Explorer chases another style of gold

When geologists talk about the exciting gold deposits recently discovered in Canada's Yukon Territory, they use terms like "structurally controlled, intrusion-related" and "Carlin-style." Attentive laymen soon catch on, recognizing that "structural" often characterizes the non-glaciated hydrothermal deposits found in the White Gold district of west-central Yukon and "intrusive" commonly refers to impressive finds in mountainous central Yukon, while some discoveries to the east have been labeled "Carlin-style" because of their geological similarities to deposits in the prolific Carlin gold district of Nevada.

Now Northern Tiger Resources is happily throwing yet another geological term into the mix when referring to its 3Ace deposit in Southeast Yukon.

"We still believe we are exploring an 'orogenic' gold system, which has the potential for being sizable," Northern Tiger President and CEO Greg Hayes told Mining News recently.

An "orogenic" system?

Northern Tiger's geologists say the 3Ace property has the potential to host a world-class orogenic gold deposit similar in its style of mineralization to the Australian Bendigo-Ballarat and Victoria gold field deposits in Australia.

"These can be some of the biggest gold systems in the world, and we're encouraged by that. It's a new deposit type for the Yukon. The big ones are in Russia and Australia," Hayes said.

At the Ballarat and Bendigo gold fields of central Australia, the precious metal was first discovered more than 150 years ago. Subsequent gold rushes and sustained mining until 1918 resulted in historical production reported of 25 million ounces of gold. Armed with modern mining techniques, explorers have returned to the region in recent decades seeking additional commercial deposits.

Other similar historic orogenic gold deposits include those in the Alaska-Juneau district during the Alaska Gold Rush when 282 metric tons of gold resources with an average grade 1.42 grams per metric ton gold mine between 1895 and 1944.

"Although there are differences between each of these deposits and 3Ace, they share the three common structural/host-rock characteristics. All of these deposits are hosted in sandstone-shale (i.e., turbidites) sequences that become competent, brittle rock units; each deposit is located in the vicinity of crustal scale transcurrent strike-slip or transpressional thrust faults; (and) prolonged orogenesis generates large volumes of deep crustal fluids. These are the three main characteristics that we think make 3Ace an orogenic gold system," Northern Tiger chief geologist Chris Buchanan wrote in a recent memo.

Buchanan also drew parallels with other deposits that are closer geographically to 3Ace. He cited deposits such as Donlin Creek in western Alaska and Spanish Mountain in south-central British Columbia as the two known deposits that most closely resemble 3Ace.

The Donlin Gold project is a large, undeveloped, refractory gold deposit in Alaska located about 450 kilometers northwest of Anchorage. It currently has a gold resource of more than 41 million ounces.

The Spanish Mountain gold project, located about 70 kilometers (43 miles) northeast of the city of Williams Lake, B.C., has a gold resource totaling just under 5 million ounces.
"Spanish Mountain is the closest geological match (i.e., sandstone-phyllite succession), but has a smaller resource. Donlin Creek has a massive resource, but has some important geological differences (i.e., host is pre-mineralization felsic dykes)," Buchanan observed. "What ties all of these gold occurrences together are the three characteristics of orogenic gold deposits: competent, brittle host rocks, crustal scale strike slip and/or thrust faults, prolonged orogenesis (i.e., polyphase deformation)."

Exciting discoveries

Northern Tiger optioned the 3Ace property in April 2010 from Alex McMillan, a longstanding Yukon prospector who discovered a quartz vein on the property containing abundant quantities of free gold.

McMillan, who is based in Watson Lake, YT, discovered a quartz vein containing abundant quantities of free gold on the 3Ace property, which encompasses 140 claims covering about 2,593 hectares, or 7,000 acres, in a mountainous area some 25-30 kilometers (16-19 miles) by road from Yukon's border with the Northwest Territories. The 3Ace property, located about 270 kilometers (167.4 miles) north of Watson Lake, is adjacent to an all-weather road that extends another 40 kilometers (25 miles) north-east to the Cantung Tungsten Mine.

