Coffee resource pegged at 3.24M oz gold

Kaminak Gold Corp. Dec. 13 reported a maiden NI 43-101-compliant inferred mineral resource estimate for its Coffee Gold Project in west-central Yukon Territory of 3.236 million ounces of gold contained in 64 million metric tons, grading 1.56 grams per metric ton gold.

The long-awaited calculation follows several seasons of intensive exploration at the 60,704-hectare (150,000 acres) property ignited in 2010 by a modern gold rush to an area now known as the White Gold district of the Yukon. Kaminak was the second company to report the discovery of significant gold mineralization, after Underworld Resources Inc.'s 2009 discovery of the Golden Saddle deposit. Underworld since has been acquired by Kinross Gold Corp.

The majority of the new resource for Coffee is comprised of mineralization in the Latte, Supremo, and Double Double deposits, which occur within close proximity of each other over an area measuring about two kilometers by two kilometers (1.24 miles by 1.24 miles).

Since 2010 Kaminak has drilled 16 gold discoveries at Coffee, but only four deposits are included in the first-ever resource calculated for the 60,704-hectare (150,000 acres) property. The resource estimate also encompasses the Kona deposit which lies some 2.5 kilometers (1.5 miles) west of Latte.

The resource estimate is derived from 659 diamond core and reverse circulation drill holes drilled from 2010 to 2012 for a total of 130,000 meters.

Prepared by Robert Sim, P.Geo, of SIM Geological Inc., the resource estimate is divided into subsets based on different types of gold mineralization. Sim is an Independent Qualified Person as defined by Canadian securities law.

Shallow oxide ore comprises about 46 percent of the resource, with 28.078 million metric tons grading 1.64 g/t (1.481 million ounces) at a base case cut-off of 0.5 g/t gold for oxide ore, while transitional material occurring below the oxide ore totaled about 44 percent of the resource at 31.313 million metric tons grading 1.41 g/t (1.418 million ounces) gold, also at a 0.5 g/t cut-off. The remaining 5.03 million metric tons of the resource is still deeper sulphide ore grading 2.08 g/t (337,000 ounces) gold at a 1 g/t cut-off.

The Coffee resource estimate, at a 0.5 g/t gold cut off, breaks down by deposit as follows:

Supremo hosts 1.027 million ounces of gold contained in 19.86 million metric tons oxide ore, grading 1.61 g/t gold, 704,000 ounces gold contained in 16.54 million metric tons grading 1.32 g/t gold in transitional material and 76,000 ounces gold in 1.66 million metric tons sulphide ore grading 1.43 g/t gold;

Latte has 288,000 ounces of gold contained in 6.66 million metric tons oxide ore, grading 1.48 g/t gold, 537,000 ounces gold contained in 11.33 million metric tons grading 1.48 g/t gold in transitional material and 326,000 ounces gold in 6.89 million metric tons sulphide ore grading 1.47 g/t gold;

Double Double has 120,000 ounces of gold contained in 1.18 million metric tons oxide ore, grading 3.16 g/t gold, 120,000 ounces gold contained in 1.96 million metric tons grading 1.90 g/t gold in transitional material and 16,000 ounces gold in 311,000 metric tons sulphide ore grading 1.55 g/t gold; and,

Kona has 47,000 ounces of gold in 989,000 metric tons oxide ore, grading 1.48 g/t gold, 57,000 ounces gold contained in 1.473 million metric tons grading 1.20 g/t gold in transitional material and 21,000 ounces gold in 605,000 metric tons sulphide ore grading 1.06 g/t gold.

At an increased cut-off grade of 1 percent gold, the Coffee project's inferred resource totals 36.52 million metric tons, grading 2.21 g/t gold containing 2.6 million ounces gold. Of that amount, 15.55 million metric tons is oxide ore grading 2.39 g/t gold for 1.19 million ounces gold, while 15.94 million metric tons is transitional material grading 2.08 g/t gold for 1.065 million ounces gold. The remaining 5.03 million metric tons sulphide ore grading 2.08 g/t gold for 337,000 ounces.

