Corporate Summary
"Klondike Star is intent on succeeding in the global mineral market, with a focus on high-quality properties."
Klondike Star Mineral Corporation is a junior mineral exploration and development enterprise currently with eight base and precious metal projects totaling 463 km2 (179 mi2) in the Yukon, Canada focusing primarily on gold. Seven of eight Klondike Star exploration projects are situated in the Tintina Gold Belt which spans Alaska in the United States and the Yukon in Canada.
We are exploring extensive surface and subsurface mineralized zones on a 370 km2 (143 mi2) land position in the world-renowned Klondike, still an active gold-producing region in the Dawson Mining District, and 93 km2 (36 mi2) of select high-potential mineral targets in other parts of the Yukon.
Klondike Star is implementing a full scale, advanced-stage exploration program on its hard-rock quartz claims centered around the original Lone Star Mine on Eldorado Dome. This area includes the famed placer gold producing areas of Bonanza and Eldorado creeks, site of the Klondike Gold Rush of 1897. Of growing significance is an advanced, late stage exploration program on the Indian River Placer Project. Interests in several other gold, base and precious metal properties are being advanced. Klondike Star is implementing one of the Yukon’s largest and most comprehensive mineral exploration programs.
We are pursuing a specific business strategy. This involves a long-term, systematic and results-oriented approach towards exploration research, supported by a scaled expansion of field operations on carefully selected assets, combined with a concurrent investment in planning for potential mine development.
World-class Opportunity – the Klondike
“Using the most systematic, modern and comprehensive exploration approach ever employed in the region, Klondike Star Mineral Corporation is engaged in the final steps in the search for the ‘mother lode’.”
The Klondike was home to the greatest gold rush the world has ever seen. It is considered to be the richest placer, or surface, gold producing area in history where millions of ounces of placer gold have been mined continuously for the past 110 years. To this day, the region is known for gold production. And yet, the underground source (or sources) of the placer gold remains to be discovered. Solving this geological puzzle, with the objective of opening and operating mines in the future, is Klondike Star’s mission.
Through a joint venture with exceptional Canadian mine-finder Richard Hughes, and a concerted effort to acquire additional mineral claims, Klondike Star has assembled the Lone Star Project, along with five additional quartz and placer projects in the Klondike region. Lone Star alone hosts more than 1,000 mineral claims and crown grants with an expansive area of 152 km2/58.7 mi2. The Lone Star properties, including the famed Eldorado and Bonanza Creeks, were the nexus of the original Klondike Gold Rush.
Klondike Star joined forces with the internationally-renowned University of British Columbia Mineral Deposit Research Unit to sponsor collaborative and in-depth geological research on the entire Klondike region.
“We know that a substantial amount of gold – of lode gold – is still present. We know that because we see gold-bearing quartz vein systems developed in many different parts of the Klondike. This is a style of gold mineralization that typically contains gold over a very, very substantial vertical distance, certainly thousands of meters.”
Dr. James Mortensen, Ph.D Geol., P.Eng., U.B.C. Mineral Deposit Research Unit
Based on the results being obtained from Klondike Star’s exploration investment, the stage is set for the dramatic next steps in the journey from discovery to determination of an economical ore body.
Exploration project pipeline
Klondike Star has a majority ownership interest in five projects and an exclusive option to explore, earn or purchase an ownership interest in three projects.
Two projects are advanced-stage exploration and early development properties. Three projects are drill-ready, intermediate-stage exploration properties. Three projects are early-stage exploration properties.
Quartz and placer gold are the exploration and development targets of seven projects, and the eighth features base as well as precious metals.
Performance over three years
“These operating results demonstrate that Klondike Star is making good on its mineral exploration agenda, and furthermore, that the business and investment fundamentals remain strong. With world-class prospects combined with high levels of performance, the Company is setting itself apart from others in the natural resource sector, and this, in our view, makes Klondike Star a choice investment.”
Hans Boge, P.Eng., President
Highlights of progress on leading projects, Lone Star and Indian River Placer
Lone Star Project
Since acquiring Lone Star in December 2003 from legendary Canadian mine finder Richard Hughes, Klondike Star has:
- moved it to an advanced-stage exploration project and commenced a scoping study to assess the economic viability of the mineral deposit
- showed exploration results and professional analysis indicating an extensive mineralized area, without significant limits, hosting a large-tonnage, low-grade gold resource augmented by higher grade zones
- discovered two new gold zones, one in 2005 and one in 2006, bringing the major exploration targets to five zones: Lone Star, Nugget, Buckland Shear, 27 Pup-Dysle-Veronika and the new JF zone
- consolidated the largest hard-rock gold claim project in the Klondike, expanding mineral claims from 500 to 1,056, with a total area of 152 km2/58.7 mi2
- conducted two seasons of diamond drilling totaling 55 holes and 7,722 m/25,333 ft
- released results from diamond drilling on the Lone Star zone (primary exploration target, site of the former producing Lone Star Mine, 1912-14), including 1.67 g/t gold over 61.7 m, 2.74 g/t gold over 8.4 m, 2.1 g/t gold over 24 m, 10.75 g/t gold over 1 m, 1.91 g/t gold over 15.7 m and 4.03 g/t gold over 2.1 m
- released results from diamond drilling on the Nugget zone, including 98.7 g/t gold over 0.90 m in one hole; all holes intersected narrow zones of moderate to high grade within broader low-grade intervals
- processed 129 tonnes of bulk samples of gold-bearing ore, including 1.33 g/t over 24 m
- completed an aerial geophysical IP survey over 35 line km/22 mi identifying new diamond drilling target areas
- became the majority 55% owner and the operator
- constructed a modern 65-person exploration complex, core-processing facility, and designed and fabricated a custom gravity bulk-sampling test plant
- created a multi-year scientific joint venture with the Mineral Deposit Research Unit at the University of British Columbia to help unlock the geological puzzle of the Klondike plateau.
