VIKING GOLD YELLOWKNIFE PROPERTY
Geochemical Results Identify a New Prospective Area On Viking's Morris Lake Gold Property, N.T.
TORONTO, ON, January 15, 2006 - Viking Gold Exploration Inc. ("Viking Gold" or "the Company") announces preliminary results from a late field season humus sample geochemical survey, collected from bog areas on trend with the known Viking Zone. A set of six figures is attached to assist understanding the progress made in 2005.
Setting and Background
Figure 1 illustrates the property location in relation to the Discovery Mine which produced one million ounces gold at a grade of 1 oz/ton, about 17 km to the north of Morris Lake, and to the world class Giant Yellowknife and Con Mines (seven and five million ounces respectively) at Yellowknife 75 km to the south. This Figure also identifies the three land parcels controlled by Viking Gold as follow: (green) the optioned core Viking Yellowknife leases on which the original gold discovery was made in 1946; (red) the virtually surrounding Max claims purchased for shares by Viking Gold in 2004; and (yellow) the claims staked in March 2005 by Viking Gold to provide protection of the trend to the south.
The initial trenching and diamond drilling by Athona and Viking Yellowknife in 1946 and 1947 (designated "A- **") was limited to the narrow Viking Zone along a distance of about 400m south from the shaft, plotted on Figure 3 to display all the holes of 1 inch diameter or more which have been drilled on the zone since discovery. Gold values are plotted as red bars to 30g/t.
In 1988 - 89 Canamax Resources (designated "Vk- 88-** or Vk-89-**") re-drilled the Viking Zone to verify the earlier drilling, and concluded that the results were comparable but that they had not identified an economic deposit. In 2005 Viking Gold drilled 18 holes (designated "V-05- **"), 10 of which were within the area tested by the previous companies and 8 of which extended the zone 300m to the south. The most southerly four holes yielded gold values as high as 32 g/3.0m (approximately 1 oz/t across 10') and 16.7 g/1.63m (approximately 0.52 oz/t across 5.35') within a zone 150m wide, much higher value-widths than those intersected in the Viking Zone to the north. The drilling must be continued southerly to determine the extent and continuity of these newly discovered gold-bearing veins. Rock outcrop is sparser and less continuous in that direction, disappearing within a few hundred metres beneath a large "wet" bog, a vegetally overgrown pond.
The challenge we faced was to optimize drill target selection to locate concentrated and richer gold along the mineralized trend. Because Ginn had experienced success in the Timmins area in ore discovery using innovative geochemical surveys (1965 at Hollinger and 1969 at what has become the Hoyle Pond Mine) he applied a technique suggested by consulting geochemist Robert Jackson. When gold is anticipated beneath flooded land, sample the humus or peat.
Bog Sampling Geochemistry
Two types of bogs occur on the Viking property in heavily glaciated terrain. In general the topographic relief is gentle, with few hills more that 20 metres high. Rock outcrop is bare or thinly covered by bolder strewn glacial soil. The fractures and fault zones in the rock have been glacially gouged and are shallow valleys, wet during snow melt and rainy periods, but commonly dry or lightly spongy wet during dry weather. The vegetal growth consists of grass, caribou and related mosses, and small swamp shrubs such as alders and spruce trees, Such a valley is conspicuous beside and covering the Viking gold zone, believed to be a faulted contact between volcanic rocks and underlying slate and greywack, and mineralized with quartz, pyrite, pyrrhotite, galena, arsenopyrite, sphalerite and gold. Nutrients for the valley vegetation are carried from outcrops by snow meltwater and rain causing the valleys to be wet except during hot periods of summer. For convenience we called such areas "dry bogs".
In lower elevations and even more poorly drained depressions, small lakes and ponds can be seen to have been gradually overgrown from their margins inwards by floating vegetation such as water lilies, swamp grass and bulrushes. A floating mat formed on the water surface, with the annual new growth dying in the autumn and thickening the floating vegetal mat, held together by the tougher root structures. One can usually walk carefully on such a bog without falling through, but walking or jumping on the surface causes a visible wave motion of the surface. Over long periods of time the vegetal mat thickens from the top down, pushing it down to eventually rest on the bottom, decaying and forming a peat bog. During this natural process swamp gases rise to the surface, assisting the vertical movement of nutrients from the bottom rock and sediment to the vegetal growth above.
