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 Thu Oct 20, 2016
SVH Tracker: Serengeti's UDS delivers Plan B exploration play for 2017
    Publisher: Kaiser Research Online
    Author: Copyright 2016 John A. Kaiser

 
Serengeti Resources Inc (SIR-V: $0.15)
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SVH Tracker - October 20, 2016: Serengeti's UDS delivers Plan B exploration play for 2017

Serengeti Resources Inc announced on October 20, 2016 that an IP survey conducted this summer on its 100% owned UDS project next to AuRico's Kemess project in northern British Columbia has yielded a 900 m by 1,500 m chargeability anomaly interpreted as a sulphide body. The UDS claim is located 7 km northeast of the Kemess South deposit which produced 3 million oz gold and 794 million lbs of copper from 219 million tonnes of 0.209% copper and 0.626 g/t gold, and about 5 km east of the Kemess Underground and East deposits where AuRico hopes to turn a proven and probable resource of 100.3 million tonnes at 0.28% copper, 0.56 g/t gold and 2.05 g/t silver into an underground block-caving operation. Kennecott arrived in the Toodoggone area during the sixties through a regional geochemical survey but serious work was not undertaken until 1986 when a junior called El Condor Resources optioned the project and made the Kemess South gold-copper discovery which Royal Oak acquired in 1996 and developed into an open pit mine in 1997 before ending up in receivership from which Kemess was acquired by Northgate in 2000. The main juniors in the immediate area were Finlay Minerals Ltd, headed by John Barakso who was involved with the early Kennecott exploration, and Stealth Minerals Ltd, headed by Bill McWilliam. Barakso has had control of the Atty claims to the north of Kemess and west of UDS for several decades, but Stealth became distracted by Argentina, ceased exploration about 2006, and was delisted in 2015 after not filing financials since 2013 which showed a working capital deficit of $1.3 million. A related company headed by McWilliam, Cascadero Copper Corp, may have ended up with Toodoggone claims Stealth did not allow to lapse. In the case of the UDS claims Stealth did allow those to lapse, and after a brief ownership by an online staker, they were staked by Serengeti in 2013.

Serengeti's IP anomaly is a significant expansion of a weaker IP anomaly established by Northgate in 2007 just south of the UDS property. Given that this area could host the truncated portion of the Kemess South depth courtesy of a NE strike-slip fault, it is puzzling Northgate never did a deal with Stealth which may have been too distracted by its problems in Argentina and litigation with Barakso. Northgate in turn was taken over in October 2011 by AuRico Gold in a paper bid valued at $1.1 billion, and when Alamos took over AuRico Gold in 2015, Aurico's royalty interests and the Kemess project were spun out as Aurico Metals Inc. I have even picked up some murmurings that Serengeti's IP anomaly was identified by Stealth and drilled with little success, though according to Moore, there is no assessment record of such work and no physical evidence of drilling activity within the scrub and tree covered valley in which most of the anomaly sits.

Serengeti's CEO David Moore has an alternative interpretation to the Kemess South displacement, namely that the area of the IP anomaly has been displaced southwards from the eastward projection of the "favorable corridor" that hosts the Kemess Underground and Kemess East deposits of AuRico. In either case the ridge that straddles the UDS western boundary has numerous showings of an epithermal nature that could be peripheral to a buried porphyry system and which have received considerable attention from Finlay, Stealth and at one time even Inco. The anomaly straddles a northwest normal fault whose eastern side has been down-dropped.

The area of the IP Anomaly has cover rocks of the Takla Group, Upper Triassic aged andesitic volcanic flows which in the areas of the Kemess deposits have been intruded by the Early Jurassic intrusives of the Black Lake Intrusive Suite. Both the later intrusive and earlier andesitics are hosts to the copper-gold mineralization at Kemess. The speculation is that the area of the UDS IP anomaly was overlooked because vegetation and overburden made valley prospecting difficult compared to the more accessible ridge to the northwest of the IP anomaly that yielded decent copper in soil values.

It is thus possible that a part of the Kemess area that should have received attention from past owners or farm-in attention from the operators of the Kemess Mine managed to get overlooked simply because exploration work would have been blind and difficult. It is possible that another significant copper-gold porphyry zone genetically linked to the Kemess North Corridor or the Kemess South deposit simply needs a couple 300-500 m drill holes to be discovered. Serengeti's flagship remains the Kwanika gold-copper project where a substantial resource has already been outlined and where important expansion potential remains, especially if it is correct that a key hole drilled in 2016 missed the sulphide zone implied by the IP anomaly (see SVH Tracker: Sept 22, 2016. Daewoo has until March 2017 to make it official that it will keep funding Kwanika. UDS, however, deserves a few drill holes in the summer of 2017 funded 100% by Serengeti to see if a substantial deposit has been overlooked, or perhaps just a mineralized zone that will be future mill-feed for AuRico's Kemess Underground project. The news is a pleasant surprise for Spec Value Hunters.


 
 

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