Chief Danny

Prospect, Active

Alternative names

Peak Zone

Commodities and mineralogy

Main commodities Ag; Au; Cu
Other commodities As; Bi; Co; Mo; Sn; Te; W
Ore minerals arsenopyrite; chalcopyrite; gold; malachite; native copper; pyrite; pyrrhotite
Gangue minerals quartz

Geographic location

Quadrangle map, 1:250,000-scale TC
Quadrangle map, 1:63,360-scale A-4
Latitude 63.1795
Longitude -142.9162
Nearby scientific data Find additional scientific data near this location
Location and accuracy The Chief Danny prospect is centered about 0.9 mile west-southwest of VABM 3345 'Tetlin', on the crest of the Tetlin Hills about 8 miles northwest of the center of Tetlin Lake. It covers much of the southwest quarter of section 10, T. 16 N., R. 13 E., of the Copper River Meridian. The location is accurate to within 500 feet.

Geologic setting

Geologic description

The Chief Danny prospect was first identified in 2009 in the search for the source of anomalous panned-concentrate stream-sediment samples (Contango Ore Inc., 2012). The prospect is divided into several zones with the Peak Zone in the east-central area. Samples collected in trenches along a zone 0.5 mile long contained up to 9 grams of gold per tonne and 1 percent copper. The samples also contained anomalous silver, arsenic, bismuth, tellurium, and tungsten. Soil augering and geochemical surveys in 2010 and 2011 expanded the potential area of mineralization. Eleven holes were drilled in 2011 that totaled 8,057 feet; 5 holes were in gold-copper mineralization. The notable intercepts were: 1) 10 feet with 0.94 gram of gold per tonne, 1.1 gram of silver per tonne, and 0.03 percent copper; 2) 21.2 feet with 7.4 grams of gold per tonne, 4.9 grams of silver per tonne, and 0.15 percent copper; and 3) 12 feet with 3.1 grams of gold per tonne, 300.2 grams of silver per tonne, and 0.26 percent copper. A 70-foot sample in a trench contained 0.69 gram of gold per tonne, 8.60 grams of silver per tonne, and 0.38 percent copper.
There is little detailed mapping in the area. Foster (1970) indicates that the rocks in the area are mainly Paleozoic or Precambrian biotite gneiss and schist or Paleozoic phyllite and schist. A cross-section through the drill holes (Contango Ore Inc., 2012) indicates that the rocks are mainly greenstone and schist. The deposit is centered on a strong magnetic low.
District and regional scale northeast and northwest trending faults are present on the project and are often associated with gold and copper mineralization in this terrane. The Peak zone is a distal, reduced gold skarn deposit, possibly related to a larger porphyry copper-gold system outlined by a 6.5 kilometers by 5.5 kilometers zoned soil anomaly. Peak zone mineralization consists of free gold in disseminated to semi-massive pyrrhotite, chalcopyrite, and arsenopyrite with an amphibole and chlorite alteration envelope (Avalon Development Corporation, 2014). Anomalous silver, bismuth, cobalt and sporadic anomalous molybdenum and tin are also found within the Peak Zone (Freeman, 2014).
Geologic map unit (-142.91841845204, 63.1791496684406)
Mineral deposit model Gold-copper skarn (Cox and Singer, 1986; model 18b)
Mineral deposit model number 18b
Age of mineralization Illig (2014) has dated skarn mineralization at the Peak zone to 70 million years.
Alteration of deposit In some locations, free gold is associated, within and adjacent, with banded pyrrhotite in chlorite-amphibole alteration (Freeman, 2014).

