Web Site
http://www.klondikestar.com/
Mineral Exploration
http://www.klondikestar.com/mineral_exploration/
Investor Relations
http://www.klondikestar.com/investor_relations/
Share Structure
Common Shares Authorized
120,000,000
Common Shares Issued and Outstanding 26,192,800
Restricted 13,683,527
Free Trading 19,273,970
Warrants Outstanding 773,000
Options Authorized or Issued and Outstanding 1,580,000
ADVANCED PROJECTS
The Indian River
The Indian River Placer Project is an advanced-stage placer gold exploration property. It is located 40 km from Dawson City in the heart of the Klondike gold-producing region of the Yukon, Canada. The Company’s goal is to develop a large-scale placer mine. The Indian River Placer Project consists of 214 mineral claims plus 17 leases totaling 37 km2 (14.3 mi2). The Indian River is emerging as one of the active areas of new investment and productive placer mining in the Klondike region. With the exception of a 49% interest in a small group of claims, Klondike Star holds 100% ownership of the project.
During the 2005-2006 winter drilling program, the Company completed 184 holes (double the 2004-2005 drilling) for a cumulative total of 274 holes or 2,426 meters. The winter drilling recovered gold from 90% of the holes, with gold recovered from 100% of the holes drilled in the main target area along the Indian River. In 2005, drilling resulted in gold recovery from 87% of the holes drilled.
During 2006, bulk sampling and testing of conventional processing technology (for throughput and gold recovery) proceeded alongside a business planning study to determine the economic viability of the mineral deposit. Test mining is being supervised by an established Canadian firm specializing in mine engineering and processing technology. Initial results from the first stage of test mining were announced in November 2006. Klondike completed upgrading and extension of the access road, set up a camp, and prepared additional bulk sample test sites for the 2007 test mining program, to commence following spring break-up. With a target of drilling and sampling 150 - 200 holes, the third consecutive winter drilling program commenced November 2006 and concluded in March 2007. Results are currently being compiled and analyzed.
Permit applications to facilitate future mining operations have been submitted and are under review by environmental assessment and regulatory authorities. Based upon conventional mining methods and the nature of the permitting regime for placer mining, it could be feasible to bring a placer mine into production in the short-term. A placer mining operation could generate cash flow for the Company to finance its major exploration and development initiatives.
For additional information on project-specific mineral rights and exploration activity, see press releases below and refer to the Management’s Discussion and Analysis contained in quarterly SEC filings. Go to Reports and SEC filings under Investor Relations, or, go to www.sec.gov under “filings and Forms (EDGAR),” click on “Search for Company Filings,” then on “Company & Other Filers.” Enter “KDSM” in the CIK box and locate 10-QSB or 10-KSB filings.
Lone Star Quartz
The Lone Star Project is an advanced-stage gold exploration property that is being studied for potential mine development. The Project consists of 1056 mineral claims and crown grants totaling 152 km2 (58.7 mi2). Lone Star is the largest project of six in the gold-producing Klondike region of Yukon, Canada.
The property is situated in the Tintina Gold Belt which spans Alaska and the Yukon and includes producing mines and major deposits. The Lone Star Project is located 20 km (12.4 mi) from Dawson City and is accessible by summer-maintained, graded gravel roads linking to the Klondike Highway.
First assembled by Canadian mine-finder Richard Hughes, the initial 500 mineral claims in the Klondike were optioned to Klondike Star in December 2003. It is the site of the former producing Lone Star Mine (1912-14) and decades of previous exploration.
Since acquiring the property, the Company has become the majority owner and operator, increased the size of the project from 500 to 1056 mineral claims and crown grants, constructed a 65-person exploration complex, with core processing and milling infrastructure on site, and completed extensive soil, chip and bulk sampling, diamond drilling, IP (induced polarization) geophysical surveys, assay and other analysis.
Exploration results and professional analysis to date indicate that the Lone Star Project represents an extensive mineralized area with a large-tonnage, low-grade gold target augmented by higher grade zones that warrants an expanded exploration effort and intensive evaluation for potential mine feasibility and development. The Company is working towards a mineral resource assessment consistent with industry and international standards and best practices.
Assay results from the 2005 exploration season were released sequentially October 6, 2005 to January 24, 2006. During the May to October, 2006 summer exploration program, the focus was on diamond drilling, bulk sampling, and ground and airborne geophysical surveys along with continuation of the Klondike Research Project with the Canadian University of British Columbia Mineral Deposit Research Unit (UBC MDRU).
Diamond drilling is delineating the extent of the known gold-bearing ore body in the primary zones of interest, including the Lone Star and extensions, the Buckland Shear between Gay Gulch and 27 Pup, and the Nugget Zone above Oro Grande Gulch.
A scoping study is in progress to assess the economic viability of the Lone Star mineral deposit, provide a baseline assessment of environmental and socio-economic considerations, along with a base case conceptual mine design, key factors such as energy and water supply, and capital and operating cost estimates.
