Yukon-Nevada Gold Corp. - Ketza Shamrock

Projects Overview Jerritt Canyon Ketza River Manto Zone

Technical Report

Ketza Shamrock Silver Valley Property Silver Bar South Wolf Property Money Property

Yukon-Nevada Gold Corp.
490-688 West Hastings Street
Vancouver BC V6B 1P1
Canada

Tel: 604.688.9427
Fax: 604.688.9426
Email: nicole@yngc.ca

Introduction

Ketza Shamrock Zone Image Gallery
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The Shamrock zone refers to a bulk tonnage gold exploration target on the Ketza River property. The target is a broad rusty weathered area underlain by a well bedded sequence of interbedded Lower Cambrian phyllite, argillite, quartzite and carbonate rocks that host gold bearing stock work quartz-sulphide veining and alteration. Figure 1 shows the regional geology and mineral occurrences of the district. The Shamrock zone is located near the centre of the Ketza Uplift, listed as number 1 on the map. The zone gets its name from the shamrock green colouration due to the widespread presence of scorodite in the vein material scattered in the talus on the hill side.

Exploration in the area began in 1984 and includes airborne geophysical, soil and rock geochemical surveys, prospecting, trenching, reverse circulation drilling and diamond drilling. During the major drilling programs in the area in 1986 and 1987 (14 diamond drill holes - 880 metres and 72 reverse circulation holes - 4616 metres) sampling concentrated on massive sulphide veining. Routine sampling of disseminated sulphide and alteration zones was rarely undertaken in occasional drill holes. Drill hole depths were shallow rarely exceeding 100 metres and concentrated in the area of the three main showings. Hemlo Gold drilled three widely spaced diamond drill holes in 1995 totalling 490 metres. The 1996 drilling program by YNG totalled 3079 metres in 18 HQ diamond drill holes over an area of 1200 by 500 metres.

A two square kilometre gold in soil geochemical anomaly coincides with a visual colour anomaly in rusty weathering altered and veined mineralized bedrock. The soil anomaly contains gold values greater than 100 ppb with a major portion of samples in the anomalous area greater than 500 ppb. At one site, the gold analysis in soil returned 31,500 ppb. Within the anomaly, grab samples of quartz-scorodite material typically assay 1 - 4 g/t and up to 15 g/t (+100 g/t at 3M) gold. The area encompasses four small vein and quartz stock work occurrences discovered by previous operators. Minor gold production was achieved in 1990 from oxides in the surface weathered zones of three showings (Gully Vein, QB stock work, and 3M zone). Figure 2 shows the location of the occurrences, drill hole collars, and partial rock sample results in the Shamrock area.

The mineralization of the Gully zone is massive sulphide (pyrrhotite, pyrite, and arsenopyrite) in multipe five metre thick shallow plunging replacement bodies. The area was drilled along 120 metres to 80 metres down plunge and remains open in all directions. The gold grades in sulphide are generally low with values from 1 - 9 g/t. Disseminated pyrite and alteration in the footwall and hanging wall rocks were not routinely sampled during the program.

A reverse circulation drill hole in 1987 produced a significant intersection of 105 metres grading 3.7 g/t gold in quartz-sericite-pyrite mineralization on the east side of the QB vein mineralization. Three irregular, shallow-dipping vein stock work zones occur within the interval that appear to plunge at a moderate angle to the east-southeast. The mineralized zones within the section are from 15 - 25 metres thick with average grades of greater than 5 g/t gold.

The 3 M zone was drilled in a series of shallow close spaced holes which were unable to explain the extent of high grade gold float located in the down slope talus dispersion train. The float consisted of green scorodite clay with remnant quartz grains and arsenopyrite and gold grades of 93 - 994 g/t.

The North Face area encompasses low grade stringer stockwork and disseminated alteration zones outcropping in the cliff face at several locations. The mineralization occurs within strongly deformed phyllite units interbedded with weakly calcareous siltstone and sandstone. The mineralized occurrences occur in the upper limit of a portion of the broadly dispersed gold in soil/talus anomaly. Several drill holes tested a portion ofthe area in 1996. The Peg/Fury target is highlighted by a very large orange weathered ferricrete deposit on the hillside. Low grade gold values were intersected in the bedrock by percussion drill holes below the ferricrete deposit. The holes encountered narrow gold bearing quartz-arsenopyrite veins and pyritized sediments.

