Initial drilling returns good values at Rainbow Hill

The 3,400-acre property is in the Valdez Creek mining district which is accessible by road year-round. Several placer mining operations, including the largest gold producer in Alaska, are active in the area. The Rainbow Hill claims are considered to be a possible source of the placer gold.

Although the property contains numerous mineralized intrusive and sediment-hosted precious metal targets, Canalaska’s initial drilling was aimed at testing the grade and continuity of the TMC discovery zone.

Intercepts from drill hole R5 include 40 ft grading 0.322 oz gold at a depth of 55-95 ft, with 15 ft of 0.811 oz from 70-85 ft.

Step-out drilling in hole R6 intersected 40 ft of 0.210 oz at a depth of 30-70 ft, including 15 ft grading 0.486 oz from 40-55 ft.

These results appear to substantiate earlier high grade gold assays from altered argillite and chloritized granodiorite in the trenching and sampling program. Both free gold and gold associated with arsenopyrite and pyrite were noted. However, the proportion is not yet known.

The TMC zone, open on both ends and to depth, is estimated to have a strike length of 2,400 ft and an average true width of at least 15 ft.

According to Canalaska, several blind intrusive bodies were intersected during the 1989 drilling program that remain to be tested. In addition, the company has yet to test an area to the north of the TMC prospect where highly anomalous gold was encountered in quartz-ankerite shear zones up to 200 ft wide and in a soil anomaly measuring 3,400×800 ft. Canalaska also noted that extremely high mercury values occur over a strike length several miles long on the property to the south of the TMC zone.

These anomalies are thought to be controlled by the Black Creek fault zone, a regional shear which is associated with gold mineralization in the district.

Ongoing exploration work is expected to resume late next spring. The program will include both reverse circulation and diamond drilling on the TMC prospect, plus trenching and exploration drilling on other anomalous areas of the property.

Because of the size of the property and the number of targets that remain to be tested, President Harry Barr said the company is looking at the possibility of a joint venture for the 1990 work program.

Curtis Freeman, geologist, said the property has similarities to the Motherlode district of California, the Yellowknife area of the Northwest Territories and the Juneau gold belt of Alaska.

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