Progressive exploration results, including the discovery of a new target, the JF Zone, were announced between December 2006 and February 2007 and a preliminary report on the scoping study was released in March 2007. A summary report on the UBC MDRU geological studies on the Klondike region was also released in March 2007.
Corporate Summary
"Klondike Star Mineral Corporation is engaged in the final steps in the search for the Mother Lode"
In partnership with exceptional Canadian mine-finder Richard Hughes, the stage is set for the dramatic next steps in the journey from discovery to determination of an economically mineable ore body.
In his 35 years of exploration experience Hughes has stated that the Lone Star claims in the Klondike is "one of the most exciting projects" he has ever worked on.
LONE STAR QUARTZ Claims
The Lone Star claims, including famed Eldorado and Bonanza Creeks, are the nexus of the original Klondike Gold Rush. The Klondike is considered to be the richest placer, or surface gold producing area in world history and home to the greatest gold rush the world has known.
The Lone Star claims comprise nearly 1,200 mineral, or underground claims that have been either privately or closely held for the past 108 years. The property has been continuously mined for surface, or placer gold, and is considered to be the richest area of production on the entire Klondike Plateau.
It is estimated that as much as 20,000,000 oz of gold has been mined over the past century and that gold has migrated from sources at the headwaters of Bonanza and Eldorado Creeks. This headwater is known as Lone Star mountain, and is contained within the Lone Star claims.
The Lone Star claims have been the subject of intense exploration by Hughes since 1986, seeking the epithermal source to all that surface gold. Having expended nearly $5,000,000 in exploration, Hughes has discovered three shear zones that run parallel to the nearby Tintina Trench. These shear zones contain quartz sericite schist and fine gold locked in pyrites. The formation also contains lode gold, or nugget gold, and the shear zones appear to be the source of nugget gold in the drainages leading from the mountain. Hughes has identified that these shear zones are the structural features that could host a series of mineable, feasible gold ore bodies.
Klondike
The Klondike was the greatest gold rush the world has ever seen. The saga is an epic story of adventure, discovery, fame and tragedy. It was set against the backdrop of the 1890's where discoveries had led pioneers across America into Western Canada, but it was also a period of economic difficulty. When gold was discovered in the Yukon, it started a stampede that is fabled as the greatest of its kind. Never before had so much gold been found in one place.
In those days the Yukon was a remote and isolated place, so the stories of human hardship and suffering were real, and losses were as great as the riches discovered. It is reported that 13,600,000 crude oz. of gold (*Kennecott Canada Ltd., 1993) were reported to the government, with a voluntary tax of 10% - 20% being paid. It is commonly held that most gold was not reported, and that multiples range from 3 to 4 times and up to 10 times the reported amount.
Yukon Territories
The Yukon is a territory within Canadian Confederation. Recently, responsibility for mineral resources, oil and gas resources, health services, forestry, water, and land were transferred to the Yukon government, establishing the equivalent of provincial governing authority.
Land claim agreements recognize the aboriginal rights, titles and interests of Yukon First Nations to traditional lands and resources. The settlement of Yukon First Nation land claims is the most advanced in Canada. The First Nation land claims throughout the region around the Lone Star mineral rights have been settled and completed.
The Department of Energy, Mines and Resources provides support for the mining industry, including a modern geoscience database through the Yukon Geology Program. The Yukon Mining Incentives Program and the Yukon Mineral Exploration Tax Credit program provide support to investment through the Yukon MINE Plan, and provides funding to the Mining Environment Research Group.
Gold Industry Outlook
Commencing in December 2002, an uptrend in the price of gold against the U.S. currency began. This appears to be a trend reversal from the period 1981 to 2001 and has refocused interest in mineral exploration, particularly in jurisdictions with low political risk and favorable to mining, such as Yukon Territories. The gold sector has become 'newsworthy' recently with U.S. dollar weakness, changes in U.S. monetary policy, soaring energy costs, and increasing world tension.
"The enduring value of gold is once again being recognized in the marketplace."
Pierre Lassonde, President, Newmont Mining Corporation.
Conclusion
Rarely does an opportunity like Klondike Star present itself. Leadership by management and through joint-venture is in place and eager to confirm the magnitude of the discovery of gold-bearing shear zones on the Lone Star claims. This property is renowned as the richest placer property in mining history and now an uncompromised effort will be made to determine the gold resources in the mountain.
Klondike Star represents the final steps in the search for the Mother Lode.
DISCLAIMER: Nothing in the contents transmitted on this board should be construed as an investment advisory, nor should it be used to make investment decisions. There is no express or implied solicitation to buy or sell securities. The author(s) may have positions in the stocks or financial relationships with the company or companies discussed and may trade in the stocks mentioned. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. All information should be considered for information purposes only. No stock exchange has approved or disapproved of the information contained herein. All information is believed to be accurate and was taken from public sources, or is the opinion(s) of the author(s). (This disclaimer has been reprinted by permission of its author)
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