Breaking News: Nevada Exploration Enlarges Gold Mineralization at Kelly Creek and Prepares for Deeper Drilling

Nevada Exploration Inc. (OTCQB: NVDEF) (TSX-V: NGE) is pleased to report that the results of the Company’s Scorpion drill program have confirmed that the hydrothermal system that was active at Kelly Creek is gold-bearing over larger areas than previously known, with discrete zones of enriched gold in groundwater anchored to at least two clusters of >0.1 g/t gold in bedrock covering areas consistent in size with the geochemical footprints of the nearest major gold deposits, Lone Tree (5 Moz) and Marigold (8 Mozs).  When combined with the results of earlier drilling, NGE’s updated geologic model suggests that the gold-bearing hydrothermal system at Kelly Creek is likely the extension of the system responsible for Lone Tree and Marigold, and is of a size to support major additional mineralization.

A comprehensive technical presentation accompanying this news release is available at: http://www.nevadaexploration.com/_resources/presentations/Kelly_Creek_Technical_Presentation_January_2018.pdf

Summarizing the results, Wade Hodges, CEO: “We have specifically built an exploration program to look for large gold deposits.  Being the first to open-up Nevada’s covered basins to systematic gold exploration, we are not looking for one to two million ounce deposits, we are on the hunt for five to ten million ounce deposits, and bigger.  Big deposits are the product of big mineralized systems, which create big footprints, and so that is what we are exploring for.  With our Scorpion drilling results at Kelly Creek, along with an improved geologic model supported by historic drilling and a comprehensive package of geophysics, we have successfully established that the mineral system we’ve identified at Kelly Creek was pregnant (gold-bearing) over a significant area, and that the system had active fluid pathways that both intersected and affected large volumes of favourable host rock at a scale consistent with what you see at Nevada’s largest gold deposits.

“We have found exactly what we are looking for: a big mineralized gold system with a big footprint.  Our results at Kelly Creek combine all the critical components necessary to source a world-class gold deposit.  Just as importantly, the 3D groundwater results have defined discrete, parallel zones of gold enrichment that cut through this otherwise large system, giving us clear and focused targets to test for the final variable: are there places where the pregnant fluids and the suitable host rock units and deposition conditions came together to result in higher-grade mineralization?  Answering this question will be the specific goal of our next round of deeper drilling at the Project.

“This is what systematic exploration looks like, and this is how big deposits are found.  We are sticking to our plan, and we are excited by the results – especially as Kelly Creek is just the first of three projects we’re advancing using the same workflow.”

Scorpion Drilling Results

The favourable geologic setting (host units and structural controls) associated with the adjacent Lone Tree and Marigold deposits project northwards to the Kelly Creek Project area, beneath relatively shallow cover.  Earlier drilling and groundwater sampling had confirmed that this relatively shallow, prospective structural and bedrock setting was also associated with enriched gold in groundwater, alluvium, and bedrock.  The Scorpion drilling program was designed to collect 3D groundwater, alluvium, and top of bedrock samples across this prospective covered bedrock area, with the objective of constraining the target by vectoring into areas of gold mineralization in bedrock that are large enough to be associated with the footprint of a world-class gold deposit.

The Scorpion program consisted of 61 holes totalling 5,864 m of drilling, with an average hole depth of 95 m.  Of the 61 holes, 41 holes encountered bedrock, at an average depth of 84 m, which allowed for widespread bedrock mapping and sampling.  From the 61 holes, 552 water samples were collected, on average every 10 m downhole, providing important 3D geochemistry across the project, especially in areas of deeper bedrock where the Scorpion could not sample bedrock directly.

The results have established that the lateral extent of the gold-in-groundwater footprint at Kelly Creek is of a comparable size, and perhaps larger, than that seen at Lone Tree, consistent with the presence of a large, robust, mineralized system.  Zones of enriched gold in groundwater form focused, parallel NNW-trending lineaments (also reflected more broadly in arsenic and antimony in groundwater) bounded by the primary N-S structural fabric that runs parallel to Lone Tree and north from Marigold.  These linear zones of enrichment that cut through this large favourable system are consistent with the geometry of mineralization hosted within secondary zones of structural extension (Riedel-style shears), marking potential conduits of enhanced vertical hydrothermal fluid flow that are known to provide important ore-controls at many large deposits in Nevada (including Lone Tree).

The results of the Scorpion bedrock sampling combined with the bedrock samples from earlier drilling together define two clusters of >0.1 g/t gold in bedrock, covering areas at least 700 m x 300 m and 1,000 m x 600 m respectively, associated with the discrete lineaments of increased gold-in-groundwater enrichment, which provide new strong evidence that the hydrothermal system at Kelly Creek is mineralized over a larger area than previously known.

Establishing the Critical Components for a Major Gold Deposit

By combining the latest Scorpion drill results with the results of earlier deeper core drilling and the geophysical structural interpretation (based on the combined gravity, air magnetic, seismic, and CSAMT datasets), NGE has updated the geologic model at Kelly Creek to test for the critical components known to support gold mineralization at a scale of 5 to 10 million ounces in this part of Nevada (i.e. Carlin-type gold deposits).  Based on the combined exploration datasets, NGE is pleased to report that:

  • The primary and secondary structural fabric seen in the geophysics, core drilling, and hydrogeochemistry, plus the thick sections of alteration and geochemistry seen in the drilling, support the presence of major reactivated high-angle structural conduits associated with a hydrothermal system of a size necessary to support the formation of a major mineralized system;
  • Veining and structural damage seen in the core drilling confirm that the permeability of the units proximal to the favorable structural conduits has been improved over large areas and is well-suited to support gold deposition;
  • Thick and wide-spread intervals of hydrothermal alteration, oxidation, decalcification, and carbon remobilization confirm a large hydrothermal system was active at Kelly Creek, and mark the style of alteration and mineralization associated with Carlin-type gold deposits, which together are indicative of a favorable mineralizing environment;
  • The geochemical footprint seen across the project, which includes large areas of gold mineralization in bedrock, is consistent in terms of the size and geochemical package with the footprints associated with many of Nevada’s large mineral systems, which confirms: (i) that the system’s hydrothermal fluids were pregnant; (ii) that the pregnant fluids were present across large areas of the system; and (iii) that the pregnant fluids could potentially source economic gold mineralization where provided with favourable depositional conditions, namely suitably-permeable iron-rich host rocks; and
  • Thick sections of bedrock units known to support mineralization nearby at Lone Tree and Marigold were encountered by all of the widespread and deeper core drill holes, which confirm that favourable, iron-rich, and suitably permeable host rocks are present across the entire project area and at depth.

NGE believes that these results confirm that all the critical components needed to host a world-class 5 – 10 Moz deposit are present at the Kelly Creek Project, and that the combined dataset suggest the gold-bearing hydrothermal system at Kelly Creek is likely the extension of the system responsible for the adjacent Lone Tree (5 Moz) and Marigold (8 Mozs) deposits, with the potential to support significant additional mineralization.

Next Phase of Work

The next phase of work at Kelly Creek will consist of deeper drilling to test for areas where gold-bearing hydrothermal fluids were able to exploit favourable structural and permeability conditions to impregnate favourable iron-rich host rocks (all of which are now known to exist) at the scale required to source a major deposit.  This deeper drilling will target the discrete lineaments of enriched gold in groundwater defined by the 3D Scorpion program suggestive of possible Riedel shear structures that could provide the confluence of critical components needed to host higher-grade mineralization.  By integrating 3D geochemistry with conventional project-scale geology, the results highlight how NGE is using a combination of low-cost drilling and hydrogeochemistry (groundwater chemistry) to provide an otherwise missing crosshair to focus and advance this large, blind, gold-bearing system with clear next-stage drill targets.

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