UPDATED JANUARY 19, 2004
|Kermode Resources Ltd.
A publicly traded company on the TSX Venture Exchange: KLM
A High Grade Carlin Style Gold Target
30+ Diamond Drill Hole Program Ongoing
Recent Drilling Results (Announced January 12, 2004)
The project has an interesting history. A prospector first discovered gold mineralization in 1983 during construction of the Cat Arm Hydro access road. Labrador Mining and Exploration carried out preliminary exploration up to late 1985 and then sold the project to BP Canada Ltd. During 1986 to 1990 BP carried out intermittent gridding, mapping, soil sampling, prospecting and some geophysics over about one third of the original property. From 1985 to 1991 BP drilled 63 holes. Up until that point the exploration program was driven by the extremely favorable results. In 1991 BP made a corporate decision to discontinue mineral exploration in Canada and ceased work on all projects including Jackson's Arm. The property remained idle from 1991 to 1999 when licenses expired due to lack of work credits. It was at this time that South Coast Ventures immediately staked the ground. With a rising gold market this property once again comes into the limelight as a special property with great potential.
The project is in Canada. Located in northwestern Newfoundland, the Jackson's Arm property is 3 km west of the fishing village of Jackson's Arm and is linked by paved road 75 km to the Trans Canada Highway. The northeastern limit of the property is on tidewater. The Cat Arm hydroelectric site road provides access through the complete 17 km length of the property. The mining exploration friendly tax environment within Canada and Newfoundland provides federal and provincial tax credits that will be available to Kermode investor's. Exploration tax benefits are available to the company from the province, which will provide additional financing to the company.
The project is affordable. Kermode has the option to earn 100% in the Jackson's Arm property.
In the summer of 2002 Kermode announced the option agreement with South Coast Ventures. Consequently, Kermode must spend an aggregate of $2,000,000 on exploration over a five and a half year period and pay $285,000 and 570,000 shares of Kermode over a four-year period. The property is subject to a 3% net smelter return, 1.5% of which is recoverable for $1.5 million dollars.
Since acquiring the property Kermode has staked additional ground, extending the property boundaries to the southeast and north.
The company's primary objective is to find a Carlin-style fracture controlled-sediment hosted disseminated gold deposit at Jackson's Arm. Previous exploration efforts on the property were primarily focused on a bulk tonnage granite hosted gold target. The gold mineralization identified in drill and trench samples collected from the surrounding sedimentary rocks was largely ignored. Nevertheless, the property has the added potential to host both a high-grade structurally related gold deposit and a bulk tonnage gold deposit. Kermode's drill programs will be tailored to test these three prospective gold targets concurrently.
The Jackson's Arm acquisition is in the Major Leagues in terms of upside potential. Previous sustained work by BP Exploration from 1985 to 1991 totalling 63 drill holes (8700 meters of core available for review and further analyses), 4 established gold zones, and most importantly, previously overlooked in the drill logs, a definitive section of drill log and assay information clearly demonstrating the projects immense potential for Carlin style gold mineralization.
Over the past year Kermode carried out a property wide geochemical and prospecting program. This program identified numerous geochemically anomalous areas, which have been recently covered by detailed soil-till sampling. Consequently, a number of new potential targets, with Carlin style pathfinder elemental signatures, have been identified. Kermode started an extensive diamond drill program in December of 2003. When complete, this initial drill program will likely boast more than thirty shallow holes. The current strategy is to limit the depth of these holes to less than 150 meters, on average.
The company recently completed financings for a total of 1.05 million dollars. These funds are being used to fund the First Phase Drill Program.