It was initially explored by Hudson Bay Exploration in the late 1990s. This work resulted in the delineation of several large anomalies (up to 400 meters by 400 meters) with gold-in-soil values ranging up to 1,300 parts per billion.

Northern Tiger, a spin-out several years ago from Firestone Resources Ltd., mounted a C$2.6 million exploration program in 2010 that resulted in another significant gold discovery at the Main zone on 3Ace.

"Our drilling has demonstrated that gold mineralization in the Main Zone extends across significantly thicker intervals than the meter-wide surface expression of the Discovery Vein, confirming the presence of a much larger-scale mineralized system," Hayes said in November 2010. "These initial drill results compare very favorably with discovery holes reported from other recent Yukon gold finds such as Underworld Resources Inc.'s Golden Saddle Zone and ATAC Resources Ltd.'s Tiger Zone."

The Edmonton, Alberta-based junior also hired a structural geologist in 2010 who specializes in orogenic gold deposits because the quartz vein in which remarkable amounts of visible gold was discovered at 3Ace appeared to be that type of mineralization.

In 2011, Northern Tiger more than doubled its budget for exploration in Southeast Yukon, mounting a C$6 million program that included its first drilling on the 3Ace property. The junior also conducted preliminary drill testing on the adjacent Sprogge Property, which it optioned from Newmont Gold Mining Corp. and Alexco Resource Corp. in late 2010. Together, 3Ace and Sprogge now comprise a total land package to 225 square kilometers (87 square miles).

The primary focus of 2011 drilling at 3Ace was the Main Zone, but three additional targets were tested. The drilling encountered bonanza-grade intercepts and thicker intervals of gold mineralization that Northern Tiger geologists say continue to demonstrate "the robust nature of the mineralizing system at 3Ace."

In December when assay results for all but five of the drill holes had been reported, Hayes said, "We have also observed visible gold in six of the 17 Main Zone holes reported so far this year - an encouraging indicator of the strength of the mineralizing system at 3Ace."

Among key results of the 2011 drilling:

• 3.75 g/t gold over 13.2 meters, including 10.5 g/t gold over 2.4 meters;

• 2.51 g/t gold over 27.2 meters, including 6.80 g/t gold over 9.0 meters;

• 4.61 g/t gold over 35.0 meters, including 106.21 g/t over 1.0 meter;

• 1.25 g/t gold over 30.5 meters, including 3.11 g/t gold over 6.8 meters;

• 3.15 g/t gold over 27.9 meters, including 45.22 g/t gold over 1.3 meters;

• 1.18 g/t gold over 31.7 meters;

•2.58 g/t gold over 53.0 meters, including

17.72 g/t over 2.0 meters;

• 4.37 g/t over 10.0 meters and 70.11 g/t

over 1.1 meters; and

• 1.15 g/t over 23.0 meters, including 6.45 g/t over 1.0 meter.

"The strong results from the first major drill program have confirmed 3Ace as one of the Yukon's significant new gold discoveries," Hayes said in January, after reporting final drill results of the junior's 29-hole program for 2011.

Northern Tiger also conducted a soil geochemistry survey at 3Ace in 2011 that identified a new 1,500-meter by 250-meter gold-in-soil anomaly called the Kaiser Trend and expanded the Green Zone East target to 1,250 meters by 500 meters. The company cited both as being important new exploration targets. In addition, a number of gold-in-soil anomalies have been traced directly to proximal outcrops of quartz pebble conglomerate containing gold-bearing quartz veins.

Prospecting in 2011 also identified nine additional new mineralized occurrences on 3Ace and a new 3-kilometer trend of alteration and sulphide mineralization on the adjacent Sprogge property.

