Junior refines new White Gold discovery

Splayed across several steep slopes that plunge into the Yukon River some 78 kilometers (48.4 miles) south of Dawson City in Yukon Territory, the early-stage QV Project is beginning to answer some geological questions that surfaced at least four years ago. That's when Underworld Resources Inc. captured international attention with the discovery of the Golden Saddle gold deposit on its White Gold Project nearby and touched off a modern-day gold rush to the Yukon.

Underworld since has been acquired by Kinross Gold Corp., and the Golden Saddle deposit defined with measured and indicated resources of 1.005 million ounces grading 3.19 grams-per-metric-ton gold and inferred resources of 578,000 oz gold.

Across the Yukon River 10 kilometers (six miles) to the north, Comstock Metals Ltd. is continuing to explore the QV (quartz vein) project where it reported discovery in 2012 of significant mineralization in the VG (visible gold) Zone.

Meanwhile, investor interest in the so-called "White Gold District" has waned along with investment in the entire junior mining sector as capital markets have tightened in recent years. But Comstock's enthusiasm for its QV Project remains undaunted as the company completes a second exploration season on the property.

Results of both 2012 and 2013 exploration confirm a potential bulk-tonnage target at the QV project, which is contiguous to the system that hosts the Golden Saddle deposit. Comstock believes the VG zone, where it has confirmed a 3.25-square-kilometer (1.26-square-mile) soil anomaly, is emerging as one of the largest individual gold-systems in the White Gold district.

"The presence of parallel and mineralized structures at the VG zone, including the VG zone (Telegraph Fault), Adit Fault, and VG North Fault together with the Shadow and Stewart zones would suggest that the QV Project hosts one of the larger gold mineralized systems in the White Gold District of Yukon," Comstock President and CEO Rasool Mohammad said in a Nov. 7 statement. "Our work in 2013 significantly expanded the potential of this project, not only at the VG zone but also at the multiple gold targets that have been developed over the past six months. Compilation of our 2013 exploration results is well underway, and we look forward to a follow-up exploration program in 2014."

More White Gold discoveries

The QV claims (14,180 hectares or 35,000 acres) were optioned from Yukon prospector Shawn Ryan in June 2010, and all exploration expenditures under the option agreement have been completed, with one remaining payment, due June 22, 2014, to acquire a 100 percent interest in the QV Property.

Ryan was instrumental in the discovery of the Golden Saddle deposit.

But it is the QV project that saw exploration activity during the capital drought of 2013, while no activity was apparent downriver at Golden Saddle.

Comstock spent about C$1.8 million on diamond drilling, geological mapping, rock and soil geochemical sampling, ground magnetometer surveys and prospecting in its 2013 exploration program at the QV project.

In what was initially intended to be a phase 1 drill program but ended up being the company's only drilling in 2013, Comstock completed nine core holes at QV totaling 2,188 meters on the VG zone. The drilling included one significant step-out drill hole 650 meters along strike. Highlights returned from the first four core drill-holes (QV13-009 to QV13-012) included 2.06 g/t gold over 36.40 meters from 8.6 meters depth (QV13-012).

Comstock discovered the VG zone in 2012 through systematic soil-sampling and trenching followed by diamond drilling. Seven out of eight diamond-drill holes intersected near-surface gold mineralization, and hole QV12-004 drilled 2.34 g/t gold over 89.85 meters starting at 43.75 meters, including 3.04 g/t gold over 45.5 meters.

The 2012 drilling program at QV consisted of eight core holes totaling 1,334 meters. The drill program was designed to test strong gold enrichment discovered in trenches at the VG Zone, including 3.31 g/t gold over a 95 meters sample length from trench QVTR12-06 and 3.77 g/t gold over 45 m in QVTR12-15.

Work at the VG zone brings to 3,422 meters in 17 holes total diamond drilling completed at the QV project, substantially expanding the VG zone's footprint to 350 meters by 350 meters and 250 meters deep. The zone remains open in all directions.

