Unlocking the Riddle of Kilgore Minerals: Gold Exploration Inside a Uranium Company?

Unless you are a subscriber to Robert Bishop's Gold Mining Banal Report, you may not accept heard about this beginning uranium development company. The company's allotment amount had a advantageous assemblage afterwards the San Francisco Gold Show, endure November, if Kilgore Minerals (TSX: KAU) was discussed as a abeyant takeover candidate. Shares in this abstruse minerals aggregation catapulted from the C$0.50 - 0.60 ambit to as top as C$1.13/share by February 6th. Pinetree Capital (TSE: PNP), itself a baking banal whose shares accept quadrupled aback aboriginal November, appear it had purchased about 10.5 percent of Kilgore Minerals (and if the convertible balance were exercised, its buying could ability 12.9 percent).
What is the action over Kilgore Minerals? Norman Burmeister is hardly the promotional type. Even his acceptable friend, letter biographer Robert Bishop, describes the aggregation as non-promotional. During our interview, it occurred one ability anticipate of Kilgore Minerals as a uranium aggregation central a gold analysis company. That should become credible as you abide account this. And the catechism was airish to Mr. Burmeister, "At the end of this year, will Kilgore be bigger accepted as a gold or uranium company." Afterwards a continued pause, he responded, "The cold actuality is to physique a mining company."
Far from the actual promotional Howe Street area, breadth the majority of the TSX Adventure barter companies accept offices, Burmeister is about antisocial in a baby boondocks in Wyoming. "It's about ten afar to the abutting stop light," he told StockInterview. Actually, Dubois, Wyoming breadth you'll accretion Mr. Burmeister is beneath than 80 afar abroad from Yellowstone National Park. (Keep alive west on US 287, and you'll be in Montana.) If we apprehend a aggregation CEO talking up that he's traveling to physique a mining company, the byword "grain of salt" comes to mind. But a accurate analysis of Mr. Burmeister's resume will breeze even the a lot of contemptuous out of that anatomy of mind, starting with his graduation from the Colorado School of Mines as a geological engineer. (See bio snapshot at the end of the article.) He's begin and developed a gold mine, begin deposits, awash them to a above company. Been there, done it, and now he's accessible for something even bigger.
Kilgore Mineral's Uranium Projects
Now, Burmeister has got three gold and 12 uranium properties. The uranium backdrop are convincing, and the aggregation affairs a assignment affairs on one, in Nevada. "We are in the action of allowing one acreage for a summer assignment program. It's a Nevada acreage that was accomplished out by Utah Mining and Construction, which became a analysis of General Electric. It afterwards became Pathfinder Mines, if GE was ordered to bankrupt their uranium mining and bearing facilities." He's apropos to the company's 46-claim Mountain West acreage in Elko, Nevada. One ability doubtable the duke of Dr. Dieter Krewedl in this acreage selection. Dr. Krewedl was carnality admiral of analysis for Pathfinder in 1990 - 1995 (and aswell serves on the lath of admiral of Strathmore Minerals).
"It's not the bigger acreage in our portfolio, but it's handy," Burmeister said humbly. "It's in a acceptable administration in ELKO County, Nevada. It's something that we can get acceptable and move forward. It's a almost low amount blazon of operation. It's something we anticipate our aggregation with our assets can beforehand decidedly aural a account that isn't traveling to accomplish the company's absolute resources." Burmeister believes the Nevada uranium asset may accept a acceptable grade. "It's abreast apparent with about a low stripping ratio, so it could be mined with a aperture blazon of mining operation," he explained. If a drop is almost shallow, the aperture blazon mining adjustment can be used, agnate to how a quarry is mined.
His two Wyoming backdrop in Crook County, absolute 122 claims, were ahead accomplished by altered above companies in anniversary of the three affirmation blocks. Homestake Mining accomplished over 3,000 holes as backward as the mid 1980's on the 48-claim New Accumulation block. In one breadth alone, aural a 40-acre tract, over 250 holes were accomplished (about six holes per acre). Bethlehem Steel's 2 claims in the Oshoto Accumulation abide of an absolutely a baby property. "But it is appropriate in the centermost of what was developed in the backward 1970's," Burmeister insisted. The collective venture, amid Bethlehem Steel and a California-based oil company, did a acknowledged analysis ISL operation on the acreage in 1979. As they were ambagious down the test, and evaluating the results, they had to contend, as did abounding added uranium analysis companies, with the accessible clamor afterwards Three Mile Island.
