Coal Canyon

Summary

The Coal Canyon sediment hosted gold project consists of 64 unpatented lode claims in the heart of the Cortez Trend. The property is 10 miles (16 km) south of Barrick's Cortez Hills gold deposit and it adjoins the northeast side of US Gold's Tonkin Springs property (Figure 1). The property occupies two square miles (5.2 sq km) of the Windmill lower-plate window, a feature that exposes favorable carbonate rocks that are analogous to carbonate rocks that host the Cortez Hills and Pipeline gold deposits.



Location

The Coal Canyon gold project is located in west-central Eureka County, Nevada along the Battle Mountain-Eureka mineral trend. The region is typified by north-northeast trending mountain ranges separated by broad, alluvium filled valleys. The property is on the northwest flank of the Simpson Park Mountains and extends into Pine Valley. Elevations range from 5,000 ft (1,525m) to 7,500 ft (2,286m). Access to the property is excellent via secondary roads and tracks branching off Highway 278. Nearby towns include Elko (85mi/136km to the northeast), Carlin (65 mi/104 km to the north) and Eureka (60mi/95 km to the south). The property is currently held by Miranda via a lease agreement with Nevada North Resources.

Coal Canyon is proximal to economic gold mines, newly discovered gold deposits and previously operating mines,owned by other companies, including: the Pipeline mine complex (+20.0M oz), Cortez Hills/Pediment (12.0M oz), Cortez mine (1.4M oz), Horse Canyon mine (0.8M oz), Buckhorn mine (0.4M oz), Tonkin Springs mine (1.7M oz), and Gold Bar (1.0M oz).

Geology

The Battle Mountain-Eureka mineral trend is a 90 mile long (145 km), north-northwest alignment of predominantly carbonate-hosted gold deposits in north-central Nevada. Examples include the Pipeline mine complex, Cortez Hills, Archimedes, Gold Acres, Horse Canyon, Marigold/Millennium and Gold Bar. Disseminated gold deposits are hosted in Ordovician through Devonian sedimentary rocks, but seem to blossom in Silurian and Devonian-age carbonate rocks. The Battle Mountain-Eureka Trend is also famous for a world class gold-base metal skarn deposit (Fortitude/Phoenix), and a Climax-type porphyry molybdenum deposit (Mt. Hope). Gold deposits (Buckhorn, Mule Canyon) hosted in Miocene basalt occur in the Northern Nevada Rift. The Battle Mountain-Eureka mineral trend is 39 miles (62 km) southwest of a prominent, 40 mile long (64 km), +100 million ounce gold belt known as the Carlin Trend.

Five distinct rock packages occur on the project. They include:
  • Rhyodacite lava flows exposed in the central portion of the property.
  • Basalt dikes.
  • Igneous dikes of undetermined age. Altered igneous dikes crop out in a north-south drainage in the northwest portion of the property and they have been intersected in recent drilling. Dikes are lathy-textured, contain irregular quartz pheno/xenocrysts, and strike west-northwest. Hydrothermal alteration includes disseminated limonite, clay-altered feldspars, and silver-green color mica (Figure 2). Lathy textures and green micas (chromium/nickel-bearing) are typically associated with lamprophyre dikes proximal to / or within gold deposits of the Cortez and Carlin districts. The dikes may reflect a previously unrecognized dike swarm/structural corridor favorable for disseminated gold mineralization.
  • Upper-plate sedimentary rocks of the Vinini Formation. Chert, mudstone and greenstone flows are exposed in the southern portion of Coal Canyon.
  • Lower-plate, Ordovician to Devonian age carbonate rocks dominated by silty to muddy turbiditic limestone, dolomite, and lesser quartzite. These rocks are included in the Wenban, Roberts Mountains, Hanson Creek and Eureka Formations. At Coal Canyon, lower-plate carbonate rocks crop out or are covered by younger volcanic rocks. Lower-plate carbonate rocks are the primary hosts for multi-million ounce, disseminated gold deposits on the Cortez and Carlin Trends of north-central Nevada.
At surface west-northwest, northwest and northeast-striking faults transect the property. Mapping indicates these faults focus hydrothermal alteration and zones of elevated gold, arsenic and antimony (Figure 3 and 4). The northwest-striking Grouse Creek fault focuses igneous dikes, hydrothermal alteration and concentrations of potentially economic gold. The Grouse Creek fault and a west-northwest striking fault-fold corridor will continue to be a focus of exploration, particularly where these structures intersect favorable lower-plate stratigraphy.







