Unexplored Zone Shows Signs of Significant New Gold Mineralization

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We are pleased to present an explanation of significant Tertiary sill- and Cretaceous Aspen Formation-hosted gold intercepts drilled during 2015–2016 at its Kilgore Gold ProjectThese gold intercepts define a significant, previously unrecognized and under-explored target that collectively delineate a broad zone of gold mineralization, now known as the “Aspen Corridor,” which underlies the existing Kilgore Deposit. Dimensions of the corridor, as currently defined by the drill results, are approximately 460-metres-long by 120-metres-wide, and from 60- to 135-metres-thick. Mineralization remains open to the northwest and southeast and at the bottom of many holes.

These holes encountered some of the highest gold grades and thickest gold intercepts discovered at Kilgore to date.

Aspen Corridor map at Kilgore
Aspen Corridor map at Kilgore

Map of the Aspen Corridor. View in full size here.

The discovery of this new class of mineralization was subsequent to the discovery of the gold within the current resource estimate for the Kilgore Deposit, the bulk of which is hosted in the overlying Tertiary volcanic rocks.

In the 2015 and 2016 drill programs, 34 of 37 holes drilled into the target encountered significant gold mineralization for an overall success rate of 92%.

Based upon the results of this drilling, further exploration along the mineralized Aspen Corridor is planned for 2017.The Aspen Formation sediment-hosted gold mineralization represents a emerging target on the edge of the Kilgore Volcanic Caldera complex similar to the setting for gold mineralization at the Round Mountain Mine located on the edge of another volcanic caldera complex in Nye County, Nevada and which has produced over 16 million ounces of gold to date.  The Aspen mineralization is analogous to Type IV ore at Round Mountain that underlies the caldera-related volcanic pile.  The Tertiary Sill unit directly lies between the overlying volcanic rocks (which hosts the majority of the existing Kilgore Deposit) and the aforementioned Aspen Formation.

Noteworthy Aspen Corridor intercepts from Otis’ 2015 drilling include:
  • 47.2 m of 2.41 g/t Au in hole 15 OKR-304 (stopped in mineralization)
  • 50.3 m of 4.24 g/t Au in hole 15 OKR-308 (stopped in mineralization)
  • 94.5 m of 4.21 g/t Au in hole 15 OKR-309 (stopped in mineralization)
Noteworthy Aspen Corridor intercepts from Otis’ 2016 drilling include:
  • 30.5 m of 5.37 g/t Au in hole 16 OKR-315 (stopped in mineralization)
  • 120.4 m of 1.55 g/t Au in hole 16 OKR-318
  • 85.4 m of 2.50 g/t Au in hole 16 OKR-338
  • 69.1 m of 2.07 g/t Au in hole 16 OKR-348 (stopped in mineralization)
  • 120.4 m of 1.18 g/t Au in hole 16 OKC-349
  • 128.0 m of 1.79 g/t Au in hole 16 OKC-353
  • 80.8 m of 1.87 g/t Au in hole 16 OKC-354

For detailed information relating to these intercepts can, have a look at Table 1 in February 9th’s press release.

Aspen Corridor Cross Section

A representative cross section has been prepared to help you better understand the significance of the Aspen Corridor to the Kilgore Deposit:

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Highlights of 2015 and 2016 Aspen Corridor Drill Programs
  • For the 2015 drilling, 8 of the 9 holes targeting the Sill/Aspen package intercepted mineralization.
  • For the 2016 drilling, 26 of the 28 holes targeting the Sill/Aspen package intercepted mineralization.
  • For the 2015-2016 combined drilling, 34 of 37 holes drilled into the Sill/Aspen target encountered significant mineralization for an overall success rate of 92%.
  • Results of Otis’ 2015-2016 drill campaigns support the premise that gold mineralization in the Aspen Formation is more extensive than indicated by previous drill testing and appears to lie along a northwesterly-trending belt or corridor in the northern half of the Kilgore Deposit, much of which remains open for further drilling.
  • Results of drill holes targeting the basement Aspen Formation host rocks continue to reveal the presence of significant open-ended mineralization that is typically higher-grade and displays thicker mineralized intercepts than those comprising the current bulk of the Kilgore Deposit in the overlying volcanic host rocks.
  • Reported intercepts in basement Aspen Formation rocks demonstrate that mineralization exists to depths of up to 300-metres below the surface of the Kilgore Deposit, with some still open at depth.
  • The Tertiary intrusive sill, which directly overlies the Aspen Formation and locally intrudes the upper portion of it, is also a host to significant mineralization and the extensive contact between the two rock units is an important site for locating additional mineralization in the basement. Significant intercepts can and do exist in both the Aspen Formation and the sill, and in many cases straddle the contact between them to occur continuously throughout both units.
  • Most of the sill- and Aspen-hosted mineralization in Table 1 is relatively shallow (115- to 130-metres deep) as it occurs in an up-faulted horst block in the northwest half of the Aspen Corridor and is up-faulted and closer to the surface in the southeastern half of the Corridor.
2015 and 2016 Drill Program Background

In 2015, nine holes were drilled in northern end of the Kilgore Deposit to test for potential mineralization in the sill and Aspen Formation sedimentary rocks underlying the main Tertiary volcanic host rock package. Eight of the nine holes encountered significant mineralization. In 2016, a 40-hole program was designed to follow-up on the success of the 2015 program. Drill sites were chosen from an updated set of geologic cross sections and long sections containing all historic results through 2015 to further test the target. Based on these sections, drill holes were selected to test mineralization at depth in the Aspen Formation and to infill and define the limits of the current resource. Selected hole locations targeting the Aspen Formation at depth were focused along the Main Road, Segment 1 Road, North Road and “B” Road areas (the location of the previously mentioned drilling completed in 2015).

All analytical work was performed by ALS Chemex Labs located in Reno, Nevada and Vancouver, British Columbia that have quality management system certification and technical capability accreditation. A 50-gram pulp of all samples was assayed for gold by Fire Assay/AA finish methods. Certified reference materials, duplicates, and blanks were inserted into the sample stream for quality control.  Intercepts reported in Table 1 are calculated using a 0.25 g/t Au cutoff grade and may include a few internal waste intervals less than this cutoff. The RC drilling reported in this release was conducted by O’Keefe Drilling, Inc., Butte, Montana, employing a Foremost 650 Reverse Circulation drill rig outfitted with a circulating wet splitter. The core drilling was conducted by Timberline Drilling of Hayden, Idaho employing two rigs, a DE-140 NQ core rig and an LF-90 HQ core rig.  The Qualified Person under National Instrument (NI 43–101) Standards of Disclosure for Mineral Projects for this News Release is Paul D. Gray, P. Geo, who has reviewed and approved its technical content.

Interested in learning more about Kilgore? These articles may be of interest:

Results for 12 Drill Holes Confirm the Presence of Gold at Kilgore

Kilgore Gold Mine Project On The News

A Remarkable Year for Gold Mining Projects