Another uranium acreage block, the 72-claim Wood Group, was aswell abundantly drilled, by Homestake and Pioneer Nuclear. It is estimated several hundred holes explored the property, and 115 holes were accomplished on one 160-acre tract. Burmeister hinted his uranium amalgamation was still getting assembled. The company's website notes, "The Aggregation will abide its efforts on the breadth and accretion of celebrated abstracts associated with its portfolio of uranium properties."
What tickles Norman Burmeister's adorned about this area? "It is the Inyan Kara group," he said. His leases are allotment of a abundant beyond package. "There is aeon foreground Cretaceous debris that surrounds the Black Hills. We accept backdrop on arctic allotment of the arrangement in Montana, we accept backdrop on the western flank, and this is in accession to acreage on the aeon foreground on the eastern abut of the Black Hills." And what makes this important? "It's the agnate to the stratigraphic assemblage that has been awful advantageous in the Powder River Basin," explained Burmeister. "It's aswell been advantageous at its southern acme in South Dakota in the Edgemont District."
Others accept been announcement uranium leases in Wyoming, and the accompaniment has become a axis of claims announcements in contempo months. How did Kilgore Minerals appear beyond these? "We came by some advice in a amalgamation of abstracts we purchased that included the absolute breadth of the aeon front," explained Burmeister. "I don't anticipate that advice was broadly known. That's why these leases were not best up in the past. I anticipate association didn't apperceive breadth that aeon foreground was. That aeon foreground was authentic by a above uranium aggregation with over 15 years of analysis in the area, accepting accomplished I don't apperceive how abounding bags of assay assignment holes of these things, like one per aboveboard mile, over several counties: northeastern Wyoming, southeast Montana, and western South Dakota. That advice led to the analogue of the aeon foreground breadth these uranium deposits occur." With that said, Mr. Burmeister is agilely confident.
The Kilgore Gold Project
But which activity gets Norman Burmeister talking breathlessly? Ask him about the company's Kilgore gold acreage in southeastern Idaho. "I'm actual aflame about this project," said Burmeister. "It was a acreage that was actual top on Echo Bay's list. At the time they were active, Echo Bay was one of the above gold campaign of the world. They had a actual ample budget. This was one of their top projects, possibly even their top project." Indeed, Echo Bay had accomplished 122 holes (82,987 anxiety of drilling) in 1994-96, and bought out Placer Dome for 100 percent buying of the property. The collapse of inferior gold analysis in 1997 led to the activity (and all Echo Bay projects) getting shelved. Kennecott, Placer and Pegasus anniversary accomplished the gold acreage amid 1983 and 1994. Kilgore Gold (wholly endemic accessory of Kilgore Minerals) acquired 100-percent buying of the property, afterwards the analysis industry had contracted. The acute buy at the basal of the cycle, which is what Norman Burmeister did.
During 2006, the capital appearance for Kilgore Minerals will acceptable be the summer conduct affairs on the Kilgore gold property, absolute 150 unpatented claims over an breadth of about 4.7 aboveboard miles. The abstruse address (National Instrument 43-101) was filed on the acreage by G.H. Rayner and Associates, which estimated 218,000 ounces of gold adumbrated and 269,000 ounces of gold inferred. To ascertain that estimate, about 200 design and about-face apportionment assignment holes for added than 126, 000 anxiety were completed. Above gold companies spent added than $8 actor to accompany this acreage to this akin of understanding.
As a resource, beneath than 500,000 ounces is a baby deposit. However, a assignment intersection, during the summer 2004 assignment program, addled a 10-foot breadth averaging 0.465 ounces/tonne or 14.5 grams per tonne gold. Designated the "Elsa Zone" analysis hole, the circle begin that gold sample added than 4,600 anxiety from the 487,000-ounce gold resource.
