The Chandalar Lode Gold Project is a relatively advanced district-sized gold exploration project consisting of historical lode gold mines or prospects in the southern Brooks Range of arctic Alaska (USA). The project is 190 air miles (306 km) north of Fairbanks, a full-service support center for the oil and mining industry, and 50 miles (80 km) east of the Dalton Highway, a major all-weather north-south route that links Fairbanks to the Prudhoe Bay oil fields on the Arctic Ocean to the north (Figure 1).

The project is on land owned by the State of Alaska, which is one of the more active and highly-ranked mining jurisdictions in the world. The project is comprised of 17,100 acres (7,042 ha) of mineral rights, 100 percent owned by Goldrich Mining Company ("Goldrich"), consisting of 23 patented Federal mining claims and 164 unpatented State of Alaska mining claims.

Goldrich has established a substantial exploration infrastructure at the project site, including a 25-person camp, heavy and light-duty equipment, a 4,400-foot (1.3 km) airstrip, and a network of roads which offer all-weather access to all of the major gold prospects. Current surface access to the camp from the Dalton Highway is restricted to the winter months via a winter trail from Coldfoot along the Dalton Highway. The State of Alaska recently obtained the right to construct a permanent all-season road along this trail; when built, this road will allow year-around surface access to the project site.

The area has a long prospecting and mining history dating to the discovery of placer gold deposits in 1905, soon followed by the discovery of more than 30 separate high-grade lode gold prospects. Over the next 80 years the lode gold occurrences were intermittently explored or mined by a plethora of small operators, but because of the district's remote location the readily mineable placer gold deposits received the most attention. Of the recorded 100,000 ounces of historical gold production from the area, less than 18,000 ounces are attributed to the lode gold operations. Historical data indicate that many lode prospects remain scarcely explored and that considerable amounts of gold may still be in-place in the old lode mines.

The Chandalar lode occurrences are part of a regionally mineralized schist belt that extends east-west across the 600-mile (966 km) width of Alaska along the south flank of the Brooks Range. The rocks consist of Devonian-age sedimentary, volcanic and intrusive igneous rocks that have been metamorphosed, sheared and deformed.

The geology and mineralization of the Chandalar lode gold systems are quite similar to many important productive gold deposits which have been variously categorized as greenstone-hosted, orogenic, shear-zone related, low-sulfide, mesothermal, and other names. Collectively these deposits account for a major part of the world's gold production and they constitute one of the most common and sought-after types of gold deposits in Canada, Brazil, Australia, and other regions in the world. They are associated with regional shear zones in metamorphic rock belts of varying lithology and age, and are thought to have formed at considerable depth in the earth's crust by hydrothermal and/or metamorphic processes.

Goldrich's lode exploration activities since 2003 include geological mapping of more than 40 lode prospect areas, extensive surface sampling and trenching, and one reverse circulation (RC) drilling campaign in 2006. Initial focus was to identify and test high-grade gold-quartz vein targets; later, the exploration focus was expanded to include lower-grade zones associated with many of the lodes to define possible bulk tonnage targets.

Four high-priority targets - Mikado, Summit, Eneveloe and Little Squaw - are sites of old mines, explored and developed by at least two levels of underground workings over vertical ranges of 200 feet (61 m) or more, with mineralization remaining open to depth. All occur along or adjacent to major, extensive shear zones that host other similar, but scantly explored lode prospects. All remain open along strike and to depth.

Mikado mine

The Mikado mine was the most productive historical lode mine in the area, with recorded production of 10,400 tons (9,435 tonnes) at a head grade of 0.93 oz/ton gold. Mineralization is enclosed in the broad and extensive Mikado shear zone, occurring as high-grade discontinuous quartz lenses, stringers and veins. Long-hole drilling and tunneling in the 1980s on the 200-level in the mine encountered a wide zone (more than 60 feet/18m ) averaging 0.3 oz/t gold that extends into the hanging wall far beyond the vein - a possible large tonnage lode target that has not been tested. There has since been no other drilling in the Mikado mine area.

Summit mine

The Summit mine was the second most productive lode mine in the area, with recorded production of 1,400 tons (1,270 tonnes) at a head grade of 1.29 oz/ton. Mineralization occurs in high-grade ore shoots, with historical assays reporting up to 90.92 oz/ton gold over true widths of 2 feet (0.6 m) in the footwall portion of a massive, persistent quartz vein. Goldrich's surface trenching and RC drilling identifies several other possible shoots - e.g., 20 feet (6 m) of 10.58 g/t gold - associated with broad zones of lower-grade mineralization that can be traced for considerable distance along strike.

Eneveloe mine

The Eneveloe mine is developed along a massive wide quartz vein that includes a high-grade ore shoot. It is explored by an outcrop-level tunnel and a second tunnel 100 feet (30 m) vertically below. The shoot exposed in the lower tunnel is 70-feet (21 m) long and reportedly carries high-grade gold over widths of 1.0 to 2.0 feet (0.3-0.6 m). Five RC holes drilled by Goldrich in 2006 in the prospect confirms mineralization of interest along strike and to depth - e.g., 25 feet (7.6 m) of 5.85 g/t gold.

Little Squaw mine

The Little Squaw mine is adjacent to a very broad and extensive shear zone that is offset along strike by a number of cross-faults. The principal quartz vein, about 4 feet (1.2 m) wide, is exposed at the surface and along the 200-foot (61 m) length of a tunnel 100 feet (30.5 m) vertically below outcrop. Gold is confined to a narrow ±1-foot (0.3 m) wide band in the footwall of the vein, averaging about 1.64 oz/t gold along the length of the tunnel, with several channels across the vein returning assays of more than 100 oz/t gold. RC drilling in 2006 by Goldrich was largely inconclusive as most of the holes failed to reach target depth.

Other lode prospects

There are at least 15 other lode prospects in the project area with similar interesting gold values in trenches or surface outcrops. All are associated with the eight or nine major shear zones or subsidiary faults to these zones. Reconnaissance rock sampling, soil grid sampling and ground magnetic surveys have been useful in helping delineate the lode systems and extend the mineralization and/or controlling structures along strike. Additionally, Goldrich has identified several new prospects as a result of this work, including Aurora Gulch, which appears to be a possible low-grade large-tonnage stratabound target with gold in sheeted veinlets and disseminations in a sheared phyllite unit. Similarities to some unique, but very large, phyllite-hosted gold deposits elsewhere in the world make this a compelling target.

Summary

In summary, the geology of Chandalar lode project is comfortably similar to that of many familiar productive lode districts, with high-grade lode targets of sufficient grade to support underground operations and possible lower-grade large-tonnage targets amenable to bulk mining. In an independent study contracted by Goldrich, the authors likened the Chandalar district deposits to many large and famous gold deposits of the circum-pacific rim in Russia, the United States and Australia as outlined in the following table (Please see Cautionary Note regarding Adjacent Properties).