Contango begins drilling the east end of the historic Lucky Shot gold mine

Contango Silver and Gold began drilling Oct. 22 into the eastern end of the Lucky Shot vein system, at a historic gold mine about 75 miles north of Anchorage, the company said in an update Wednesday. Contango says it's the first modern program to test that part of the vein system.

The work is underground. The first rig is drilling from a tunnel the company calls the 2070E drift, with 42 holes planned totaling 3,650 meters. A second rig is set to start Nov. 15 in the 2300E drift, with another 42 holes covering 5,320 meters. Contango expects both rigs to drill through the end of 2026 and finish in early 2027.

The season included "opening up the east side of the Lucky Shot vein system for the first time in the modern era," Contango President Shawn Khunkhun said in the update.

The mine historically produced about 252,000 ounces of gold, according to the company. Contango, then called Contango Ore, bought the company holding rights to Lucky Shot in 2021, and it now leases about 8,600 acres of state and patented mining claims in the Willow Mining District from Alaska Hardrock Inc. Its annual report lists Lucky Shot as an exploration-stage property, not a producing mine.

Crews have been driving an exploration tunnel so geologists can drill the deposit from inside the rock. In September, the tunnel cut through two mineralized structures that weren't in the company's geologic model. By early October, crews had driven 450 meters of a planned 830, about 54%, Contango said in an Oct. 6 update.

Other Lucky Shot drilling wrapped up this season. The Coleman surface drilling program totaled about 5,800 meters in 27 holes, and underground drilling of the KM vein finished at 943 meters in 16 holes. The company expects the remaining lab results, known as assays, from both programs in the fourth quarter.

Contango says it will release assays from the east-side drilling as they come in and are reviewed and validated.