Sprogge is on-trend with the 3Ace Project, and due to its close proximity, was explored in conjunction with 3Ace in 2011. Sprogge contains the 2,400-meter-by-1,200-meter Sugar Bowl Zone, which hosts compelling geochemical targets that the company says warrants drill testing. Rock chip samples taken along a 2.5-kilometer-long ridge contain numerous multi-gram gold values up to a maximum of 34.8 g/t, and including 6.9 g/t gold over 12.0 meters and 9.6 g/t gold over 4.0 meters. The zone has a 1,200-meter-by-600-meter core area that averages more than 200 ppb gold in soils and returned a maximum gold-in-soil value of 10.3 g/t.

Four holes (762 meters) drilled in 2000 by NovaGold encountered considerable hydrothermal alteration, but did not replicate the grades found in the surface exploration. (The historic drill program was hampered by poor weather, however, and was only able to test the lowest elevation targets along the northern boundary of the surface anomaly.) Most of the Sugar Bowl Zone remains to be drill tested, and a number of other geochemical targets warranting follow-up have been identified on the Sprogge property.

New focus on Southeast

Hayes said the area around 3Ace and Sprogge has seen very little exploration by Yukon standards and offers tremendous potential for other discoveries. For example, Aben Resources Ltd.'s 2011 discovery of gold on the Justin Property which lies immediately to the south of Sprogge in 2011adds to Northern Tiger's confidence in the region.

In November, Aben reported a new greenfield gold discovery, including a drill hole intercept covering 60 meters of 1.19 g/t gold in the never-before drill tested POW Zone, starting at a vertical depth of 113 meters. The explorer also reported in January a new high-grade silver and copper discovery in the Kangas Zone located 1.4 kilometers (about 1 mile) south of the POW Zone.

For 2012, Aben is planning 4,000 meters of diamond drilling, beginning in June, in 15-20 holes at Justin that will focus on follow-up and expansion work around the newly discovered POW and Kangas zones. The exploration program also will include additional geophysical and geochemical surveys as well as geological mapping.

At 3Ace, Northern Tiger was plagued by a persistent backlog in lab analysis of core and survey samples throughout 2011. Still, the junior came away with assay results by year's end that it found so compelling that it designated 3Ace as its new flagship project.

"We are eagerly anticipating the upcoming 2012 exploration season to both expand the Main Zone mineralization, and to further evaluate the kilometers of gold-in-soil anomalies that remain to be drill tested," Hayes aid

Meanwhile, Northern Tiger shelved plans for 2012 exploration at its promising Sonora Gulch porphyry gold-copper-molybdenum project in central Yukon to focus exclusively on 3Ace and Sprogge.

Hayes attributes the move to the effects of a recent cooling in investor enthusiasm for gold exploration projects.

The flagging market also forced the junior to scale back its exploration plans for 3Ace and Sprogge this year.

"We're a little challenged by the market conditions," said Hayes. "The analysts love the (3Ace) project. It's just difficult to get any traction in the market right now."

Northern Tiger is planning a two-phase exploration program in 2012, with a 3,000-meter first phase, commencing June 1 with four diamond drill holes on Sprogge and 11 holes on 3Ace, including eight holes on the Main Zone and three holes on the Green Zone East.

The junior is employing 25-30 people in its field camp.

In July, the junior hopes to mount a second phase of exploration with a 5,000-meter reverse circulation drill program on Main Zone West and the Kaiser Zone.

"We could easily do 20,000 meters this year, if we could raise the money," Hayes said. "If the risk appetite comes back to the market, we could expand our program."

Hayes also said he is cautiously optimistic that the assay labs will be "a little more timely" this year in returning drill results. "They tell us that they've resolved the problems that they experienced with labor and machinery last year by giving backend bonuses to their employees in Whitehorse and adding staff in Vancouver," he said. "We also expect the (pace of) soil sampling to drop off a bit this year, which should help."

Looking ahead, Hayes said the challenge now facing the junior is to prove that the 3Ace and Sprogge land package hosts a large gold system, in preparation for an initial resource estimate on the Main Zone at 3Ace in 2013.

"We have to demonstrate that the size potential is there. We have a lot of evidence with soils and rock sampling, but until we drill it and prove it with the drill we have work to do. That's our challenge and goal, to prove it is a big system," he added.