Klondike Gold Corp. [KG-TSXV] said Monday it has mobilized a second drill rig and begun diamond drilling at the Nugget zone as part of a $2 million exploration program on the company’s 100%-owned Klondike property in the Canadian Yukon.
The second drill rig is targeting the Nugget Fault including the Nugget Zone, following up high-grade gold mineralization hosted by quartz veining discovered there between 2015 and 2018.
The company said approximately 30 drill holes are planned to test this Zone as part of a 60-hole program testing multiple targets. Meanwhile, drilling with the first rig continues at the Gay Gulch area, with assays expected in late July.
Ever since the original Klondike discoveries triggered a massive gold rush in 1896, prospectors have been baffled by their inability to find the bedrock source of all the placer gold which has been extracted from the streams and tributaries around Dawson City in the Yukon.
It has been estimated that the Klondike gold fields may have produced as much as 20 million ounces of gold from placer mines.
Yet that same area has yielded only 1,200 ounces of hard rock gold, most of it produced from the Lone Star mine prior to the start of the First World War in 1914.
Klondike Gold has been working to solve the mystery by assembling a large property position in the Klondike fields south of Dawson City. The company is backed by Vancouver financier Frank Giustra, who holds a 14.6% per cent stake in the company.
Klondike’s exploration efforts are being led by President and CEO Peter Tallman, a geologist with 35 years of experience in the mining industry. Having worked in Canada, Chile, Mexico, and Australia, Tallman is a director of another Giustra company, Fiore Gold Ltd. [F-TSXV, FIOGF-OTCQB], which has assets in Chile.
Klondike Gold is focused on exploration and development of the Lone Star gold target at the confluence of Bonanza Creek and Eldorado Creek, within a district scale property that is accessible by government-maintained roads and located on the outskirts of Dawson City.
The Nugget Zone is associated with a prominent, eight-kilometre long northwest trending magnetic low named the Nugget Fault, which also hosts the Glacier Gulch Zone and Nugget East Zone, as well as small mine workings and numerous other gold occurrences along it.
Between 2015 and 2018, approximately 70 drill holes were completed along the Nugget Fault ‘fairway’ over a 2.25 kilometre distance (from Glacier Gulch Zone to Nugget East Zone) with nearly all of them intersecting gold mineralization. The company said high grade gold has been intersected over narrow intervals, including 336.6 g/t gold over 0.22 metres and 147 g/t gold over 0.22 metres in quartz veins.
Approximately 30 shallow holes are planned to test for continuity and extensions of high grade gold mineralization in the quartz veining similar to the mineralization identified in previous years. Additional holes are expected, contingent on positive results.
Klondike said the Nugget Zone drilling campaign may be completed at the earliest by the end of June. Assay results from earliest drill holes are expected to become available by late July.
On Monday, Klondike Gold shares eased 1.72% or $0.005 to 28.5 cents. The shares are trading in a 52-week range of 17 cents and 43.5 cents.