Production and reserves

Workings or exploration
The Chief Danny prospect was first identified in 2009 in the search for the source of anomalous panned-concentrate stream-sediment samples (Contango Ore Inc., 2012). Subsequently, samples were collected in trenches along a zone 0.5 mile long. Soil augering and geochemical surveys in 2010 and 2011 expanded the potential area of mineralization. Eleven holes were drilled in 2011 that totaled 8,057 feet. Five of eleven holes reached gold-silver-copper mineralization. In 2012, Contango conducted 36,000 feet of drilling, discovering a new high grade 'Peak Zone' skarn. In 2013, Contango conducted 47,000 feet of drilling, expanding the Peak zone (Freeman, 2014).
Significant Peak zone intercepts include 99.9 meters grading 3.935 grams of gold per tonne, 8.4 grams of silver per tonne and 0.104 percent copper in hole 12016 (discovery hole), 58.53 meters grading 14.452 grams of gold per tonne, 9.1 grams of silver per tonne and 0.243 percent copper in hole 12018, 44.2 meters grading 15.962 grams of gold per tonne, 11.0 grams of silver per tonne and 0.267 percent copper in hole 12036, 64.8 meters grading 13.101 grams of gold per tonne, 21.0 grams of silver per tonne and 0.482 percent copper in hole 13062, 138.02 meters grading 3.626 grams of gold per tonne, 11.4 grams of silver per tonne and 0.113 percent copper in hole 13088, 159.25 meters grading 7.010 grams of gold per tonne, 6.6 grams of silver per tonne and 0.102 percent copper in hole 13107, 96 meters grading 9.060 grams of gold per tonne, 4.3 grams of silver per tonne and 0.093 percent copper in hole 13110, and 134.82 meters grading 4.848 grams of gold per tonne, 2.9 grams of silver per tonne and 0.084 percent copper in hole 13117 (western limit of current drilling). High grade mineralization remains open to the west and at depth (Avalon Development Corporation, 2014).
A resource estimate was completed in 2013 for the Peak zone. The resource came from 78 of 140 holes, totaling 16,010 meters of drill core. An indicated resource with a 0.5 gram of gold per tonne equivalent cut-off yielded 5,970,000 tonnes at 3.46 grams of gold per tonne, 11.8 grams of silver per tonne, 0.25 percent copper, and a gold equivalent at 4.08 grams per tonne. The inferred resource also used a 0.5 gram of gold per tonne equivalent cut-off and yielded 3,850,000 tonnes at 2.07 grams of gold per tonne, 14.28 grams of silver per tonne, 0.23 percent copper, and 2.69 grams of gold per tonne equivalent (Freeman, 2014).
Peak Gold, LLC is a joint venture formed in 2015 between Contango ORE Inc. and Royal Alaska, LLC, a wholly owned subsidiary of Royal Gold Inc., to explore the Tetlin project area south of Tok, which contains the Peak and North Peak polymetallic gold-silver-copper skarn deposits (TC040), and numerous other prospects and prospective targets (including TC041). Royal Alaska has the option to invest up to $30 million through October 2018 to earn up to a 40 percent interest in the joint venture; through December 31, 2016, Royal Alaska has earned a 20.6 percent interest (Athey and Werdon, 2017).
With a budget of $11 million aimed at expanding the gold- and copper-rich skarn deposits in the Tetlin project area, Peak Gold conducted Alaska’s largest exploration program for 2016. Peak Gold completed a three-phase drilling program: 19 core holes drilled in Phase I, 62 holes in Phase II, and 37 holes in Phase III, for a total of 20,522.8 m. The 2016 drilling traced a roughly 2,000-meter-long arc of contiguous, high-grade skarn mineralization, which is about three times the footprint of the Peak deposit described in Contango’s 2013 initial resource. One hole drilled in the 2016 expansion area cut three gold-rich intercepts, including 38.88 meters averaging 51.62 grams of gold per tonne from a depth of 14.5 m, which was the best intercept at Tetlin in terms of high grades over broad widths. The North Peak area remains open to expansion on the northwest and southeast portions, as the last holes drilled were still in gold bearing skarn (Athey and Werdon, 2017).
Indication of production None
Reserve estimates
A resource estimate was completed in 2013 for the Peak zone. The resource came from 78 of 140 holes, totaling 16,010 meters of drill core. An indicated resource with a 0.5 gram of gold per tonne equivalent cut-off yielded 5,970,000 tonnes at 3.46 grams of gold per tonne, 11.8 grams of silver per tonne, 0.25 percent copper, and a gold equivalent at 4.08 grams per tonne. The inferred resource also used a 0.5 gram of gold per tonne equivalent cut-off and yielded 3,850,000 tonnes at 2.07 grams of gold per tonne, 14.28 grams of silver per tonne, 0.23 percent copper, and 2.69 grams of gold per tonne equivalent (Freeman, 2014).
Contango’s December 2013 Tetlin project area report states an indicated resource of 5.97 million tonnes at a grade of 3.46 grams of gold per tonne (664,000 ounces of gold), 11.8 grams of silver per tonne, and 0.25 percent copper. In addition, there is an inferred resource of 3.85 million tonnes at a grade of 2.07 grams of gold per tonne (256,000 ounces of gold), 14.28 grams of silver per tonne, and 0.23 percent copper. These estimated resources are based on 16,010 meters of core in 78 of 130 holes, assuming prices of $1,318 per ounce of gold, $21.55 per ounce of silver, and $3.25 per pound of copper (Athey and Werdon, 2017). An updated resource is planned for release in 2017.
Production notes None.

Additional comments

This prospect is on Tetlin Native lands and Contango Ore Inc. is operating under a 10-year lease with the Tetlin Village Council that begin in July 2008.
Gold equivalent was calculated using gold at 1,318 US dollars per ounce, copper at 3.25 US dollars per pound, and silver at 21.55 US dollars per ounce (Freeman, 2014).

References

References

Avalon Development Corporation, 2014, Tetlin Gold-Copper-Silver Project, January 2014 Summary: http://www.avalonalaska.com/Tetlin_Project_Summary-Jan2014.pdf (as of June 3, 2014).
Contango Ore Inc., 2012, Corporate overview: http://www.contangoore.com/presentations/20120206.pdf (February, 2012).
Freeman, C., 2014, Geology and Mineralization of the Peak Zone Au-Cu-Ag Deposit, Tetlin Project, Alaska, for Avalon Development Corp and Contango ORE Inc.: http://www.avalonalaska.com/CordRoundup-Tetlin_Summary-26Jan14_noTTF-Final.pdf (as of June 3, 2014).
Illig, P., 2014, Alaska's Newest Gold Deposit: Mineralization and geochemistry of the Peak Zone Distal Gold Skarn,Ttetlin Project, Tok, Alaska, Avalon Development Corporation: http://www.contangoore.com/presentations/Illig-spring_2014-AMA-final-lowres.pdf (as of June 4, 2014).
Reporters D.J. Grybeck (Contractor, USGS); V.C. Zinno (Alaska Earth Sciences, Inc.); M.B. Werdon (DGGS)
Last report date 8/26/2017