Solstice Gold (TSXV: SGC) has completed a new technical report on its Kahuna gold project, located 26 km northeast of Rankin Inlet and 15 km from Agnico Eagle Mines‘ (TSX: AEM; NYSE: AEM) Meliadine gold mine in the Kivalliq region of eastern Nunavut.
“The updated technical report validates our exploration strategy and modelling for Kahuna, and confirms it as an attractive, early-stage exploration project with the potential to host significant gold mineralisation,” David Adamson, the company’s executive chairman, says in an interview.
The property consists of two non-contiguous blocks covering an area of approximately 866 square kilometres. Solstice Gold owns 100% of 70 claims over an area of 775 sq. km., and 50% of an additional 19 claims over 90 sq. km shared with Dunedin Ventures, which changed its name to Kodiak Copper (TSXV: KDK) in March. (Dunedin Ventures spun off Solstice Gold in late 2017.)
“For many years, the property was under the control of diamond exploration companies and ended up in the hands of Dunedin, who started to see some unusual signs of pristine gold grains in their diamond samples,” Adamson explains. “I was then contacted by the vice president of exploration at Dunedin, who introduced me to the property.”
Because Adamson had previous experience of gold belts in Canada and the property was on the doorstep of Agnico’s Meliadine gold mine, he decided to see if there was a possible gold story there.
Only 15 km east of the Kahuna gold project on the western shore of the Hudson Bay, Meliadine began commercial production in mid-2019. The deposit has proven and probable reserves of 16.7 million tonnes grading 6.97 grams gold per tonne for 3.8 million contained oz. gold, and a mine life of 14 years.
After conducting substantial due diligence of the property over a four- to five-month period, Adamson and Martin Tunney, Solstice Gold’s president, were asked by Dunedin to operate Solstice in November 2017.
“The property has a unique combination of factors that make it very attractive for exploration,” says Adamson. “For instance, it’s in the northern part of Canada, it has a large land position, and is next to a major gold deposit. If you look around the southern parts of Canada, like Ontario, it’s tough to find targets with a large land position that have high exploration potential and are close to a world-class gold mine.”
The property is in the Archean Rankin Inlet Greenstone Belt (also known as the Meliadine Greenstone Belt). It consists of mafic volcanic, sedimentary and gabbroic intrusive rocks that have been poly-deformed, folded and metamorphosed. Cut by numerous northwest and east-west trending faults that are similar in orientation to the Pyke Fault system, which defines the Meliadine trend, the property is proximal to all known gold deposits at Meliadine.
After acquiring the property, Solstice compiled data from historical rock and glacial till sampling at the property, re-analyzed existing airborne magnetic and electromagnetic surveys and completed comprehensive rock sampling (float and outcrop), and detailed till surveys across the entire property, as well as follow-up geological mapping and sampling, a small rotary air blast drilling program and limited diamond drilling in one target area.
In 2019, Solstice collected 225 rock samples, seven of which returned more than 1 gram gold per tonne and two samples more than 5 grams gold, with a maximum grade of 34.1 grams gold per tonne.
Although the COVID-19 outbreak has forced the company to suspend its activities, the technical report recommends a Phase I exploration program consisting of additional geological mapping and till sampling as well as a 6,000-metre reverse circulation (RC) drill program to test potential high priority areas.
Contingent on the outcome from the first program, the report also recommends a Phase II exploration program. The program includes continued geological mapping and detailed till sampling, induced polarization surveying and preliminary testing of high priority areas with additional RC drilling and diamond drilling to follow up on any significant RC drilling results.
“We already have around 15-20 targets that are ready to drill, but our challenge will be to find sufficient cash to start the drilling,” Adamson says. “However, we have identified a potential third-party investor. So, we may be able to go straight into the drilling phase once we can get back to Nunavut.”
At press time in Toronto, Solstice Gold was trading at 5.5¢ per share within a 52-week trading range of 2¢ and 26¢. The company has 69.5 million common shares outstanding for a $3.82-million market capitalization.