Gold mineralization in the VG zone is hosted within units of massive, silicified gneiss cut by swarms of quartz vein stockworks and breccia, with disseminated and vein controlled pyrite and occasionally visible gold.

Comstock's mapping and prospecting programs also focused on parallel structures and mineralization to the Telegraph Fault, which hosts the VG zone. The company completed sampling on the VG North structure located 1,200 meters north of the VG zone, the Adit Fault, 450 meters south of the VG zone, and the Shadow zone located 14 kilometers (8.7 miles) north of the VG zone, along with the VG zone. Gold mineralization with similar grades and geological setting to the VG zone (Telegraph Fault) was confirmed in these structures.

Mapping completed on the Adit Fault shows the host to be biotite schist with sericite alteration and quartz veining associated with an east-west trending vertical fault (Adit Fault) and low angle shears dipping about 30 degrees to the north-northeast.

Channel samples reported Aug. 1 include a 4.67 g/t gold grab sample yielded 2.90 g/t gold over a 0.50 meters-wide quartz vein, 0.083 g/t gold over 1.00 meters below the quartz vein, and 0.676 g/t gold over 0.50 meters above the quartz vein. Two grab samples collected seven meters from the channel samples along the vein structure returned 5.61 g/t gold and 3.31 g/t gold.

Comstock Vice President of Exploration Duncan McBean, P.Geo, said the samples were taken from the same location.

"A grab sample taken from a quartz vein in June returned 4+ grams. We returned in August to take a channel sample, which is more representative and sample the host rock for mineralization. The channel samples returned 2.90 g/t gold over a 0.50 m-wide quartz vein, 0.083 g/t gold over 1.00 meter footwall side, wall rock and 0.676 g/t Au over 0.50 meters hangingwall side of vein, wall rock," he explained.

"These are good results with anomalous gold into the host rock disseminated and not just a high-grade narrow vein sample," he added.

McBean said the historic adit located at the Adit Fault that goes in about three to four meters along the river offers good exposures in the cliff face of a structure that is parallel to the VG zone, which is obscured by dense overburden farther upslope.

"To me, (the Adit Fault) is good surface proof of the VG zone's parallel system to surface. That will be a drill target for 2014," he explained.

Comstock had planned to mount a five-hole, phase 2 diamond drill program on the VG zone later in the field season, but given the poor reception juniors received in the capital markets in 2013, the company opted to hang onto to its "limited resources" and work to carry out a bigger drill program in 2014, McBean said.

"The idea will be to raise more money and do more extensive drilling," he told Mining News.

Geology fits Tintina setting

The QV property is situated in the Tintina Gold Belt, a highly prospective cluster of gold mines, prospects and developments stretching from southwestern Alaska into southern Yukon. Since 1985 exploration companies have discovered more than 160 million ounces of gold in this boomerang-shaped region that stretches from northern British Columbia through southern and central Yukon Territory to southwestern Alaska. The White Gold District is perhaps the latest hotspot in the Tintina belt since discovery of Golden Saddle.

The QV property is underlain by units of highly deformed Late Paleozoic schist and gneiss, derived by the metamorphism of volcanic and sedimentary strata, and cut by stocks and sills of Mesozoic and Tertiary-aged intrusive rocks. The gneiss units of volcanic origin (metavolcanics) are important host to mineralization, and the same units that host Golden Saddle can be traced north to QV.

Faults are an important feature in the district as the Tintina Gold Belt is demarked by long-lived, deep crustal structures of all scales and types. At QV, Comstock Metals has recognized sets of east- to northeast-trending, shallowly north-dipping faults that display strong shearing and fracturing of the metavolcanic gneisses that are the focus of gold mineralization and alteration.

At the VG zone, a wide band of felsic (quartz-feldspar) gneiss is the preferred host. The full extent of this unit is not known, however narrow bands of mafic gneiss (biotite-hornblende-quartz-feldspar) occur in the eastern portion of the zone where it has returned lower grades and narrower mineralized intercepts. Recent drilling (hole QV2013-13) has re-established both the felsic gneiss and the zone of mineralization east of this band, leaving the target room for continued expansion.

