Metallic Minerals Corp. announces that it has entered into a production royalty agreement covering a total of four additional miles of valley bottom and bench alluvial claims in two blocks of its Australia Creek property.
The Company has granted exclusive mining rights to an experienced alluvial mining operator in exchange for a 10% royalty on all gold production. The property is road accessible and permitted for large-scale alluvial gold production. The operator mobilized mining equipment to the site and has been conducting exploration work including drilling and bulk sample test pit development, which has confirmed the presence of significant alluvial gold.
Metallic Minerals now has approximately 6 miles out of its 26 miles of holdings on Australia Creek under production royalty agreements with an additional mile of its Dominion Creek claims also under agreement. The Company has received royalties from test mining activities carried out in both 2017 and 2018 and will receive annual advanced minimum royalties on the properties once they begin full commercial operations.
Australia Creek is part of the historic Klondike gold district that is estimated to have produced over 20 million ounces of gold since its discovery. Australia Creek and its benches are now recognized by Yukon Geological Survey as an eastern continuation of the highly productive Indian River drainage, which is the largest placer gold producing area in the Yukon. Mining on the Indian River began in the late 1970s and has produced more than 40% of all placer production in the Yukon through 2015. With the expansion of larger-scale, open-pit operations, alluvial production on the Indian River has doubled since 20101.
Despite extensive mining activity nearby, Australia Creek itself was never historically mined due to its importance as a source of water and hydro-electric power for supporting the very large scale, floating dredge operations that were being conducted in the area by Yukon Consolidated Gold Company (YCGC) which operated in the Klondike Region between 1920s and 1960s. The dams on Australia Creek have been removed with only the historic diversion channels now remaining. YCGC did limited exploration churn drilling at the mouth of Australia Creek, but no further exploration up the drainage. The mouth area is being actively mined at present and auger drill holes on Lower Australia Creek have returned values in the gravels similar to other parts of the Indian River, with initial test pits in 2015 to 2018 confirming the presence of alluvial gold.
Yukon Geological Survey (“YGS”) Yukon Placer Mining Industry Report 2010-2014
Over the past five months, Metallic has completed exploration work within the broader Australia Creek drainage that has converted approximately 22 miles of placer leases into claims building on the Company’s substantial holdings in the district. The Company received a Yukon Mining Exploration Program (YMEP) grant for exploration and alluvial testing and initiated a program of ground resistivity geophysics, auger drilling and bulk sampling to characterize the potential for alluvial production on less explored parts of the drainage.
Metallic has initiated alluvial mine permit applications on the northern Melba Creek drainage of Australia Creek, as well as an additional five miles of the middle Australia Creek drainage, along with a further three-mile-long tributary on the southern side of middle Australia Creek. The Company is currently in discussions with additional experienced operators on further production royalty agreements on these highly prospective areas.
Greg Johnson, CEO and Chairman of Metallic Minerals, noted, "We are very pleased to have signed production royalty agreements on two additional blocks of our Australia Creek holdings. The Indian River drainage is one of the most productive alluvial gold producers in the Yukon and the Australia Creek drainage system is one of the only large-scale drainages to the Indian River that remains virtually unmined in the prolific Klondike Gold District. We are pleased to have attracted another high-quality operator on these two blocks of the lower Australia Creek drainage. Metallic is currently in discussions with other potential operators for additional production royalty agreements on further blocks from the Company’s large Australia Creek land package, as well as our other holdings. The Company receives on-going royalty payments from test mining activities as the properties progress into full production. We see the opportunity to build a substantial gold production royalty business in the Klondike Gold District over time as an attractive business complement to our focus as one of the leading high-grade silver explorers in the Yukon.”