In 2004 Viking Gold carried out a test humus sampling survey of the valley beside the 50 year old minesite. Forty four samples were collected at 15m centres extending about 100m north and south of the mine shaft. The samples were sent to Acme Analytical Laboratories for analysis by ICP-MS for gold, silver, arsenic, antimony, bismuth, copper, lead, zinc, mercury and other elements which are commonly enhanced in and close to gold deposits. This ultrasensitive analysis has been commercially available for about ten years, dramatically changing the practice of seeking ore deposits by measuring minute contents of elements in enclosing rocks or soil cover. The results are anomalous over the zone of the Viking gold mineralization, encouraging Viking Gold management to extend the survey in 2005. A total of about 800 humus (or "bog") samples have been collected and analyzed as shown on Figure 2. The total dataset results were statistically studied by consulting geochemist Robert G. Jackson who presented a simple colour code for gold values. The red dots are considered to be definitely anomalous, the green dots possibly anomalous and the smaller yellow dots represent samples containing only background values. The white areas of the figure are largely outcrop or thin till cover and the green areas are "wet" bogs. The two red dots on Figure 2 at about 1120S and 1140S coincide with a visible gold intersection in Viking hole V-05-08 which assayed 141.34 g/0.10m (4.12oz/4"). There is a close correlation between the humus sample gold anomaly and the unexposed vein, just as there is beside the Viking Shaft zone mineralization. This justifies closer consideration of the red dot anomalies at the northern end of the shaft area which have not been drill-tested, and at the area near the baseline at 1440S, about 40m south of the high grade values intersected in holes V-05-09 and V-05-12 plotted on Figures 3, 4, 5 and 6.
When geochemist Jackson plotted an early version of Figure 2 he realized that the wet bog data should be statistically considered separately from the dry bogs because the different source and movement of the elements of interest. By determining the anomalous threshold of all the samples from three wet bogs, quite a different picture resulted as can be seen for gold (Au) in Figure 4 and for arsenic (As) in Figure 6. From north to south the three bogs are named West Bog, Big Bog and Peanut Bog.
Figure 4 is a contoured plot of the gold values in humus, expressed in terms of the statistically anomalous gold content. One of the exciting facts about this study is that the distinctive rusty weathering altered volcanic rocks penetrated by Viking holes V-05-09 to -12 discussed above can be traced across intermittent outcrop southerly for 350m to the northeastern edge of Big Bog, from which point the eastern edge of the bog is anomalous in gold for a distance of 260m southerly. At that point the gold anomaly appears to be offset to the western side of the bog along a transverse structure, to the south of which the western side of the bog is anomalous in gold content for 550m or more, being masked at its southern end by a sand plain. The more exciting fact is that Canamax Resources drilled two wildcat drill holes in their final days on the property in 1989, just before the company withdrew from their option and abandoned the area. Hole Vk-89-16 was drilled unknowingly into the gold anomaly, and returned the following values within the top 72m of the hole, a vertical depth of 50m: 16.9 g/t across 1.5m (approximately 0.51 oz/ 5ft.); 2.5 g/t across 3.0m; 9.3 g/t across 1.5m; 2.3 g/t across 1.35m; and 4.7 g/t across 2.4m. This hole was reportedly drilled because of specks of visible gold had been noted in the altered volcanic host rocks. The small Peanut Anomaly to the west suggests that the Big Bog gold anomaly might have a width of 300m before it is covered by the overlying sand plain.
Figure 5 presents cross sections at the northern extension of Big Bog anomalous zone and drill hole Vk-89-16 1100m to the south, both of which must be tested by deeper holes to determine the continuity and dip of the veins.
Finally, Figure 6 is included to illustrate the distribution of arsenic, one of the eight pathfinder elements which follow the pattern for gold or, in the case of mercury and zinc, suggest cross-cutting structures or enveloping halos.
Summary and Conclusions
During August and September three Viking winter-drilled holes were logged and sampled for the first time, disclosing a previously unrecognized vein zone with high gold values on section 14+00m south (900m south of the Viking shaft). Only minor mapping and no has been conducted south of section 14+00 south in an area of sparse outcrop to the edge of Big Bog, a large wet bog occupying much of the distance to the south where gold-bearing altered volcanic rocks have been reported by Canamax field personnel. A distance of 1100m southerly from section 14+00 south Canamax had drilled hole Vk-89-16 which intersected four significant gold values over a 72m length of core beneath the now-defined Big Bog gold anomaly.
A bog sampling geochemical program provided gold and pathfinder element distribution in an area unsuited to the previously applied exploration techniques of rock outcrop sampling.
The analytical results of about 190 humus samples have yet to be received and integrated with those which have generated the figures presented in this initial report, perhaps leading to a more precise presentation. A new area has been identified for drill testing, but it is not reasonable to assume that a geochemical anomaly faithfully defines economic mineralization. Canamax hole Vk 89-15, 90 m top the north, cut only weak gold values across narrow widths. More than one exploration technique should be applied if possible. The options available to us are currently being considered.
Viking has gained greater knowledge of the setting and potential of the Morris Lake gold property as a result of each of its three field programs. In the opinion of our experienced exploration officers the size of the visibly mineralized and geochemically anomalous area of gold mineralization is exceptional, and is decidedly worth serious exploration. It is better stewardship of the Company assets to complete data recovery, plotting and study before embarking on a premature drilling program.
Robert M. Ginn, P.Eng. President
January 15, 2006
Note: This is a report of work and initial observations of the Company president and project leader. The information contained herein is the result of mapping and core logging by Dr. Ginn, and sample collection by Company employees. No third person QP has reviewed the field observations nor plots of geochemical data. This is a progress report due to shareholders, not a financing document. It has not been submitted to a regulatory authority for approval.