Gold mineralization at the VG zone is hosted in a unit of massive grey and white quartz and siliceous breccia that lies underneath the east-trending fault. Pyrite occurs as disseminated crystals, sometimes as fine-grained micro-veins, often with traces of molybdenite. Gold grains have been noted in a number of core samples, but is usually too fine-grained to be seen unaided, and the presence of gold can only be reliably determined by fire assay. Strong potassic feldspar alteration and sericite is common beneath the quartz, rarely as lenses within it. Deeper in the system strong alteration is seen in zones of fracturing and veining marked by hematite, albite and quartz.

The predictable nature of the controlling fault structures, the spectacular quartz veining and brecciation, plus the intensity of alteration at the VG zone, coupled with its strong zonation, has allowed Comstock geologists to rapidly understand the mineralizing controls at the zone, and to apply this knowledge to expansion drilling elsewhere on the property.

Though the VG zone is similar in style and geology to the Golden Saddle deposit, Comstock points to significant differences. The VG zone has up to 50- meter-thick zones of quartz-sericite altered gneiss and prophyry dyke, and zones of massive silification and breccia that contain traces of pyrite, sometimes with visible gold; VG mineralization dips at a shallow angle (30 degrees) beneath a low-rising hill; and it's early days with only 17 holes drilled at the VG zone, compared with 208 holes (54,733 meters) completed at Golden Saddle.

By contrast, gold mineralization at Golden Saddle is preferentially hosted within metamorphosed felsic intrusive units, as well as felsic and mafic metavolcanic rocks, and is associated with quartz veins, stockworks and breccia zones, as well as pyrite disseminations that form northeast-striking and moderately northwest-dipping (plus/minus-50-degree) tabular bodies of gold mineralization.

Other QV targets

Elsewhere on the QV property, Comstock advanced other targets in 2013, including the Stewart and Shadow targets.

"Near the VG (zone), we have detected two new targets - one 2,000 meters north and another 600 meters south. Both are returning encouraging results. The VG zone structure itself has been traced over 700 meters to the west and at least 1,000 meters east. Other new targets, such as the Shadow Zone and Stewart Grid, have been found well east of the VG zone. Limited trenching has returned anomalous gold and pathfinder geochemistry, additional mapping, trenching, and IP surveying required before drilling," McBean said.

Unlike the VG zone, the Stewart and Shadow targets are suggestive of an intrusion-associated mineralized system, according to McBean.

"We're looking for east-west structures offsetting north-south structures," he explained.

Significant gold-in-soil and gold-in-rock anomalies have been defined. Ongoing exploration is focused on preparing these targets for drill testing.

The Stewart Grid, located seven kilometers (4.34 miles) to the northeast of the VG zone, is a large soil anomaly where limited trenching yielded weak mineralization. Drill ready targets identified.

Comstock conducted an induced polarization survey at Stewart along with a small amount of mapping and soil sampling, and drill-ready targets have been identified.

On the Shadow Zone, located 12 kilometers (7.4 miles) north of the VG zone, two structures have been interpreted from magnetic data and surface mapping. Through soil and rock sampling, Comstock expanded a known soil anomaly to an area 2,500 meters by 1,400 meters as defined by values ranging from greater than 10 parts-per-billion gold up to 514 ppb gold. Trench sampling in 2012 returned 88 meters of 0.33 g/t gold (as reported Dec.11, 2012). The highest rock grab sample result from 2013 returned 1.51 g/t gold. The mineralization at the Shadow Zone is hosted in felsic intrusive and augen gniess rocks. The zone and structures display similar characteristics to the VG Zone.

But the VG zone, by comparison, is located within an east-west soil anomaly that measures 3,500 meters by 4,000 meters and includes additional targets along structure yet to be tested, including one about 600 meters farther to the east, according to McBean.

He said the QV property also appears to host a large granite intrusive body and both the Shadow and Stewart zones seem to be situated along the intrusive body, which disrupts a system of gold mineralization.