Indian River Placer Project
Since acquiring an initial group of claims, Klondike Star has:
- moved it to an advanced-stage exploration project and commenced business planning and permitting for potential mine development
- consolidated close to 100% ownership of one of the larger placer gold projects in the Klondike: 214 mineral claims plus 17 leases with a total area of 37 km2/14.3 mi2
- completed two seasons of auger drilling totaling 274 holes for 2,426 m drilled to date; the third season is in progress
- recovered gold from 100% of the holes drilled in the main target area along the Indian River in 2006 and 87% in 2005
- started test mining by processing the first of a planned series of bulk samples using the Company’s new, specialized processing plant (5 ft trommel)
- bulk sample gold recovery now correlated with auger drilling results
- installed on-site infrastructure including a 12-person exploration camp and sample processing facility
- progressed with stripping, clearing and permiting for an expanded test mining program in 2007 and permit applications for possible future mine operations.
Selected performance indicators, March 1, 2004 – November 30, 2006
Ownership of mineral rights (CLICK CHART TO ENLARGE)
Exploration property indicators (CLICK CHART TO ENLARGE)
Operational indicators (CLICK CHART TO ENLARGE)
Year-to-date highlights, March 1 - November 30, 2006 (Q3)
Exploration
- New discoveries on the advanced-stage Lone Star Project and intermediate-stage Ultra Project.
- Two advanced-stage exploration projects in early development (scoping study in progress for Lone Star Project and business plan in progress for Indian River Placer Project).
- Three intermediate-stage exploration and drill-ready projects.
- Doubling bulk sampling (41 to 86 t), an IP geophysical survey and delineation of new drill target zones on Lone Star Project, and first bulk sampling on the Dominion Project.
- Overselling the November 15, 2005 private placement offering of 4,000,000 shares of common stock at $2.75 per share, with proceeds of $11,915,700, for a total of 4,332,982 common shares.
Mineral rights and properties
- Establishing the new Dominion Project with acquisition of the DOM claims.
- Establishing the new Bonanza Project by purchasing 100% ownership of the PACRIM/Barramundi claims.
- Adding 92 mineral claims and increasing the land position by 100% on the Dominion Project.
- Expanding the Dominion and Bonanza projects by staking 65 mineral claims.
- Acquiring a 49% ownership interest and operational management of 29 placer claims on the Indian River Placer Project and increasing total claims held by 16%.
Infrastructure and capacity
- Setting up the Company’s own diamond drilling group with a flyable diamond drilling rig.
- Expanding the Eldorado exploration camp complex; installing a satellite camp for the Dominion Project.
Lone Star Project
- Discovering a new gold mineralized zone brings known exploration targets up to five zones.
- Diamond drilling results continue to increase the estimated mineralized area/resource, without limits; identifying entirely new drill target zones.
- Bulk sampling results, including 1.33 g/t gold over 24 meters.
Indian River Placer Project
- Procuring a fabricated five-foot diameter trommel for bulk sampling and testing of processing technologies.
- Successfully completing the first stage of the test mining program.
- Proceeding with winter auger drilling program with a target of 150 to 200 holes.
- Continuing business planning for potential mine, to be completed in 2007.
Financial indicators (CLICK CHART TO ENLARGE)
Investor Relations indicators (CLICK CHART TO ENLARGE)
Exploration property indicators (CLICK CHART TO ENLARGE)
Ownership of mineral rights (CLICK CHART TO ENLARGE)
Operational indicators (CLICK CHART TO ENLARGE)
Corporate goals and business strategy
In support of its mission, Klondike Star has established corporate goals relating to mineral production, capital formation and durable investor relationships, employer of choice, sustainable development and good corporate governance.
Klondike Star is advancing its projects using a multi-prong business strategy. This strategy has as its foundation:
- undertaking mineral exploration and development within a sustainable development paradigm;
- selecting and advancing quality mineral exploration projects managed and evaluated by a team of qualified industry professionals;
- establishing links with internationally recognized university-based geology resources for expertise and access to leading technology in geological science;
- demonstrating substantive focus on good corporate governance and best practices;
- forging strong relationships with financial professionals in order to provide adequate capital investment for its projects, with the goal of bringing new mining production on-stream in the future;
- investing in relationships with and collaborative efforts involving First Nations, local suppliers and contractors;
- acquiring and supporting a large and growing shareholder base;
- practicing proactive, balanced and timely disclosure addressing what is newsworthy from a shareholder point of view in a manner that meets and exceeds regulatory requirements; and
- building shareholder value through every aspect of the Company’s business and operations.
Gold Industry Outlook
Commencing in December 2002, an uptrend in the price of gold against the U.S. currency began. This appears to be a trend reversal from the period 1981 to 2001 and has refocused interest in mineral exploration, particularly in jurisdictions with low political risk and favorable to mining, such as Yukon Territory, Canada.
“The enduring value of gold is once again being recognized in the marketplace.”
Pierre Lassonde, President, Newmont Mining Corporation.
Reasons to Invest
Rarely does an opportunity like Klondike Star present itself.
- Early bull market in precious metals
- Major commodity inflation cycle underway
- World-class exploration targets
- Two projects at scoping study stage
- Top professional management and geology team
- Solid financing capability
- Debt-free, fully staffed and equipped, strong treasury
- Broad shareholder base
- Projects located in stable jurisdictions, known for enabling sustainable mining
