Snowline Gold’s (TSXV: SGD) Valley deposit dwarfs most other projects in grade and metal, according to the most anticipated initial resource for a Yukon asset in decades.

Valley in Snowline’s Rogue project holds 75.8 million indicated tonnes grading 1.66 grams gold per tonne for 4.1 million oz. contained metal, the company said on Monday. It has 81 million inferred tonnes grading 1.25 grams for 3.3 million oz., Snowline said in a release.

“In just two full exploration seasons, Snowline has advanced its Valley target from greenfield discovery holes to a robust multi-million-ounce gold deposit with continued exploration upside,” CEO Scott Berdahl said. “Valley has excellent potential for continued growth, as evidenced by broad intervals of 1-2 grams per tonne gold mineralization returned in drilling on multiple edges of the system.”

Major B2Gold (TSX: BTO) invested into Snowline early last year as drilling solidified the 1,100-sq.-km Rogue as part of the Tombstone gold belt arcing across the region. Kinross Gold’s (TSX: K; NYSE: KGC) Fort Knox mine in Alaska, and Victoria Gold’s (TSX: VGCX) Eagle, the Yukon’s only operating hard rock gold mine, are geologically similar. They’re in the same type of reduced intrusion-related gold system while Valley has much higher grades.

Other companies with projects in the Yukon’s part of Tombstone include Sitka Gold (CSE: SIG), Banyan Gold (TSXV: BYN; US-OTC: BYAGF) and St. James Gold (TSXV: LORD).

Vancouver-based Snowline has drilled 4,000 metres to expand the estimate with 15,000 metres planned this year in its largest drilling program.

More drilling

The resource is based on almost 28,000 metres of drilling to January, has a cutoff grade of 0.4 gram and is confined to a potential pit shell of 297 million tonnes of material, Snowline said. It assumes a conventional 25,000-tonne-per-day mill, a gold price of $1,800 per oz., mining costs of C$3.50 per tonne, and processing costs of C$22 per tonne.

The Valley deposit sits on a fraction of the company’s land holdings, “within a cluster of high-priority targets sharing key geological characteristics with Valley highlighting district level potential,” Snowline said. It has strong non-refractory gold mineralization beginning at surface, it said.

Shares in Snowline Gold gained 2% by mid-Monday in Toronto at C$5.51 apiece. The company has a market value of C$866.3 million.

Challenges

The project lacks direct road and power connections, although there is a nearby trail. Rogue lies near the border with the Northwest Territories, some 223 km east of the nearest town, Mayo. Snowline also has the Einarson, Ursa and Cynthia projects in the same area, part of an eight-project portfolio covering roughly 3,600 sq. km. 

Rogue hosts multiple intrusions similar to Valley along with gold found in stream sediment, soil and rock samples, Snowline said. Most geologists hold that reduced intrusion-related gold systems occur in clusters, suggesting the district-scale potential of the properties, the company said.

The systems are characterized by sheeted, gold-bearing quartz vein arrays within and near felsic, ilmenite series intrusions. The quartz veins are generally thin, about 2 cm in width, but their grade, abundance, and continuity can make them attractive as bulk-tonnage mining targets, Snowline said.

Source: MINING.COM – Read More