The QV property also has maiden targets over multiple parallel structures that suggest potential for added discoveries.

"Working closely with our Yukon-based consultants, we are continuing to recognize new targets at QV through the use of both conventional and innovative technologies and techniques," McBean said.

Comstock is exploring a number of other soil anomalies and areas of interest on the QV property, including the Tetra target and the Eastern and Western extensions.

Airborne magnetic surveys define VG Zone-style breaks, which are covered by soil sampling surveys. If the soil samples show elevated levels of "pathfinder elements" such as antimony, molybdenum, mercury, silver and arsenic then the anomalous sites are either trenched using a Can-Dig mini-back hoe (manufactured for farmers) or tested with a lightweight pneumatic sampling drill called a Geoprobe. Samples of bedrock are collected for assay, but initially they are analyzed by a semi-quantitative XRF technique. If these rock samples are anomalous then the sampling is tightened-up until a mineralized structure is found.

While the Geoprobe technique is "versatile and relatively inexpensive," McBean said he, "personally, still prefers trenching because it helps a geologist to actually see the structure.

We haven't done any trenching in 2013, but now we have some follow-up spots from 2013 work where I'm recommending we go in and trench next season," he added.

At the same time, an airborne photographic topography survey is flown using a drone aircraft or high-definition induced polarization geophysical surveys are done.

The junior also benefits from the depth of Tintina Gold Belt/White Gold district experience of its technical advisors and consultants, which include Shawn Ryan, former Underworld Resources President and CEO Adrian Fleming, former Underworld Resources vice president of exploration Rob McLeod, who is current vice president of exploration at Full Metals Minerals and Revolution Resources and CEO. McLeod is credited with identifying the potential of the White Gold Property and leading the discovery team for the Golden Saddle Zone.

Other Yukon properties

While the outlook for the QV project is particularly promising, Comstock also invested some energy in exploring other Yukon properties in 2013.

One parcel is the Kermode Property, a claim block located about 12 kilometers (7.4 miles) due south of QV and Golden Saddle and west-northwest of Thistle Creek.

"We did a bit of soil sampling in May and got a soil anomaly," McBean said.

Comstock also mounted a 2013 work program on its Walhalla Project located roughly 50 kilometers (31 miles) to the southeast of QV. In 2012, the junior optioned from Seafield Explorations Ltd. a 75 percent interest in Seafield's joint venture with Volcanic Minerals Ltd. for the exploration and development of the Walhalla Property, named for a placer creek that intersects the better-known Scrogge Creek on the property.

Walhalla, also located in the White Gold district immediately east of and contiguous with Pacific Ridge Exploration Ltd.'s Mariposa Project, consists of 1,988 quartz claims covering about 41,800 hectares (103,288 acres) some 120 kilometers (75 miles) southeast of Dawson City.

The Walhalla project is considered prospective for discovery of several types of mineralization, with gold the primary commodity of interest.

Previous work on the property identified strong anomalous gold zones in soils as well as anomalous pathfinder elements such as arsenic and barium.

About 1,014 ridge-and-spur samples were taken in the western, north-eastern, and south-eastern parts of the property, and significant gold-in-soil anomalies were identified in all areas.

Of particular interest, a 3.41 g/t gold-in-soil anomaly in ridge-and-spur sampling that was followed up by 366 grid soil samples that returned a value of 6.26 g/t gold - one of the top 10 samples taken historically in the entire White Gold district.

Comstock's 2013 work program on the Walhalla project included rock and soil sampling. Soil geochemistry at Walhalla returned values ranging up to 17 ppb gold, 306 parts-per-million copper, and 1,687 ppm nickel, while Rock geochemistry results have returned gold values ranging up to 294 ppb gold, 121 ppm copper, and 451 ppm nickel.

"Walhalla has a nice soil anomaly," McBean said. "We did a regional probe, rock sampling and more regional soil sampling. The results are worth following up on."

Comstock said it will plan additional grid-soil sampling and trenching for the 2014 work season.