MINERAL TARGET: GOLD
The Lone Star Project is an advanced-stage gold exploration property that is being studied for potential mine development. The Project consists of 1056 mineral claims and crown grants totaling 152 km2 (58.7 mi2). Lone Star is the largest project of six in the gold-producing Klondike region of Yukon, Canada.
The property is situated in the Tintina Gold Belt which spans Alaska and the Yukon and includes producing mines and major deposits. The Lone Star Project is located 20 km (12.4 mi) from Dawson City and is accessible by summer-maintained, graded gravel roads linking to the Klondike Highway.
First assembled by Canadian mine-finder Richard Hughes, the initial 500 mineral claims in the Klondike were optioned to Klondike Star in December 2003. It is the site of the former producing Lone Star Mine (1912-14) and decades of previous exploration.
Since acquiring the property, the Company has become the majority owner and operator, increased the size of the project from 500 to 1056 mineral claims and crown grants, constructed a 65-person exploration complex, with core processing and milling infrastructure on site, and completed extensive soil, chip and bulk sampling, diamond drilling, IP (induced polarization) geophysical surveys, assay and other analysis.
Exploration results and professional analysis to date indicate that the Lone Star Project represents an extensive mineralized area with a large-tonnage, low-grade gold target augmented by higher grade zones that warrants an expanded exploration effort and intensive evaluation for potential mine feasibility and development. The Company is working towards a mineral resource assessment consistent with industry and international standards and best practices.
Assay results from the 2005 exploration season were released sequentially October 6, 2005 to January 24, 2006. During the May to October, 2006 summer exploration program, the focus was on diamond drilling, bulk sampling, and ground and airborne geophysical surveys along with continuation of the Klondike Research Project with the Canadian University of British Columbia Mineral Deposit Research Unit (UBC MDRU).
Diamond drilling is delineating the extent of the known gold-bearing ore body in the primary zones of interest, including the Lone Star and extensions, the Buckland Shear between Gay Gulch and 27 Pup, and the Nugget Zone above Oro Grande Gulch.
A scoping study is in progress to assess the economic viability of the Lone Star mineral deposit, provide a baseline assessment of environmental and socio-economic considerations, along with a base case conceptual mine design, key factors such as energy and water supply, and capital and operating cost estimates.
Progressive exploration results, including the discovery of a new target, the JF Zone, were announced between December 2006 and February 2007 and a preliminary report on the scoping study was released in March 2007. A summary report on the UBC MDRU geological studies on the Klondike region was also released in March 2007.
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.
