The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - January 5, 2024
Vinasale lies about 16 miles south of McGrath, a town that has served as a hub for gold mining in the region since 1904.
Discovery Alaska Ltd. Jan. 5 announced it has secured a 15-year lease on the 2-million-ounce Vinasale gold project in Alaska.
Located about 16 miles south of the Southwest Alaska mining town of McGrath, Vinasale is a roughly 6,500-acre project owned by Doyon Ltd., the Alaska Native Claims Settlement Act (ANCSA) regional corporation for the state's Interior.
Previously explored by Freegold Ventures Ltd., Vinasale has lain dormant since that company focused its efforts on the roughly 20-million-oz Golden Summit project about 20 miles north of Fairbanks.
A calculation completed for the Central Zone deposit at Vinasale in 2013 outlined 3.41 million metric tons of indicated resource averaging 1.48 grams per metric ton gold (162,000 oz) gold and 53.25 million metric tons of inferred resource averaging 1.8 g/t (1.8 million oz) gold, at a cut-off grade of 0.5 g/t gold.
At a 1 g/t cut-off grade, this deposit hosts 2.29 million metric tons of historical indicated resource averaging 1.48 g/t (135,000 oz) gold and 22 million metric tons of inferred resource averaging 1.53 g/t (1.08 million oz) gold.
Over the near decade since Freegold relinquished its lease on Vinasale, the price of gold has risen from roughly $1,150/oz in 2015 to today's price of around $2,000/oz.
With the strong gold market, Discovery has cut a lease agreement with Doyon for the nearly 2 million oz Vinasale property with plenty of upside potential.
"This is a significant opportunity to rapidly develop an advanced gold project at an exciting time for the gold sector with record gold prices and within a proven high-quality gold district," said Discovery Alaska Director Jerko Zuvela.
Australia-based Discovery Alaska began its exploration of the 49th State in 2021 at Chulitna, a gold-silver-copper-tin project just west of the Parks Highway about midway between Anchorage and Fairbanks, Alaska.
The company made a splash on the Alaska scene with the 2022 discovery of lithium associated with the historical Coal Creek tin-silver-zinc deposit at Chulitna. While intriguing, the lithium values did not prove to be commercially viable and, in December, the company reduced the size of its Chulitna landholding to claims centered on the Partin Creek gold prospect.
Now, the company is refocusing on reconfirming the gold deposit at Vinasale and exploring the upside potential of this project in a historic placer gold mining district at the northeastern end of the Kuskokwim Mountains.
The technical report supporting the 2013 resource estimate recommended additional drilling to expand the Central Zone resource and test additional targets that may represent separate zones of mineralization.
The exploration targets at Vinasale have had limited drilling and are supported by geophysical surveys, primarily induced polarization, carried out on the property.
At Central Zone, drilling is recommended to test the limits of gold mineralization to the southern and eastern limits of the deposit.
In addition, several drill holes are suggested across the central portion of the zone to better define the mineralization and to test the zone to depth. Further drilling is also warranted in the northern part of the intrusive, where previous shallow drilling intersected mineralization over encouraging intervals.
"We are excited to progress the project development in a world-class jurisdiction, unlock unrealized value and establish a platform for a significant period of growth for the company," Zuvela said.
To explore the known and upside potential Vinasale has to offer, Discovery has entered into a 15-year lease agreement with Doyon. If commercial production is reached by the end of the term, the lease continues for the life of the mine. If Discovery delivers a feasibility study over the initial term, the lease can be extended in five-year increments at the company's request.
The cash consideration for the lease is as follows:
• $15,000 upon signing of the lease agreement.
• $40,000 per year for 2025 through 2027.
• $70,000 per year for 2028 through 2033.
• $225,000 from 2034 until the end of the original term.
If Discovery chooses to extend the lease beyond the original term, the annual payment increases to $300,000. The company has also agreed to pay Doyon $200,000 upon completion of the feasibility study and $600,000 upon a decision to begin mining at Vinasale.
In addition to cash payments, the lease agreement includes minimum annual exploration expenditures by Discovery as follows: $40,000 in 2024, $400,000 in 2025, $500,000 in 2026, $750,000 from 2027 through 2030; $1 million from 2031 through 2034; and $1.5 million from 2035 on.
Doyon also retains a royalty on future precious and base metals production at Vinasale.
Contributions toward educational programs for Doyon's Alaska Native shareholders are a mandatory component of any natural resources deal on Doyon lands, and Vinasale is no exception.
As part of the agreement, Discovery has agreed to make a $10,000 scholarship donation during the first year of the lease and $25,000 per year until the start of commercial production, at which point the donations will be $50,000 per year as long as mining continues at Vinasale.
"We are keen to progress with our new project and also the Doyon community," Zuvela told Mining News in an email.
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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