Exploration History

The Coal Canyon area has a long exploration history including work by Homestake, Amselco, Cordex, Fischer Watt, American Copper and Nickel Company, Great Basin, Kennecott, Golden Aria and most recently Queensgate Resources. These operators completed 89 drill holes, of which only 20 holes were drilled on the current Coal Canyon project (Figure 5).



Past exploration focused on the northwest-trending Grouse Creek fault that lies on ground controlled by others, adjacent to the southwest margin of Miranda's property. Historic drilling along this fault encountered gold mineralization up to 85 feet of 0.022 oz Au/t (26 m of 0.753 g Au/t) in the Hanson Creek dolomite and the underlying Eureka Formation. In this setting, gold mineralization is associated with altered dikes, iron oxides, breccias and silicification.

Joint Venture Exploration

Geophysical surveys conducted by Golden Aria demonstrate the Grouse Creek fault-controlled gold mineralization correlates with gradient resistivity and self-potential geophysical anomalies. Conceptual targets inferred from these geophysical responses are for broad zones of silicification enveloping vertically-extensive, oxidizing sulfides, which could represent pyritic dikes within gold-bearing fault zones. Compilation of geophysical data, surface mapping and geochemical sampling illustrate untested targets that warrant follow-up drilling.

Golden Aria completed a two-hole drill program totaling 2,020 ft (615m) in late 2006 (Figure 5). Drill holes MCC-1 and MCC-2 were designed to test resistivity and self-potential anomalies at the intersections of altered fault zones, in favorable lower plate carbonate rocks. The holes intersected six, 30 ft (9.1m) to 200 ft (61m)-thick zones of moderately decalcified, and variably silicified/clay altered silty limestone; however both holes did not test the entirety of their target horizons due to poor drilling conditions. Neither of the holes intersected significantly anomalous gold mineralization. The agreement between Miranda and Golden Aria was terminated in March 2007.

Queensgate's 2008 exploration program included property-wide geologic mapping, soil and rock geochemical surveys, and 1,950 ft (594.5 m) of reverse-circulation drilling in two vertical holes (MCC-3 and MCC-4) (Figures 5 and 6). Drilling tested for disseminated gold mineralization in hydrothermally-altered and geochemically-anomalous zones developed at north / northeast-striking fault intersections within the Roberts Mountains and Hanson Creek Formations. Drilling also established depths of favorable stratigraphic horizons.



Hole MCC-4 intersected hydrothermal alteration in the form of decalcification, silicification, sooty pyrite cemented breccias, quartz-dolomite veins and disseminated sphalerite in the middle and lower Hanson Creek Formation. The hole intersected 10 ft of 0.011 oz Au/t gold from 980 to 990 ft (3.0m of 0.392g Au/t from 298.8 to 301.8 m) within a sooty pyrite / silica-cemented breccia zone. This mineralization occurred within a larger, lower-grade gold zone that returned 230 ft of 0.004 oz Au/t from 970 to 1,200 ft (70.1m of 0.140g Au/t from 295.7 to 365.8m). The hole ended at 1,200 ft (365.8m) in anomalous gold mineralization.

Results from MCC-4 are significant as they represent the first subsurface, Carlin-style, disseminated gold mineralization on the current Coal Canyon claims. Geologic interpretations indicate the hole is on the south limb of a southeast-plunging anticline, within a larger west-northwest striking fold-fault corridor (Figure 3). Anomalous gold and hydrothermal alteration in MCC-4 may be related to the combination of: the plunging anticline; NE, WNW and N-S high-angle faulting, and low-angle / subsurface thrust faulting. Additional drilling is recommended in this west-northwest corridor to continue testing for a sediment-hosted, disseminated gold deposit.

Queensgate's 2010 reverse-circulation drilling program consisted of 5,250 ft (1,600 m) in four holes (MCC-5 through MCC-8) (Figure 7). All four drill holes intersected hydrothermally altered intervals within carbonate rocks of the Roberts Mountains and Hanson Creek Formations. Altered lamprophyre and basalt dikes were also intersected. Although no significant gold mineralization (>0.010 oz Au/t; >0.343 g Au/t) was intersected, Miranda geologists recognize untested geologic and geochemical drill targets to the west and east of MCC-4.