Exploration commenced with discovery of the Silver King mine in 1886 and later the rich Athabasca gold mine in 1896. The resulting gold rush lead to the establishment of the city of Nelson, and discovery of a number of smaller gold mines. Included on the Kena property are the Gold Cup, Euphrates, Three Friends, Noman A/B veins, Dighem, Princess, Cariboo, Great Western, Daylight-Berlin, Victoria-Jessie, Starlight, North Star, Toughnut and Athabasca Mine, all of which have historic gold workings. The Property also includes the historic high grade copper and silver producer, the Silver King Mine which has been decommissioned.
The Kena Property has been worked by a number of exploration companies from 1974 to 1991. No work had been done on the property from that time until Apex Resources acquired it in late 1999. Previous work on the property included geology, geochemistry, geophysics, trenching and drilling. Prior drilling concentrated on the Kena Gold Zone, with smaller programs carried out on the Kena Copper Zone, the Dighem Zone and the Shaft showing.
During exploration programs completed over the past four years, Apex Resources has discovered a large area of gold mineralization associated with the Silver King intrusive and its contact areas. Narrow high-grade gold shoots within broad envelopes of lower grade gold mineralization occur within this system. Geology, gold soil geochemistry, surface and trench rock samples, and geophysical surveying all indicate the presence of a zone, some 3000 metres in length and up to 1400 metres in width that is host to significant gold mineralization. This zone is termed the Gold Mountain Zone.
Gold showings have therefore been recognized on the historically worked Kena Gold, Kena Copper and Cat/Shaft Zones, and the newly discovered Gold Mountain Zone, and also on the numerous additional old mines and claims referred to above.
In 1999 and 2000, Apex Resources optioned the Kena property and conducted exploration programs consisting of sampling of existing diamond drill core, geological and structural mapping, geochemical and geophysical surveys and excavator trenching. Results from the core-sampling program led to definition of large widths of gold mineralization in the Kena Gold Zone, with grades similar to those obtained historically (i.e. 0.3 to 2.0 g/t gold). The best previous drill hole in this zone is LK86-20, which returned 1.55 g/t gold over a 53.5 metre length.
The success of the 1999 program lead to the 2000 work program which entailed soil geochemical, magnetometer and induced polarization geophysical surveys followed by trenching over the Silver King intrusive north of Gold Creek, in an area now termed the Gold Mountain Zone. Six trenches covering an area of about 120 x 95 metres averaged 1.43 g/t gold over their entire combined length of 182 metres with assays ranging up to 11.38 g/t gold in one 3-metre chip sample. The “discovery trenches” uncovered a significant new style of gold porphyry mineralization within the Silver King intrusive.
Due to the encouraging results over the Gold Mountain Zone in 2000, an additional six trenches were excavated and a seven-hole diamond drill program was completed in June and July 2001. Drill results confirmed the depth extension of the widespread, porphyry style gold mineralization within the Silver King intrusive unit and extending across the contact into the Elise Volcanics for a short distance. Over the entire 892.5 metres drilled, core samples averaged 0.8 g/t gold (this average includes relatively barren zones within the volcanics that assayed <0.05 g/t gold), with intervals up to 28 metres grading >2.5 g/t gold and one 12 metre interval grading >4.0 g/t gold. The best 2-metre core sample from these original seven holes returned 16.34 g/t gold from hole 01GM-04.
A second drilling and exploration phase was completed on the Kena Property in late 2001 and early 2002. This exploration program consisted of expanded geochemical and induced polarization geophysical surveys, followed by 5,788 metres of reverse circulation and diamond drilling in the Gold Mountain Zone. The results of this exploration program show that the gold soil geochemical anomaly over the Gold Mountain Zone extends north and west from the initial survey area to cover an area 3,300 by 1,400 metres in size. Drilling in the discovery trench area located wide zones of “bulk tonnage type” gold mineralization with many holes returning core intervals of greater than 100 metre widths averaging better than 1 g/t gold. Also, the drill program encountered numerous “high grade” gold intervals with one or more 2 metre samples running greater than 5 g/t gold in many of the drill holes. Two “bonanza grade” intervals were found, in hole 01GM-03 where 1.23 metres assayed 240.07 g/t gold in the intrusive and in hole 01GM-08 where 2.00 metres assayed 172.10 g/t gold in the adjacent volcanic.
Work completed on the Kena Property from May to December 2002 consisted of drilling 7,598 metres in 43 diamond drill holes on the Gold Mountain, Kena Gold, South Gold, Great Western and Starlight Zones. At the same time, expanded soil geochemical surveying was done west and north on the Gold Mountain and Kena Grids to cover newly acquired claims in the Starlight, Silver King Mine and Cariboo areas. Induced polarization geophysical surveying covered the expanded Gold Mountain and Kena grids, plus the South Gold Zone. Also in 2002, Fugro Airborne Surveys were contracted to survey the main area of interest on the property, measuring about 3 by 7 kilometres in size, with airborne magnetics and radiometrics.
The Fugro survey led to the recognition of an alteration corridor that extends the length of the property. The alteration corridor and associated structures appear responsible for the Kena Gold Zone, Gold Mountain zone and several nearby high-grade gold intersections. In 2003 the alteration corridor was investigated with 22 diamond drill holes, trenching and a structural mapping program.
To date more than 150 diamond drill holes have tested the Gold Mountain and Kena Gold Zones.
The Initial Resource Calculations on the Gold Mountain and Kena Gold Zones have been completed and were filed with the Securities Commission on June 16, 2004. Modeling, QAQC evaluations and resource calculations were done by Independent Qualified Person Gary Giroux, P.Eng., MASc., and the accompanying 43-101 Technical Report was co-authored by Gary Giroux, P.Eng. and Linda Dandy, P.Geo (see Kena Property Resource below).
The results of the work done by Apex Resources Inc. may be summarized as follows: