In September 2017, Metallic Minerals entered into an option agreement to acquire a 100% interest in 26 miles (36.4 km2) of creek and bench mining rights (the “Property”) along the Australia Creek drainage, in the Klondike gold district near Dawson City, Yukon. Australia Creek is part of the historic Klondike gold district that is estimated to have produced over 20 million ounces of gold since its discovery in 18981. Despite extensive mining activity nearby, Australia Creek itself was never historically mined due to its importance as a source of water and hydro-electric power for supporting the broad scale, floating dredge operations that were being conducted in the area by Yukon Consolidated Gold Company (YCGC) which operated in the Klondike Region between 1920s and 1960s. The dams on Australia Creek have been removed with only the historic diversion channels now remaining. YCGC did limited exploration churn drilling at the mouth of Australia Creek, but no further exploration up the drainage. The mouth area is being actively mined at present and auger drill holes on Lower Australia Creek have returned values in the gravels similar to other parts of the area, with initial test pits in 2015 to 2017 confirming the presence of alluvial gold.
In January 2023, the Company announced the signing of a production royalty agreement on 5 ½ miles of alluvial gold claims at its Australia Creek property with Little Flake mining, a company owned and operated by Parker Schnabel of Discovery Channel‘s top-rated television series, “Gold Rush”. Little Flake produced over 1,300 ounces of gold in 21 days of mining at Australia Creek from the Boomerang pit shown below. Alluvial production and royalty generation continued with a new operator in 2024.
The opportunity for Metallic Minerals will be to build a portfolio of production royalties from its holdings in the Klondike region, which can potentially generate internal cash flow from royalty payments that can be used towards the Company’s exploration activities in the Keno Silver and McKay Hill Projects. The first production royalty on Lower Australia Creek covered just a fraction of the remaining total Australia Creek holdings and the Company expects to secure additional production royalty agreements with other experienced alluvial mining companies in 2025.
