The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Kiska finds new buyer for Whistler, focuses on larger copper-gold portfolio
Less than three months after a pending sale of its Whistler property in Southcentral Alaska fell through, Kiska Metals Corp. has found a new buyer for the advanced-stage copper-gold exploration project.
Under a binding agreement announced last week, Brazil Resources Inc. will issue Kiska 3.5 million shares in exchange for full ownership of Whistler, including the mining claims and other assets belonging to the project.
Brazil Resources' shares were trading at C46 cents per share on the Toronto Venture Exchange on July 21, making the deal worth roughly C$1.61 million at the signing of the agreement.
"This transaction greatly increases the company's flexibility going forward," said Kiska President Grant Ewing. "Kiska will no longer incur any holding or exploration costs, and it retains excellent carried participation in the future upside of the Whistler Project and other projects through its shareholding in BRI."
With the Whistler property and associated costs shifted out of its portfolio, the prospect generator can now focus more attention on its primary strategy of securing and fostering partnerships for the numerous other copper and gold projects it has generated, including its Copper Joe project in Alaska and Kliyul porphyry project in north-central British Columbia.
"Kiska continues to execute the prospect generator business model by having top-tier mining companies drill and explore our projects this season, such as Kliyul and Copper Joe," said Ewing.
Re-examining Whistler
The Whistler property blankets roughly 65 square miles of gold-copper prospective lands in the Kahiltna Terrane region of Southcentral Alaska.
This large land package is anchored by its namesake deposit, which hosts 79.2 million metric tons of indicated resource grading 0.51 grams per metric ton gold, 1.97 g/t silver and 0.17 percent copper; and 145.8 million metric tons of inferred resource averaging 0.40 g/t gold, 1.75 g/t silver and 0.15 percent copper.
Brazil Resources is considering this resource for Whistler as historical until an independent qualified person re-examines the parameters of the work used to calculate the 2011 resource and issues a new estimate for the Whistler deposit that reflects current metal prices.
Roughly 20 other prospects and deposits have been identified across the wider Whistler property, including those found at Whistler orbit, Island Mountain and Muddy Creek.
The Whistler orbit is a roughly 20-square-mile region that encompasses the Whistler deposit as well as the Raintree and Rainmaker discoveries.
While the Whistler deposit outcrops on a ridge, the other prospects in the Whistler orbit are largely covered with a 10- to 15-meter layer of glacial till in the valley below.
Like all of the blind prospects in the orbit, Raintree West, located some 1,800 meters east of the Whistler deposit, was first identified with airborne geophysics. One hole drilled here in 2009 cut two zones of mineralization - 128.7 meters of 0.56 g/t gold and 0.16 percent copper from a depth of 59 meters; and 40 meters of 0.98 g/t gold and 0.21 percent copper from 429 meters.
Drilling at Raintree North, Raintree South and Rainmaker has identified porphyry copper-gold mineralization similar to Raintree West.
Island Mountain, located about 14 miles south of the Whistler deposit, was discovered by Kiska in 2009.
IM-09-001, the discovery hole at Island Mountain, cut two distinct mineralized zones - a 150-meter upper zone that averaged 0.72 g/t gold, 2.37 g/t silver and 0.16 percent copper; and a 107-meter lower zone that averaged 1.22 g/t gold, 0.69 g/t silver and 0.05 percent copper.
Muddy Creek, a gold target about six miles northwest of Island Mountain, is a promising intrusion-related gold target. The potential of this prospect is underscored by the 4.72 g/t gold average grade of 150 rock samples collected over a four-square-mile area.
Beyond the multiple deposits and prospects that the property has to offer, Whistler comes with a number of physical assets and upgrades that will make future exploration easier and less expensive.
In 2011, Kiska completed the construction of a 50-person camp and a gravel airstrip capable of landing a Boeing DC-3 aircraft near the Whistler orbit area of the property.
A four-mile gravel road connects the camp and airstrip to the Whistler deposit.
In addition to living quarters, the camp comes with a generator; wireless satellite phone and internet system; wireless cell phone service; water well; septic system; two core logging facilities; core cutting facility; core storage area; and a large maintenance garage.
Despite getting a good deal on a relatively advanced copper project in Alaska, Brazil Resources is not shifting the focus its name implies.
"The company is dedicated first and foremost to our high-potential gold development projects in Brazil," explained Brazil Resources CEO Garnet Dawson. "However, with the Whistler Project, at a cost of just 4.5 percent dilution, we have an agreement to acquire another project with a historic multi-million ounce resource, large expansion potential, relatively low holding cost and the support of Kiska's superior technical team, which is also in joint ventures with First Quantum Minerals Ltd. and Teck Resources Ltd."
