold, much like the mineralization in the Golden Saddle deposit, Carpenter said.

"We only have the results of two holes, so it's early days. But if gold districts occur, they occur in more than one camp," he observed.

Just under two weeks later, Kaminak reported encouraging drill results from the first holes completed this season at the Latte zone located about 1 kilometer south of the Supremo zone.

Positive assays from Latte

Latte and Supremo are hosted in separate structural corridors and are both open along trend and to depth.

Kaminak said it drilled seven holes at the Latte zone over a 400-meter length. Highlights of assays from two of the holes include: CFD-006, which intersected 1.08 g/t gold over 83.93 meters (from 28.07 meters core depth); and CFD-007, which intersected 1.12 g/t gold over 55 meters (from 33 meters core length) and a second zone of 1.24 g/t gold over 8 meters (from 101 meters core length).

"Latte represents our second major gold discovery on the Coffee property this spring and confirms that our exploration strategy of drilling underneath high quality gold-in-soil anomalies is working," Carpenter said in a June 7 statement. "Moreover, the Coffee property is host to at least eight such soil trends, and we will continue to methodically drill test each of these targets as well as expand the Supremo and Latte zones along trend and at depth."

A few days later, Kaminak reported assay results from step-out holes drilled on the discovered Latte and Supremo zones.

Highlights of these results include Latte step-out hole CFD-008, which intercepted 51 meters grading 1.32 grams per metric gold starting at 7 meters core depth.

It extends strike length of strongly oxidized mineralization at Latte for an additional 100 meters to the east.

At the Supremo zone, step-out holes extended the strike length of oxidized mineralization for an additional 50 meters to the north with hole CFD-003, which intersected 3.26 g/t gold over 17.35 meters starting at 37 meters core depth and hole CFD-004, yielding 2.47 g/t gold over 20 meters starting at 50 meters core depth.

Drilling is ongoing with samples being processed at the assay laboratory from step-out holes 50 meters to the north at Supremo and initial holes in the Latte zone located 1 kilometer, or five-eighths of 1 mile, south of Supremo. Carpenter said 150 meters of trenching to the south of holes CFD-001 and CFD-002 also came back with more than 2 g/t gold.

"We believe these are very significant results, he said.

More targets to explore

The Supremo and Latte zones are two of eight very large gold anomalies that Kaminak has targeted on the 43-kilometer-, or 27-mile-, long Coffee property. The claims also host peripheral anomalies that have high potential for other gold discoveries, Carpenter said.

Kaminak's drill strategy will continue to focus on discovering near-surface gold mineralization and extending the strike length of high-grade and shallow gold mineralization.

"These first holes show intense alteration and mineralization over wide intervals indicative of a large gold-rich hydrothermal system," he said.

New geological mapping and trenching completed at Supremo in 2010 indicate that mineralization at Trench 3 is hosted in a north-south trending linear structure/alteration zone that extends for at least 200 meters and is open in both directions along trend, as well as to depth. Measurements from oriented core from both holes No. 1 and No. 2 also indicate that gneissic banding is shallowly dipping to the west and that mineralized veins occur at high angle to the gneissic fabric, suggesting "near-vertical" dipping gold zones.

Kaminak said more drilling on this section will be required in order to correlate rock units and mineralized zones from hole No. 1 and No. 2 and also to determine the true width of these zones.

Part of Kaminak's confidence in the assay results stems from the nature of the region's geology. "This part of the world has never been glaciated, which means soil samples are very representative of the bedrock below," Carpenter said. "And despite the discoveries, this is still a very underexplored part of the world."

He also noted that soil samples have been taken from only about 7 percent of the entire Coffee Project.

Drilling, meanwhile, is ongoing on the Coffee claims, including more holes at the Supremo and Latte zones and additional cores from the Double Double. More assay results are pending.