Klondike Gold hunts for source of the Yukon Gold Rush

Few stories in mining history rival the lore of the Klondike Gold Rush. Photographs of hordes of fortune-seekers climbing the Chilkoot Pass in north-western Canada in the late 1890s are some of the most iconic in mining history.

Some grand fortunes were made, and many lives were lost.

But more than 120 years after thousands of prospectors rushed into the wilderness of the Yukon no significant bedrock source for the gold was ever found in the camp and, curiously, no one seemed to be looking for it.

In the decades since those wild years, the area’s placer mines have yielded as many as 20 million ounces.

Four years ago, mining financier Frank Giustra hired geologist Peter Tallman as president of Klondike Gold (TSXV: KG) to hunt for the mother lode.

“When we arrived back in 2015, we found a camp with little to no basic geologic surveys, mapping or data, save for a regional geophysical survey done in 1987, and the last good fieldwork was done in the 1960s,” Tallman says in an interview. “So we had to start with the basis that the source of the Klondike gold is a grassroots exploration play.”

Klondike Gold says the source exists. The exploration company now controls a land package of over 600 sq. km covering most of the Klondike gold fields, starting just 20 km to the southeast of Dawson City.

Klondike Gold started with the premise that the geology is right for a bedrock gold source in the camp. The Klondike is located within the Tintina gold belt. The area holds significant gold deposits such as Donlin (45 million oz.), owned by a joint venture between Barrick Gold (TSX: ABX; NYSE: GOLD) and NovaGold Resources (TSX: NG; NYSE-AM: NG); Northern Star Resources‘ (ASX: NST) Pogo (7.6 million oz.); and Newmont Goldcorp‘s (TSX: NGT; NYSE: NEM) Coffee (4.1 million ounces). These deposits are associated with flexures in the crustal-scale shear zone that created the conduits for the formation of the gold deposits. These deposits are both intrusion-related and orogenic types, similar to those of the Destor-Porcupine camp that includes Timmins, which produced over 85 million oz. gold.

Klondike Gold began with regional surveys and relied heavily on historic results of a very low frequency magnetic survey completed in 1987, which showed a major crustal break in the camp that cuts from north to south through the western side of their property. The break follows the most famous placer gold creeks — Bonanza and Eldorado — and crosses the Klondike River at its confluence with the Bonanza Creek, 2 km east of Dawson. The company’s surveys included mapping, soil testing, geophysics, structural and historical data compilations, and helped them define the geology and structure to see if conditions existed for deposit formation on their property.

From this work, the company narrowed the hunt to the southeast of the junction point of the Bonanza and Eldorado placer creeks at the ghost town of Grand Forks. Over the last four years, the company has completed trenches, channel sampling and over 33,500 metres of diamond drilling.

The company’s best hit in 2015 was in drill hole 15-10 at Gay Gulch along the Eldorado fault, which intersected 2 metres grading 75.6 grams gold per tonne starting from 24 metres downhole, and included a 0.4-metre intercept of 420 grams gold.

In 2016, drill hole 16-58 in the Lone Star zone returned intersections of 6.6 grams gold over 7 metres from 7 metres and 9.4 grams gold over 4 metres starting from 27 metres. The Lone Star zone is in the northwestern part of the company’s property, covering part of the Eldorado and Bonanza Creek basins.

In 2017 and 2018, Klondike Gold had numerous lower-grade hits over significant intervals such as drill hole 18-201, which cut 1.02 grams gold over 91 metres in the Lone Star zone structure.

In 2019 the company drilled 94 holes, with highlights of 1,009 grams gold and 1,035 grams silver over 1 metre from 104 metres downhole in 19-267. The hole was drilled in the middle of the 5 km long Stander zone, which lies 2 km west of the Lone Star zone structure and east of the Eldorado fault. The company will release results from the other 76 holes over the next couple of months.

“When we started the regional surveys, there were few known occurrences of gold in bedrock,” Tallman says. “Now our sampling shows the presence of gold in bedrock in hundreds of samples all across our large land package. These surveys also showed that the placer gold is locally derived, as we found gold nuggets in the local host rocks within the placers on our property.”

The work also indicated that the gold system is largely intact, and host veining was shown to be formed near-surface with low lithostatic (weight of the overlying rock) pressures. The gold found in drilling and sampling is from the top of the orogenic gold vein system, Tallman says, noting that drilling to date has only tested to depths of 100 metres. He reasons there is potential to extend to significant depth due to the mineralized strike lengths outlined so far (greater than 5 km) and the deep-seated nature of this type of gold deposit.

In early December, the company reported that it had found four northwest-trending shears that host gold in the Lone Star zone. The shears are subparallel to the major regional break referred to as the Eldorado fault on Klondike Gold’s properties and situated 2 km apart. These breaks in the rock mass provide the erosional plane of weakness for the placer creeks, and they are mineralized for 5 km of strike, the company says. Running perpendicular to these are minor northeast faults. The gulches of the camp form along these faults and they are also mineralized.

The intersection of the northwest and northeast structures forms an “x” in both the rock mass and the topography, Tallman says, and he believes these intersections are prospective for larger and higher-grade gold zones. The company plans to focus its efforts on understanding the region’s potential using this model.

“We are now at a breakthrough in just this past month with the development of a coherent model,” Tallman says.

The task is to decide if there are large enough deposits on the property that can be mined economically. So far only 10% of the property has been explored.

In 2020, the company expects the program to continue in the Lone Star zone. To date, all the drilling in this area targeted the northwest structures, and now the company is looking to intersect the northeast-trending structures that follow the gulches.

“We’re going to do some crazy stuff in 2020,” Tallman says, “like turn the drills 90 degrees” and test the theory that the gulches follow the source conduits for the mineralization.

“This Lone Star zone area looks like Coffee,” he says. “It’s the same age as Coffee, and on the west side of the Eldorado fault we are in granites, the same host rocks as Coffee, and we can see multiples of this size target in our land package.”

(This article first appeared in The Northern Miner)