'Major milestone'

"This resource estimate represents a major milestone for Kaminak and highlights the deposit quality and ongoing exploration potential of the Coffee Gold Project," said Kaminak President and CEO Rob Carpenter in a Dec. 13 statement. "At a discovery cost of approximately C$15 per ounce gold, we have advanced Coffee from initial discovery to a +3-million-ounce inferred resource in a little more than 2.5 years. The drilling strike rate and continuity of the mineralized structures at shallow depths show that our strategy and targeting technique, that is drilling gold-in-soil anomalies, is highly effective in this geological terrain."

Investors greeted news of Kaminak's maiden resource estimate for Coffee with enthusiasm, briefly boosting the junior's share price on the TSX Venture Exchange by C42 cents to C$1.43 after a sustained decline in recent weeks. Kaminak shares closed Dec. 19 at C$1.31, down 4 cents.

Kaminak said its drill strategy from 2010-2012 has been primarily to target near-surface gold mineralization to about 200 meters below surface, thus the maiden inferred mineral resource estimate is comprised of some 90 percent oxide and transitional mineralization. About 55 percent of the oxide and transitional resource occurs within 100 meters below surface, and 87 percent occurs from 0-150 meters below surface. The junior defines transitional mineralization as material with 95 percent oxide and 5 percent sulphide ore.

Other key characteristics of the project:

All zones begin at surface and are open in all directions;

•High-grade and extensive oxide mineralization present in all zones;

•Consistent, repeatable assay results (no nugget effect);

•Gold evenly distributed within mineralized zones;

•Structurally late gold mineralizing event; and,

•Gold hosted in multiple structural trends.

Lack of glaciation over the Coffee property also has allowed in-situ soil-sampling to be employed as a highly effective and low-cost exploration tool. Currently, Kaminak has identified more than 20 kilometers of untested soil anomalies at Coffee that warrant drilling, and only 15 percent of the property has yet to be grid soil sampled.

Encouraging metallurgy

Previously completed metallurgical analyses comprised 72-hour bottle-roll cyanidation, carbon-in-leach and carbon-in-pulp test work on oxide samples from Supremo and Latte, which returned gold recoveries ranging from 96.3-98.5 percent. Remaining diamond core corresponding to these two samples was then composited and crushed to 0.5" for simulated heap leaching via column leach test work, which returned 90.4 percent recovery over 80 days and included 83.2 percent recovery over the first 15 days of leaching.

Three additional samples were submitted to Inspectorate Exploration & Mining Services Ltd. in October for cyanide leach test work, including 72-hour bottle-roll cyanidation, CIL and CIP to the same parameters as the previous tests.

Samples were selected from Double Double, Supremo and Latte. The Double Double sample, which returned gold recoveries of 96.0-96.9 percent were taken from drill core at depths of 30-100 meters below surface comprising 95 percent or greater oxidized material.

The Supremo sample which returned gold recoveries of 90.7-92.4 percent was taken from drill core intercepts in the T3 mineralized structure from depths of approximately 180-200 meters below surface and contains 5-10 percent sulphide material; therefore, it is classified as deep oxide / transitional.

The Latte sample, which demonstrated poor gold recoveries from sulphide material, was taken from drill core at a depth of greater than 300 meters below surface. Due to the poor gold recovery, the sample is currently undergoing diagnostic leach test work to determine the mineralogical association of gold. Given that the Latte sample was taken from a single drill hole, work is also underway to provide an indication of whether the style of mineralization sampled is limited spatially or is typical of sulphide mineralization at Coffee. Further test work will then be determined to assess possible processing options for gold recovery from this type of mineralization.

More drilling, studies in 2013

Kaminak said it currently has C$16 million in cash and no debt and is fully funded for its planned 2013 exploration program. Based on the surface footprints of currently known gold-in-soil anomalies, Kaminak's geologists said the property has considerable expansion potential along strike from the current resource and elsewhere.

"We are preparing to continue with our aggressive pace of exploration in March 2013 and, given that the initial column leach metallurgical results suggest that the oxide mineralization may be amenable to heap leach processing, plans are also being made to undertake a comprehensive metallurgical testing program and commence preliminary economic studies in 2013," Carpenter said.

Images of the block model at various cut-off grades are available on the Kaminak website at http://www.kaminak.com.