Tunneling into an old Alaska gold mine turned up veins nobody had mapped

Crews driving an exploration tunnel into the Lucky Shot gold property, 75 miles north of Anchorage, have cut through two mineralized structures that were not in the company's geologic model.

Contango Silver & Gold has driven 332 meters of the planned 830, about 40 percent, since starting underground work last December. The tunnel is not for mining. It exists so geologists can drill the deposit from inside the rock instead of from the surface, which is cheaper and more precise.

"Immediate, high-priority targets that we can now drill efficiently from underground," is how Chief Executive Rick Van Nieuwenhuyse described what they found.

A sample from a stockpile assayed at 395 grams of gold per tonne, roughly 12.7 troy ounces from a tonne of rock. Lucky Shot has a history of grades like that; historical work identified five gold-bearing zones stacked vertically over 600 feet, according to the state geological survey.

Surface drilling that began in June is nearly done, about 5,700 meters across 27 holes. The first assays, from seven of those holes, include one interval of 2.45 meters at 86 grams per tonne, or roughly 2.8 ounces to the tonne, along an extension of a known vein. Five of the seven holes showed gold visible to the eye. One returned nothing worth reporting.

Those figures come with the caveats that always attach to early drilling. The measurements are lengths down the drill hole, not the true width of the vein, which Contango says is not yet known and could be materially different. Most assays are still pending. None of it constitutes a reserve or resource estimate, the formal calculations that establish how much gold a deposit actually holds.

The property sits in the Willow Mining District, where Contango leases about 8,600 acres of state and patented claims. The underground program is meant to support a feasibility study.