VANCOUVER — Colorado Resources (TSXV: CXO) is preparing for a $4-million exploration program this year that should increase its stake in Seabridge Gold’s (TSX: SEA; NYSE: SA) KSP copper-gold property in northwestern B.C.’s Golden Triangle district.
The program, comprised of 7,500 metres of drilling at the project’s Inel gold prospect, would bring Colorado’s interest in the 305 sq. km property from 51% to 80%. Seabridge acquired KSP — along with the adjacent Iskut copper-gold property — after buying junior explorer SnipGold for $20 million last June.
“The market has improved drastically since we first optioned the property from SnipGold in 2011,” Adam Travis, president and CEO of Colorado, tells The Northern Miner during a phone interview. “The money is back and we’re going to do the work that’s necessary to earn 80% in what we believe is the best half of Seabridge’s Iskut property.”
Much like Iskut, KSP has the hallmarks of hosting multiple, kilometre-scale porphyry systems at depth, including epithermal gold and silver deposits that extend outwards from the intrusion-related orebodies.
Over 100 sq. km of Colorado’s property is covered with a gossanous lithocap, a zone of clay-silica-iron alteration, which is a product of hydrothermal fluids escaping through the carapace of a porphyry system.
The gossan, which carries over 0.1 gram gold per tonne in soil samples, is one of the largest seen in the Golden Triangle, a district that hosts Seabridge’s 10.2 billion lb. copper and 38.8 million oz. gold KSM porphyry camp, and Pretium Resources’ (TSX: PVG; NYSE: PVG) 9.1 million oz. Brucejack epithermal gold deposit.
“When you’re looking out at this thing you know there must be a truly impressive engine sitting behind it,” Travis says. “KSP has all the right geology to host another Brucejack or KSM, or both. What we’re controlling is a district, not just a property.”
Most of Colorado’s past drilling at KSP has focused on Inel, a historic gold showing located 15 km southeast of Skeena Resources’ (TSXV: SKE; US-OTC: SKREF) historical 1 million oz. Snip gold mine.
Colorado drilled over 7,800 metres last year — its largest drill program at KSP — targeting Inel’s Discovery and AK zones, which were explored in the 1980s and early 1990s, with 17,500 metres of drilling from 1,240 metres of underground drives.
The company delivered results up to 165.5 grams gold over 1 metre, confirming the historical high-grade intercepts, but also found broad halos of lower-grade gold mineralization measuring 99 metres of 2.11 grams gold, with most of the gold in a 1-metre subinterval grading 138 grams gold.
“We started where previous explorers left off, and everything we’ve seen suggests that we’re just scratching the tip of the iceberg at Inel,” Travis says.
The 2016 drilling tested a 300- by 600-metre area within a 1 by 1.5 km soil geochemical anomaly that averages 1.27 grams gold. The rest of the soil anomaly, which holds nine target areas, is largely untested.
To add to the project’s potential, induced polarization geophysical surveys, completed by Colorado last year, defined a chargeability high that extends to the west from previous drilling.
“The data suggests there’s a potentially large sulphide-bearing system to the west where there’s a contact with an intrusive, so we’ll focus on that area in drilling this year,” Travis says.
“When you’re working in the Golden Triangle, everyone expects you to drill a discovery hole like hole 109 at Eskay Creek,” he says. (Hole 109 delivered 208 metres of 27.2 grams gold, 30.3 grams silver, 1.1% lead and 2.3% zinc.)
“But it’s important to remember there were 108 holes completed before that. I don’t think the public has a full appreciation of how mines are made. It takes time and a lot of hard work, but in a district like this, persistence certainly pays off.”
Colorado shares have traded in a 52-week range of 18¢ to 71¢, and closed at 27¢ at press time. The company has 96.3 million shares outstanding for a $24.6-million market capitalization.