A basic structural analysis by Stanton W. Caddey, a awful admired geological consultant, assured in an October (2003) report:
"The Kilgore anticipation breadth represents a top superior gold project, abundant of which charcoal to be assignment tested. A lot of the antecedent conduct was focused forth a borderline or digital articulation of the capital hydrothermal system.... The primary analysis abeyant is for a bonanza, epithermal, gold-rich attitude arrangement localized forth the above N60W-trending McGarry Canyon NW accountability breadth and accessory faults in the breadth referred to as Dog Bone Ridge... Analysis abeyant at the Kilgore acreage for added than acceleration the present gold ability with added analysis conduct is admired as excellent."
In May 2004, Abundance Development Associates of Reno, Nevada completed a scoping akin amend of Echo Bay's 1996 antecedent engineering appraisal of the Kilgore project. Neil B Prenn, P.E., agreed this is a ample epithermal gold deposit, hosted in agitable and sedimentary rocks, and the ability is hosted aural quartz stockwork and in silicified sedimentary rocks. In reviewing Echo Bay's work, he empiric that instead of artful a assets for the property, they declared an "estimate with top confidence, the abeyant mineable allotment of the resources," at 10.087 actor tonnes, averaging 1.28 grams/tonne, absolute 417,000 ounces of gold. The architect concluded, "The activity appears to accept analytic adorable economics if the 'potentially mineable material' can be angled at $375/ounce gold price."
Burmeister believes the best is yet to come. His arbitrary of Echo Bay's antecedent conduct was simple and to the point, "They were focused on a low-grade accessible pit occurrence, which is actual nice. It has a cogent resource. In their activity to move that accurate aspect of the activity forward, I anticipate they did not accept the adventitious to footfall aback and attending at the all-embracing hydrothermal system, which we accept done. Burmeister added, "We anticipate the best may be yet to appear by exploring for a top brand underground blazon of operation which is actual abundant in favor these days."
The acknowledged assignment aperture was a dark analysis at 410 anxiety of depth. Burmeister clarified, adage "The aboriginal aperture that we drilled, we were acknowledged in advertent a 'blind' top brand accident of gold beneath the arid sinter." He accomplished the aberration fabricated during the 2004 assignment program, "In our activity to get our accoutrements about this ambition area, which we alarm the Dog Bone Ridge area, we took astronomic step-outs, and never account that top brand hole. Subsequent holes were all interesting, building superior realgar mineralization and stibnite mineralization, which are analytic of the epithermal archetypal we're testing. We got aberrant gold, but we didn't get any ore brand material."
The Dog Bone Ridge area, as bent by geochemistry, geophysics, cartography and structure, is at atomic 6,000 anxiety continued and 1,800 anxiety wide. Burmeister explained his bigger compassionate of the ambition area, "We anticipate this is a actual contempo geological occurrence, and has not been eroded. Typically, there is no gold on the apparent on these systems. It comes as the aftereffect of boiling. The gold is precipitated out at that akin and does not ability the surface. We're in fact ambidextrous with a paleo-surface. Our analysis aperture was added in the system, beneath the breadth of boiling. So I don't anticipate the added conduct we did, the added amount holes, they did annihilation but reinforce our estimation of the system."
In July, Kilgore Minerals will advance breadth conduct larboard off in 2004. A contempo account absolution announced, "The summer 2006 assignment affairs is accepted to arise in July with the aboriginal holes advised to account the Elsa Breadth discovery. There are a amount of Elsa 'look-alike' absolute targets aural the all-embracing Dog Bone Ridge ambition breadth that will aswell be tested." How does Norman Burmeister explain this in layman's terms? "We're traveling to account that analysis aperture and accretion out what that's all about," he told StockInterview. "We'll go about the business of evaluating that activity because it's all prospective. We were targeting a projected structural circle of which there are many. The success we had with that aboriginal hole, it's not different in agreement of what we apperceive in the geophysics, the geology, the anatomy and the geochemistry. That's not to say that all of those targets are traveling to be successful, but the admeasurement of this arrangement indicates it can host a actual cogent resource."
It was an agitative analysis hole, and the summer 2006 conduct affairs could spell success if conduct after-effects bout Burmeister's enthusiasm. In closing, he said, "That aperture could able-bodied be appropriate accurately in the average of an ore body. We don't apperceive what the acclimatization of the breadth is, because with one hole, it is absurd to apperceive what the dip and the bang is. We don't apperceive if it's abutting to accurate amplitude or we hit it at the top angle. But, it's actual exciting."
Stay Tuned.