Part Two: Could Kilgore's Idaho Gold Property be a Winner?
By: James Finch | Posted: 08th June 2006
A preliminary structural investigation by Stanton W. Caddey, a highly respected geological consultant, concluded in an October (2003) report:
"The Kilgore prospect area represents a high quality gold project, much of which remains to be drill tested. Most the previous drilling was focused along a peripheral or satellite segment of the main hydrothermal system…. The primary exploration potential is for a bonanza, epithermal, gold-rich vein system localized along the major N60W-trending McGarry Canyon NW fault zone and subordinate faults in the area referred to as Dog Bone Ridge… Exploration potential at the Kilgore property for more than doubling the present gold resource with further exploration drilling is regarded as excellent."
In May 2004, Mine Development Associates of Reno, Nevada completed a scoping level update of Echo Bay's 1996 initial engineering assessment of the Kilgore project. Neil B Prenn, P.E., agreed this is a large epithermal gold deposit, hosted in volcanic and sedimentary rocks, and the resource is hosted within quartz stockwork and in silicified sedimentary rocks.
In reviewing Echo Bay's work, he observed that instead of calculating a reserve for the property, they described an "estimate with high confidence, the potential mineable part of the resources," at 10.087 million tonnes, averaging 1.28 grams/tonne, containing 417,000 ounces of gold. The engineer concluded, "The project appears to have reasonably attractive economics if the 'potentially mineable material' can be doubled at $375/ounce gold price.
Burmeister believes the best is yet to come. His summary of Echo Bay's previous drilling was simple and to the point, "They were focused on a low-grade open pit occurrence, which is very nice. It has a significant resource. In their enthusiasm to move that particular aspect of the project forward, I think they did not have the chance to step back and look at the overall hydrothermal system, which we have done. Burmeister added, "We think the best may be yet to come by exploring for a high grade underground type of operation which is very much in favor these days."
The successful drill hole was a blind discovery at 410 feet of depth. Burmeister clarified, saying "The first hole that we drilled, we were successful in discovering a 'blind' high grade occurrence of gold beneath the barren sinter." He realized the mistake made during the 2004 drill program, "In our enthusiasm to get our arms around this target area, which we call the Dog Bone Ridge area, we took enormous step-outs, and never offset that high grade hole. Subsequent holes were all interesting, museum quality realgar mineralization and stibnite mineralization, which are diagnostic of the epithermal model we're testing. We got anomalous gold, but we didn't get any ore grade material."
The Dog Bone Ridge area, as determined by geochemistry, geophysics, geology and structure, is at least 6,000 feet long and 1,800 feet wide. Burmeister explained his better understanding of the target area, "We think this is a very recent geological occurrence, and has not been eroded. Typically, there is no gold on the surface on these systems. It comes as the result of boiling. The gold is precipitated out at that level and does not reach the surface. We're actually dealing with a paleo-surface. Our discovery hole was deeper in the system, below the zone of boiling. So I don't think the other drilling we did, the other core holes, they did nothing but reinforce our interpretation of the system."
In July, Kilgore Minerals will proceed where drilling left off in 2004. A recent news release announced, "The summer 2006 drill program is expected to commence in July with the first holes designed to offset the Elsa Zone discovery. There are a number of Elsa 'look-alike' definitive targets within the overall Dog Bone Ridge target area that will also be tested." How does Norman Burmeister explain this in layman's terms? "We're going to offset that discovery hole and find out what that's all about," he told StockInterview. "We'll go about the business of evaluating that project because it's all prospective. We were targeting a projected structural intersection of which there are many. The success we had with that first hole, it's not unique in terms of what we know in the geophysics, the geology, the structure and the geochemistry. That's not to say that all of those targets are going to be successful, but the size of this system indicates it can host a very significant resource."
It was an exciting discovery hole, and the summer 2006 drilling program could spell success if drilling results match Burmeister's enthusiasm. In closing, he said, "That hole could well be right smack in the middle of an ore body. We don't know what the orientation of the zone is, because with one hole, it is impossible to know what the dip and the strike is. We don't know if it's close to true width or we hit it at the high angle. But, it's very exciting."
About the Author
Occupation: Writer
James Finch is a contributing editor for StockInterview.com and other publications. http://www.stockinterview.com
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Tags: quality gold, open pit, gold price, reno nevada