Mining and exploration review north of the 60th parallel

Klondike Gold Corp. – Lone Star Property update

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Photo courtesy of Klondike Gold Corp.

Klondike Gold Corp. (the “Company”)(TSXV: KG) is pleased to provide an update on the 132 km2 Lone Star Property in Yukon Territory.

The company is actively exploring the Yukon properties which cover over 200 km2. The main focus is the Lone Star Ridge, located at the core of the 132 km2 Lone Star Property. This site contains the Boulder Lode open cut and a network of underground workings, site of the historic 1911 Lone Star Mine, which was the largest of the historic hard rock gold mines in the Yukon. Exploration work carried out between 2012 and 2013 confirmed the potential of a bulk tonnage target and shallow dipping, high grade vein systems. The eroded portion of this mineralization has been the source for the millions of ounces of placer gold that have been recovered out of the Eldorado and Bonanza drainages.

The ongoing 2013 exploration program on the Lone Star Property has continued developing a greater understanding of the structure and geology across the Lone Star Ridge. By studying the structural geology the dimensions of the gold bearing schist unit (GBS1) identified in the Boulder Lode area have been better defined as a bulk tonnage target and have contributed to increased understanding of the mechanisms controlling the location of the gold bearing veins.

p02-fullRecent work confirmed that the Lone Star Ridge occupies the core of a northeast-verging anticlinal D3 fold structure and is composed of three rock packages. The geochemically identified meta-rhyolite rock package is structurally lowest at the core of the fold, with the GBS1 unit of the Boulder Lode located structurally above it. These units are in turn overlain by a heterogeneous package of well laminated siliceous felsic schists with bands of more micaceous schist that together comprise the ‘Upper Sequence’. This area has undergone at least four phases of deformation with the latest event, D4, being associated with the formation of shallow dipping, gold-bearing quartz veins, including those in the Boulder Lode open cut as well as in the Nugget and Buckland zones.

Building on past structural work, Dr. Jim Mortensen has confirmed that the long limb of the D3 anticline on Lone Star Ridge shows a relatively consistent dip to the south, extending from the ridge crest down to Eldorado Creek. The slightly overturned short limb confirms a northeast fold vergence towards Victoria Gulch. Understanding the local structure is key to identifying areas where the GBS1 unit may structurally repeat or be close to the present-day topographic surface.

Work on Victoria Gulch has returned a quartz float sample containing pyrite and chalcopyrite that grades 28.33 g/t Au. Other prospecting samples from the Victoria Gulch area from 1994 yielded 9.46 g/t Au and 0.82 g/t Au. An outcrop of mafic schist in Victoria Gulch is cut by two discordant quartz veins with fresh pyrite in the vein selvages and a 10 cm wide rusty pyritic halo. Both the vein material and the host rock contain anomalous gold – the quartz veins returned values of 1.35 g/t Au and 0.68 g/t Au while the host mafic schist contains 0.17 g/t Au. This style of mineralization is significant as the fresh pyrite in mafic schist is not observed elsewhere on the property but is more reminiscent of gold-bearing alteration zones associated with the Sheba Vein, located on King Solomon Dome. Outcrops of quartz muscovite schist which are very similar in composition to the GBS1 unit found in the Boulder Lode are also exposed along Victoria Gulch. Although the one sample of this rock unit that was assayed did not yield anomalous gold values, the presence of this rock type is significant as it supports the structural interpretation of the area, and warrants further investigation.

Mapping and prospecting on the long limb of the fold from the ridge crest to Eldorado Creek and through the Nugget and Buckland zones has focused on increasing the structural understanding on this part of the property and locating and mapping historical trenches. The available exposures show the rock type to mainly comprise the heterogeneous Upper Sequence package which is cut by discordant quartz veins. These veins locally contain very coarse gold and appear to follow D4 structures, a pattern that is noted throughout the Klondike. The structural model interprets the GBS1 unit to lie below the Upper Sequence, which should be tested by deeper drilling.

A recent placer cut in Oro Grande Gulch between the Nugget and Buckland zones was mapped, and the observed lithologies are consistent with Upper Sequence rocks. The rock package dips to the south, which supports the interpretation of this area as being part of the long limb of the anticlinal fold.

In addition to developing a structural model for the Lone Star Ridge area, the significance of disseminated gold mineralization hosted in schist in the vicinity of the Boulder Lode was also investigated. In the fall of 2012 portions of core from three 2005 diamond drill holes with significant grade were re-sampled and re-assayed to investigate disseminated gold mineralization that occurred away from obvious discordant Dveins. Previous work had indicated that non-visible gold was present within the schist that is not obviously associated with quartz veining. The more recent work provides confirmation of these observations. The remaining half core was carefully split (to avoid the loss of material if re-sawn) and re-logged so that all possible vein sources of mineralization were noted. The results showed that in all three drill holes there were intersections where the mineralization was conclusively sourced from the GBS1 unit. In drill hole 05LS27 this included an interval of 13.30 g/t Au over 1.0 m as well as 3.29 g/t Au over 1.35 m. This work confirms the presence of significant gold grades disseminated throughout the schist independent of discordant Dveins in the Boulder Lode area.

Working towards developing a cohesive structural model for the Lone Star Ridge area will further increase the understanding of the controls on mineralization on the property and provide the basis for a comprehensive drilling program.

Dr. Tim Liverton has reviewed the content of this news release.

About Klondike Gold Corp.

Klondike Gold Corp. is a Canadian exploration company with offices in Vancouver, British Columbia and Dawson City, Yukon. The Company is focused on the development of its Yukon properties. In addition, the Company holds a large portfolio of gold and base metal properties in southeastern British Columbia and in Portugal.

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