Gold Explorer Makes Moves in Canada’s Untapped North

(Image via Blue Star Gold. Click image to enlarge)

Global gold mining activity has been heating up lately, and Canada is no exception. The focus of mining in the country has traditionally been on British Columbia and Quebec, but investors and companies are increasingly realizing the impressive abundance of resources in the country’s Northern territories.

In the past, some companies balked at perceived difficulties of operating in the North. Gold exploration companies like Blue Star Gold Corp. (TSX-V:BAU,Forum), however, are showing how to get things done.

Last week, the Company announced that its fall exploration program in Nunavut is fully underway. The program focuses on the Company’s Hood River property with diamond drilling, core logging and cutting, and additional sampling and mapping on the Ulu regional fold. Key for the Company’s plans is a focus on past results. The priority drilling target is the North Fold Nose gold zone (“NFN”), where the current diamond drilling is in-filling and expanding previous high-grade results.

BHP Group Limited (NYSE:BHP) tested the NFN with 5 diamond drill holes starting in 1990, with one drill hole intersecting the NFN on the east fold limb and returned 6.03m grading 7.31 g/t (grams per tonne) Au, including 25.63 g/t Au over 1.54m at a vertical depth of 60m. A year later, another drill hole was drilled underneath the former and returned 9.16 g/t Au over 6.88 m, including 54.94 g/t Au over 0.95m and 0.25m grading 18.2 g/t Au at a vertical depth of 95m below surface.

Stephen Wilkinson, CEO and President of Blue Star, commented on the specific exploration plans the Company has undertaken:

For the Blue Star team, this latest round of drilling is a substantive increase of momentum. After a protracted time working with the local licensing bodies of the Kitikmeot Inuit Association (KIA) and the Nunavut Water Board (NWB) to acquire the proper licenses, it marks the Company’s most substantive work over the last few years.

Receiving licenses and mobilizing crews for one project is all well and good, but being trusted for continued operations is far more important. Blue Star’s experienced management clearly understood that importance as the Company worked extensively in the leadup to the exploration program to involve the local community and authorities.

Now, Blue Star can focus efforts on realizing the potential of Blue Star’s Hood River property. Spreading across 8,015 hectares just over 500 km north of Yellowknife, the Company acquired 100% ownership of the property in 2014 and identified more than 22 gold targets.

The area is well-known but under-explored; only 33 drill holes were recorded, including BHP’s earlier foray. In 2014, Blue Star sampled the area at the North Fold Nose itself with 18 channel samples that graded 6.94 g/t Au and 7.66 g/t Ag on an average width of 0.92m.


(Image via Blue Star Gold. Click image to enlarge)

And the Hood River property may end up being just the tip of Blue Star’s iceberg. The Company looked to add to its portfolio on July 29 when it exercised an option to acquire 100% interest in the Ulu Gold Project directly adjacent to the Hood River property in Nunavut.

With the 947-hectare Ulu Gold property comes permanent infrastructure including an airstrip and camp site, several drill targets identified, and a NI43-101 resource estimate. Using a 4 g/t gold cut-off value, the Indicated gold resource is 605,000 ounces and 226,000 inferred ounces. Furthermore, the deepest drill intersection at the property assayed 14.9 g/t Au over 7.7 m at a vertical depth of 610 m which is beneath the estimated resource and indicative of the zone’s potential for resource expansion.

Completing the acquisition of Ulu Gold from Mandalay Resources Corp. (TSX:MND) would, simply put, further bolster Blue Star’s portfolio for further work down the road. The property already has a permitted mining lease, an agreement with the Kitikmeot Inuit Association and the Nunavut Water Board.

Thanks to the workings of the deal, the acquisition also presents an interesting financial opportunity for Blue Star. Completing the acquisition requires a final payment of $450,000 but transfers a $1.7 million remediation account from Mandalay to Blue Star that the former had agreed to set up with the KIA and NWB.

It’s clear that exploration programs aren’t the only things ramping up at Blue Star. An increased understanding of the Hood River property and the progressing acquisition of the Ulu Gold property come alongside a $3.0 million private placement of debenture units that is completed and awaiting exchange approval.

At the same time, the Company’s projects are also set to have their infrastructure support increased. Both projects are located directly on Phase I of the proposed Grays Bay Road Project, a $550 million construction of an all-weather road that the KIA and the Government of Nunavut support.

For Blue Star’s investors, the commencement of the exploration program is a major step in delivering on the Company’s strategy. The experienced management team clearly understands how important it is to follow through on plans in the correct way. Given the other developments happening around the Hood River property, it seems like they’re right on track.



FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.