Like many visitors to Nevada, Sitka Gold Corp. (SIG:CSE; SITKF:OTCQB; 1RF:FSE) is attempting to defy the odds and strike gold.
Only Sitka has eschewed the blackjack tables and slot machines to put its money on the drill bit as the junior seeks Carlin-type gold deposits at its Alpha gold project in Nevada's 50-million-ounce Cortez Trend.
Sitka is drilling six new targets at Alpha after the Bureau of Land Management (BLM) recently dealt Sitka its drilling permits. The junior will drill at least 1,500 meters in its follow-up phase of reverse-circulation drilling.
Alpha is located 40 km northwest of the Carlin and Goldstrike mines that form the Cortez Hills complex, the largest gold mining operation in the United States. It is co-owned and operated by Newmont Corp. (NEM:NYSE; NGT:TSX) and Barrick Gold Corp. (GOLD:NASDAQ; ABX:TSX).
These latest holes will attempt to locate a gold system Sitka CEO and Director Cor Coe says should be found southeast along trend from two previous drill holes.
Those two discovery holes intersected long intervals of anomalous gold, along with pathfinder elements typically associated with the Carlin-type gold deposits.
"Results from our last two drill holes indicate that we are on the fringe of this system and we are now focused on discovering where the high-grade zones are," Coe said in a release. "We aim to make the next big gold discovery on the Cortez Trend."
The junior has cards up its sleeve elsewhere, too, including the Burro Creek silver-gold project in Arizona; the RC gold project and OGI silver-zinc-gold property, both in Yukon; and the Coppermine River project in Nunavut.
At the Burro Creek silver-gold project in Arizona, about 200 km northwest of Phoenix, Sitka is seeking permits for more drilling to prove up a historical resource and perhaps discover more mineralization.
In 2011, based on 87 reverse circulation and diamond drill holes, Northern Freegold Resources outlined a historical NI-43-101-compliant resource at Burro Creek of 2,331,871 Indicated tonnes (2.33 Mt) grading 1.01 grams per tonne gold (g/t) and 36.77 g/t silver; the Inferred resource was 2.24 Mt running 0.6 g/t gold and 30.95 g/t silver. The total resource (Indicated and Inferred) was 4,992,891 oz (4.99 Moz) silver and 118,810 oz (118.8 Koz) gold. The resource used a 0.5 g/t gold-silver-equivalent cutoff.
Sitka acquired the property from Coelton Ventures in September 2018 by paying US$1 million cash, plus 5 million shares, and promising to spend US$4 million over seven years on exploration and development.
Sitka drilled 1,000 meters over 10 holes at Burro Creek in 2020, which confirmed that mineralization extends along strike.
Perhaps the best result was hole BC19-56, which hit 41.08 meters grading 1.15 g/t gold and 51.3 g/t silver, including 1.07 meters running 17.55 g/t gold and 33 g/t silver. Not far away, hole BC19-57 returned 50.63 meters grading 1.10 g/t gold and 35.97 g/t silver.
Sitka drilled as far as it could on its patented mining claims and is now seeking permits from the BLM to drill on unpatented claims.
The near surface silver-gold mineralization occurs in a low-sulphidation epithermal vein system known as the Burro vein. Burro has been traced at surface for more than 1.7 km at widths as wide as 45 meters. Sitka estimates that only about 10% of the system has been drilled.
"It's a system that sticks right out of the ground, you just don't really come across these anymore, it's one of those deposit types that probably would have been mined a long time ago, if it had not fallen through the cracks," Sitka director Ryan Coe told Streetwise Reports.
Metallurgical testing in the 1980s on ore from Burro Creek indicated recoveries of 73% gold and 76% silver using flotation.
Burro Creek is about 2 km west of Highway 93 on a gravel road. On the other side of the highway sits Freeport McMoRan Mining's (FCX:NYSE) Bagdad mine, a copper porphyry deposit that has been mined for more than 100 years. Burro Creek was permitted for mining in the 1980s but never exploited.
Ryan Coe is currently in the Yukon overseeing the summer exploration program on Sitka's RC Gold project in the Tombstone Gold Belt, a smaller belt within the much larger and prolific Tintina Gold Belt. The belt hosts several intrusion-related gold deposits such as Victoria Gold's (VGCX:TSX) Eagle gold mine, Yukon's newest gold mine located about 30 km northeast of Sitka's land package.
Victoria's Eagle and Olive deposits have a Proven and Probable resource of 3.26 Moz gold in 155 Mt running 0.65 g/t gold. Even more ounces are in the Inferred category.
RC is also contiguous with Victoria Gold's Clear Creek property to the south and St James Gold's (LORD:TSX.V) Florin gold project to the north. Florin has an Inferred resource of 171 Mt at 0.45 g/t gold for a total of 2.47 Moz.
Sitka's 376-sq-km land package has seen little advanced exploration and comprises five claim blocks—Mahtin, RC Gold, Clear Creek, Barney Ridge and some newly staked claims.
One highlight from 2020 drilling includes an intercept of 139.1 meters grading 0.61 g/t gold in the Saddle-Eiger zone, which has been identified as a potentially large intrusion related gold discovery covering a strike length of 2 kilometers and a width of approximately 500 meters. Only four drill holes were put into this mineralized gold system last year with some holes spaced over 800 meters apart. The company notes that each of these drill holes returned long intervals of gold intercepts comparable or better than the resource grade at the nearby Eagle gold mine.
This summer the junior plans to drill up to 10,000 meters focused primarily on its new gold discovery but will also be advancing other drill targets on the district scale property.
Coe says one of the key reasons Sitka is in the Yukon is quality of jurisdiction.
"The Eagle gold mine, which just went into commercial production last year, shows us that you can get through the process (in the Yukon) with local stakeholders, including First Nations, government and local communities, and that you can actually get through to building a mine. So, if the RC Gold project proves to have the size and grade necessary to host an economic deposit, there's a good chance that we might get some larger companies knocking on our door looking to do a deal. And if that happens, we'll review it to see if it makes sense for our shareholders," Coe explains.
In 2013, Sitka management founded a private company known as Tundra Copper Corp. but sold it 18 months later to Kaizen Discovery (KZD:TSXV) at a profit.
Sitka raised $6.4 million in a private placement earlier this year to fund all of its planned 2021 exploration work. Sitka trades in a 52-week range of $0.12 to $0.34. It has 110 million shares outstanding, about 178 million fully diluted. Management owns about 18%.
The company also has a seven-member board with a lot of experience, not just in the boardroom but also in the field. Coe says that collective experience allows the junior to operate in a lean, efficient manner, running most aspects of their projects in-house without having to outsource for operational help.
It also allows the company to have five projects on the go at once, something Coe says is an advantage.
"This was a strategy; it was done intentionally. We're not a project generator out there just grabbing things and then trying to sell them to someone else to advance. . .the motivation was to have more than one horse in the race. If you have all your eggs in one basket, I think the risk goes up substantially, whereas with a handful of really good, diversified assets, there's still risk but you diminish it substantially," Coe told Streetwise Reports. "Having projects in different jurisdictions also allows us to operate year-round. Last year, we drilled four of our projects and we were able to handle it. This year we intend to do the same along with some follow up work on our copper project in Nunavut."
Only time will tell if Sitka finds an ace in a hole.
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Disclosure:
1) Brian Sylvester compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
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