MINERAL TARGET: GOLD
An intermediate-stage gold exploration project at the headwaters of Dominion Creek, the Dominion Project consists of 371 claims totaling 62.8 km2 (24.2 mi2). Klondike Star holds 100% or majority interest in 286 claims and an additional exclusive option to purchase an undivided 100% interest in 85 claims acquired in the first quarter ending May 31, 2006 and the and second quarter ending August 31, 2006.
On April 27, 2006, the Company announced the acquisition from Klondike Source Limited’s (KSL) subsidiary, KSL Exploration (Yukon) Limited, of the exclusive right to purchase an undivided 100% interest in up to 56 quartz claims in the DOM block located on Hunker Dome in the eastern part of the Klondike goldfield. On August 8, 2006, Klondike Star announced the acquisition of the exclusive option to explore and purchase the J.A.E. claim group on King Solomon’s Dome bordering on mineral claims already held by the Company. The Company has also staked an additional 92 claims to further consolidate the property into a single contiguous area.
Since 1999, a portion of the property has been explored by KSL Exploration (Yukon) Limited, including drilling, soil sampling and trenching. Before that, United Keno Hill Mines Limited, a longstanding operator of gold and silver properties, such as the Elsa and Keno Hill mines, invested significant effort on the other portion of the property. Significant exploration work has been conducted on the J.A.E. claim block by successive owners. Regional and project-specific infrastructure includes good seasonal road access.
The area covers several mineralized vein systems, some shafts and a long tunnel, and has been the subject of percussion drilling, soil geochemistry and trenching. Various broad zones of disseminated mineralization have been identified. The 2006 exploration objective was to consolidate and ground-truth previous exploration results, advance knowledge of the mineral resources, take advantage of extensive trenching in situ, identify future drill targets on a systematic and expedited basis, and consolidate the property and mineral interests through a strategic claim staking program. Activities included detailed mapping, extensive chip and soil sampling and geochemistry, evaluation of more than 60 existing trenches and assessment of selected targets, and bulk sampling and processing through the Eldorado test plant. A satellite camp was installed to support project operations.
The 2006 field work confirmed the presence of multiple, continuous gold-bearing structures that warrant testing by drilling. In addition, several significant new gold-in-soil anomalies were identified in areas with no apparent prior exploration.
Drilling is proposed for 2007 at the JAE claim block. This lies at the headwaters of Dominion, Gold Bottom and Hunker creeks, all of which have been significant producers of placer gold, and are still being actively mined. This area of the Dominion project hosts at least seven parallel gold and silver vein zones within an area of highly anomalous soil geochemistry that measures about 1.5 km by 1 km (0.9 mi by 0.6 mi). Two of these zones, the Mitchell and Sheba have been outlined along hundreds of meters of length by previous exploration efforts since 1900, including numerous trenches and shallow shafts, direct shipping of hand selected silver-rich ore (7.2 tonnes averaging 6090 g/t silver = 178 oz/ton), soil geochemistry and geophysics. Only three shallow drill holes, directed at the high-grade silver, have previously been drilled on the property. It is expected that further surface work on the other parallel zones will result in additional drill targets, possibly during the 2007 program.
Work at JAE in 2006 included extending the soil geochemical anomaly to the southwest, mapping and chip sampling various new and existing trenches, and processing two bulk samples from the Mitchell and Hunker Dome zones. The Mitchell sample consisted of 5.7 tonnes of rusty schist without quartz veining, and returned 1.3 g/t gold. This indicates potential for bulk mineable material beyond the higher grade veins. The Hunker Dome zone bulk sample consisted of 2.3 tonnes across several narrow quartz veins, and returned 4.0 g/t gold.
Klondike Star tested claims to the southeast of the JAE area with widespread MMI soil geochemical survey lines, identifying several large areas of gold in soil anomalies, up to 500 meters by 1000 meters. The surveys successfully confirmed some areas with known mineralization, and identified new areas with no evidence of previous exploration.
For additional information on project-specific mineral rights and exploration activity, see press releases below and refer to the Management’s Discussion and Analysis contained in quarterly SEC filings. Go to Reports and SEC filings under Investor Relations, or, go to www.sec.gov under “filings and Forms (EDGAR),” click on “Search for Company Filings,” then on “Company & Other Filers.” Enter “KDSM” in the CIK box and locate 10-QSB or 10-KSB filings.