Upon finalization of the deal, Brazil Resources has agreed to pay Kiska C$10,000 a month to provide support and maintenance services for the Whistler project for 15 months.
Copper Joe drilling considered
Though Kiska has sold Whistler, the project generator is not done exploring the Kahiltna Terrane region of Southwest Alaska where the property is located.
First Quantum Minerals Ltd., a global mining company with a particular focus on copper, is funding exploration of Copper Joe, a copper-gold-molybdenum porphyry project situated roughly 20 miles southwest of Whistler.
The 55 state mining claims that make up the Copper Joe property blanket a large alteration system that shows all the indicators a potentially copper-bearing porphyry system lies in wait.
A core zone of this alteration and associated porphyry quartz-magnetite veins are sporadically exposed at surface along a 1,400-meter (nearly a mile) long segment of Frost Creek.
While grab samples collected along the Frost Creek showing have only returned weakly anomalous gold and copper mineralization, it is believed the veins found there are the top of the porphyry system and the core zone lies somewhere below.
Kiska and First Quantum believe that a nearby 450-meter-diameter intense magnetic high anomaly could be where this core zone is hiding.
"A central portion of the magnetic anomaly is coincident with a resistivity high that may represent strong potassic alteration or a high concentration of quartz-magnetite veining that together define a very compelling drill target," Kiska explained in a January summary of the property.
Under an option agreement signed in 2014, First Quantum can earn an initial 51 percent interest by investing US$5 million at Copper Joe by the end of 2017, a stake that would increase to 80 percent if the copper miner decided to build a mine there.
After signing the deal last August, First Quantum drilled two holes at Copper Joe late in 2014. While this initial program did not return significant copper and gold assay results, the confirmation of a strong porphyry-hydrothermal system was enough to pique the interest of the global miner.
To hone in on areas to conduct a follow-up drill program, First Quantum invested US$826,000 on an early 2015 program that included geological mapping and a magnetotelluric geophysical survey at Copper Joe.
Teck plans Kliyul drilling
Drilling is also being planned for Kliyul, a copper-gold porphyry project located 42 miles (67 kilometers) southeast of the past-producing Kemess Mine in northern British Columbia.
Teck Resources Ltd., which can earn a 51 percent interest in in this property by investing C$5.5 million in it by Jan. 31, 2018, is planning to drill two or three holes to test the main Kliyul zone.
There have been 21 holes drilled at Kliyul, mostly shallow holes completed in the 1990s. One such hole is reported to have cut a 76.4-meter intercept averaging 1.16 g/t gold and 0.33 percent copper. The assay certificates for this hole, however, are not available for confirmation.
One hole drilled at Kliyul zone in 2006 cut 217.8 meters averaging 0.23 percent copper and 0.52 g/t gold.
In addition to test the Kliyul zone with its own drilling, Teck's 2015 exploration program will include roughly 20 line-kilometers of induced polarization geophysics over other geological and geochemical targets on the property.
Prior to the 2015 program, Teck has invested roughly C$765,000 on Kliyul exploration.
Opportunities available
In addition to the partnered projects, Kiska Metals has nine other early stage exploration properties available for option, including five copper and gold properties located in northern and central B.C .; a high-grade gold prospect in Interior Alaska; a gold prospect along the Battle Mountain-Eureka trend in Nevada; a high-grade gold prospect located in Ontario's Abitibi Greenstone belt; and a copper-gold property in Australia.
To help generate additional properties for its portfolio, Kiska announced it has entered into an alliance with BW Mining to generate Neural Network targets to carry out innovative exploration in Quesnel porphyry belt in B. C. and the Abitibi gold belt in Ontario and Quebec.
Neural Networks integrates numerous exploration datasets - geology, geochemistry, geophysics, satellite - to produce unbiased targets based on the signatures of known deposits.
Kiska says this method is significantly leveraging public and private geoscience data and dollars, quickly and efficiently reducing the exploration search space, and targeting in areas with challenging overburden cover.
Kiska also has entered into an alliance agreement with Fathom Geophysics for the exclusive rights to a proprietary method for evaluating and targeting porphyry systems in three dimensions based on trace element abundances and zonation in surface rock samples and/or drill core.
The prospect generator is looking for partners interested in testing these methods.
"In these challenging market conditions, Kiska stands out by incorporating innovative exploration alliances and new targeting technologies that aim to improve the odds of discovery, optimize exploration expenditures, and generate quality exploration opportunities to feed the industry's diminishing pipeline, all while continuing to reduce the company's burn rate," added Ewing.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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