Gold Mineralization

The gold mineralization occurs with sulphide in quartz breccia veins, vein stock work, and disseminated in silicified sericite altered sedimentary and carbonate-bearing rocks. Thick massive quartz breccia veins of up to 30 metres containing abundant sulphide mineralization and scorodite that in-fill steeply faults routinely grade from 0.50 to 2.5 g/t gold and represent probable feeder veins to stockwork and disseminated gold zones. The gold bearing quartz-sulphide vein stock work is composed of anastomosing veins and stringers cross cutting phyllite or angular breccia infilling veinlets in massive quartzite beds. The stock work type of mineralization commonly overlaps the two rock types near the lithological contact with average grades of approximately 1.0 - 5.0 g/t gold. Silicification occurs with the quartz stock work veins in all rock types (including calcareous siltstone and limestone) with average grades of 0.5 to 1.5 g/t gold.

The gold mineralization in the Shamrock area has been partially drill tested along a 1200 metre length over a 500 metre width and through a 500 metre vertical interval. The gold in soil geochemical anomaly fringes the ridge top in the centre of the Ketza uplift and has an extensive down slope dispersion in the soils and talus. See figure 2. Mapping indicates cross cutting quartz-sulphide veins, scorodite rich shear zones and thick massive beds mineralized with stockwork veins and disseminated sulphide outcropping in the cliffs and slopes above the soil anomaly. The drilling has attempted to follow an apparent structural tend and stay within the bounds of the mineralized system using large step out drill holes. The drill holes have intersected a series of semi-continuous steeply dipping quartz breccia veins along a trend striking at approximately 330o. The projection of the veins and accompanying alteration may be associated with a number of other gold occurrences over a distance of four kilometres to the northwest.

Structural Geology

The alteration system has been interpreted to be cored by an unroofed pluton of probable Cretaceous age. The emplacement of the postulated intrusion has resulted in the apparent doming and uplift of the Shamrock area which has been referred to as the Ketza Uplift. Mapping on the property indicates that there are five deformation events affecting the rocks in the area. The gold mineralized stock work veins and disseminated replacement mineralization preferentially occurs within central zones of S2 anticlines in proximity to D4 faults. The faults acted as conduits for the mineralizing solutions which feed fracture joints associated with the anticlinal structures. The steeply dipping normal faults that developed around the Ketza Uplift are the conduit structures for the mineralization. Bedding dip measurements indicate that the folds are east-west trending with moderately north-northeast dipping axial planes. The cross cutting normal faults are an important locus for high grade gold zones which can be expected in areas proximal to a possible unexposed intrusion at the core of the Ketza Uplift.

Alteration

The mineralized system appears to be outwardly zoned from multi-phased quartz-sulphide veining within a quartz sericite halo that in turn is surrounded by an outermost propylitic alteration zone of epidote-pyrrhotite. Not all quartz veins are gold bearing and further examination is required to identify possible differences which may indicate the most favourable stage of quartz veins.

Drill Results

The diamond drilling at the Shamrock has encountered low grade gold values in mineralized quartz-sulphide vein stock work and breccia zones over significant widths in widely spaced drill holes. The drill holes have provided a stratigraphic section of the 1a map unit. The unit is composed of a sequence of clastic and carbonate bearing sedimentary rocks. The lowermost unit appears to be a carbonaceous well foliated argillite that is overlain by thick bedded light coloured quartzite/sandstone interbedded with lesser amounts of argillite and siltstone. The quartzite unit is overlain by thin well bedded grey argillite and light coloured siltstone with lesser quartzite. Calcareous siltstone and thin bedded limestone overlies the argillite/siltstone which in turn is overlain by a repeated sequence of quartzite and phyllite.

Carbonate alteration, calcite veining, calcareous beds and limestone have been intersected throughout the sequence. This suggests that carbonate has been locally remobilized possibly as a result of de-calcification of the carbonate rich units that are occasionally strongly silicified and gold bearing. Quartz - sulphide veins accompanied by silicification have been intersected in drill holes with thick feeder veins of quartz breccia (10 - 20 metres) in several drill holes.

Gold occurs with quartz veins containing oxidized or sulphide mineralization. The quartz breccias tend to form well defined steeply dipping planar veins cross cutting the stratigraphy with associated stock work veins in the thick bedded competent quartzite (breccia in filling) and argillite (anastomosing veins). The carbonate horizons are the most strongly silicified with small amorphous type quartz-sulfide veining.

