K92 Mining (KNT-V) has begun a $350,000 phase 1 exploration program at its 72-sq.-km Wels gold property in west-central Yukon, 45 km east of Beaver Creek and 185 km south of Dawson City — the start of a two-part program. It’s funding the program through a $1.04 million private placement it closed on June 8, 2018.
K2 started the program in early June. It’s stepping out from the area it previously drilled, known as Saddle, as much as 2 km south to a newly recognized 3-sq.-km area.
This area comprises two zones: Gunpowder and Chai. Both were prospected at the end of the 2017 field season, with the results out after snow had fallen. Samples from Gunpowder graded 28.2 grams gold per tonne, 2 grams gold and 13.6 grams gold. Chai returned 1.9 and 1.67 grams gold.
K2 has finished its geophysical survey and is running LIDAR right now. It will strip Chai and Gunpowder with a back hoe in early August, collect samples and then design a drill program for Chai, Gunpowder and Saddle. Its field season can run as late as October, before poor weather conditions will force it to stop.
“The business model for K2 is to find more Kaminak-style deposits,” K2 president and CEO Stephen Swatton says during a presentation at Destruction Bay, Yukon. We sit inside the Kluane recreation centre: a brown building on the water, named after the Kluane First Nation, who live in the area.
K2 is short for Kaminak 2: a second-coming of the company that discovered the Coffee gold deposit in Yukon’s Tintina gold district.
Goldcorp (G-T) bought Kaminak in 2016 for $520 million and is currently permitting the project. It contains 46.36 million probable tonnes grading 1.45 grams gold for 2.16 million oz. gold.
At Wels, K2 has only explored 5% of the total property. It says that, as with Coffee, the geochemical footprint of gold crosses all rock types. Chai, for example, contains sandstone whereas Gunpowder, to the northwest, contains gabbro.
The Yukon Geological Survey first sampled soil and till at Wels in 2002 that graded as high as 56.7 parts per billion gold and 33.5 parts per billion gold at the areas later called Saddle and Chai.
Then, in 2011, a private company called Gorilla Minerals optioned and resampled the ground. Infill soil sampling it conducted a year later returned 3,028 parts per billion gold, with rock samples grading as high as 149.5 grams gold.
Over the next several years it trenched and drilled the property.
In 2017, K2 drilled more than 1,200 metres at Saddle across 11 holes; highlights include 28.5 metres from 76.5 metres downhole grading 2.37 grams gold, 144 metres from 13.5 metres downhole grading 0.28 gram gold, and 21 metres from 78 metres downhole grading 1.48 grams gold.
K2’s second exploration phase would cost around $1 million and include trenching as well as drilling at Saddle and new target testing. The company would need to raise more money to finish the program; however, Swatton says he needs to be careful.
“With the market the way it is, I want to make sure I don’t blow up the structure of K2,” he says.
The likely orogenic-style deposit has received little drilling to date but has demonstrated ore grade intersections over 150 metres strike and to 120 metres depth. It remains open in all directions.
“The geology’s fairly blind,” vice president of exploration Jo Price explains. “There’s not a lot of historical data and there’s no real surface exposure. We really need to open it up with trenching.”
K2 has also proposed $150,000 in exploration at its Flume, Storck and Ladue claims, all within 120 km of Wels. It aims to conduct drone surveys, prospecting and soil surveys at Storck and Ladue, as well as a geochemical analysis of existing data at Flume.
K2 optioned Wels from Gorilla in August 2016. It can earn a 90% interest in the property by paying Gorilla $350,000 and issuing it 3 million shares. K2 will have to pay a final $100,000 in August. It has 1 million shares left to issue.
Gorilla retains a 3% net smelter returns royalty on the property. It recently changed its name to Go Cobalt Mining (GOCO-Cse).
In mid-May K2 also staked its 74 sq. km McArthur Creek gold project on the Alaskan side of the Moosehorn Range, about 80 km northwest of Wels. The historical mining camp has produced 100,000 oz. of placer gold and 4,000 oz. of lode gold from orogenic style mineralization.
The company has a $5.2 million market capitalization and a tight structure, with insiders owning 48%. It has about $1.1 million cash on-hand.
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