Gold grades appear to be enriched in the partially oxidized near surface quartz veins and breccias. Hole # 558 intersected 9.15 metres grading 3.72 g/t between 40 and 48 metres depth. Quartz sulphide mineralization averaged 1.58 g/t over 9.5 metres 40 metres below the upper intersection. A thick quartz vein with 60 % massive arsenopyrite and pyrite in drill hole # 562 yielded an assay of 2.6 g/t over 1.1 metres near the 200 metre depth in carbonaceous argillite. Hole #566 drilled 20 metres north of the RC-3 hole intersected multiple low grade gold zones which when combined total 56.5 metres grading 1.83 g/t. Hole # 568 which is a further step out to the north intersected a broad low grade stock work zone which assayed 0.42 g/t over 39 metres. Hole #571 yielded only very low grade assays from intervals of silicified carbonate beds. Hole #572 intersected a 20.5 metre interval of mineralized quartz-arsenopyrite breccia which averaged 0.99 g/t gold and a vein stock work zone averaging 1.88 g/t gold over an interval of 16.5 metres.

Near the centre of the Shamrock, at the 3M occurrence drill holes intersected a quartz-sulphide vein stockwork zone grading 2.36 g/t gold over 12.0 metres (#575) and 3.3 g/t gold across 6.0 metres (#578). The intersections are approximately 50 metres apart on the same horizon east of a major northwestly trending quartz-scorodite vein structure. This appears to be the same feeder vein intersected in drill hole #572.

On the North Face a vertical drill hole (#576) intersected an altered and mineralized vein stockwork zone that assayed 3.3 g/t over 7.5 metres.

Economic Assessment

The Shamrock zone is a sediment hosted (probable plutonic-related) deposit type. The rocks underlying the Shamrock area are well bedded siliciclastic and calcareous rocks of Lower Cambrian or Upper Proterozoic age. Alteration is widespread with quartz-sulphide stringers, silicification, sericitization, pyritization and argillaceous minerals. Structures within the Shamrock area include upright folds and high-angle normal faults all of which have strong spatial association with plutonic-related type deposits. Geochemical analysis of soil, drill core, and rock samples in the Shamrock area indicates a close correlation between gold, arsenic, antimony, and bismuth which is also consistent with the plutonic related gold deposit types elsewhere.

Economic concentrations of gold within the stock work zones are expected to occur in stratigraphically controlled irregular masses adjacent to steep dipping planar quartz breccia veins that in-fill major structural zones and cross cut the stratigraphy. Proximal ore in plutonic related deposits is often high grade ranging from 5 - 30 g/t gold. Grades generally decrease in distal areas around the intrusion.

The size of potential economic gold bearing masses within the horizon are expected to range form 1 - 10 million tonnes. Mapping and scattered drill holes have located at least eight anticlinal zones with indication of multiple stacked zones at several locations. Drill hole RC-3 intersected three stacked zones of 15 - 25 metres thickness over a vertical interval of 105 metres on the east side of the QB feeder vein. Drill hole #501 intersected the lower horizon 100 metres southeast of the RC-3 intersection on the trend of the fold axis. Another drill hole (#566) intersected all horizons 20 metres north of the RC-3 intersections. The volume of the individual cresent-shaped and tapered bodies represented by the anticlinal stockwork/replacement bodies with the above dimensions is approximately 25,000 to 45,000 cubic metres (62,500 to 112,500 tonnes). The number of potential multiple sub-parallel and stacked bodies with adjacent feeder veins located around the Ketza Uplift represents a potential resource of several million tonnes.

Carbonate rich rocks noted near the centre of the uplift have been skarnified as observed in drill hole intersections. No gold bearing skarns or disseminated gold mineralization without stockwork vein mineralization has been located as yet but several of the possible feeder structures have not been drilled in areas where potential carbonate rich rocks are located.

The large quartz "blowout" located near the centre of the uplift was discovered in 1988 and consists of a large area of massive white quartz boulders variably mineralized with sulphides. Gold assays of boulders throughout the area are erratic and locally contain high-grade values. Little advanced exploration (i.e. drilling) was conducted on the "blowout". Very little is understood of the "blowout" structure but with the recent discovery of large massive gold-bearing quartz veins at Pogo the "blowout" is a potential economic target.

Careful mapping of lithologies and structures is recommended before locating drill holes in new target areas. Systematic drilling will be required to define the limits of the system and define possible high grade zones within this very large hydrothermally altered system.