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The Ikutahara Project

Commodity: Gold
Target: Low Sulphidation Epithermal Gold
Location: Northern Hokkaido
Size: 19,114 hectare

The Ikutahara Project is the Company’s most advanced project and comprises 56 prospecting rights applications. All applications have been accepted by the Japanese Ministry of Economy, Trade and Industry (METI). 23 of the 56 applications have been granted, allowing for advanced, more intensive exploration activities, including drilling. A further 15 of the 56 Ikutahara licenses are currently under process by METI and the company expects that these will be granted in 2018 to allow drilling on other key prospects.

The project covers 17 historical gold mines and workings. These prospects were discovered and intermittently mined between 1910 and 1943. Gold mining in Japan was suspended in 1943 under a government regulation aimed at focusing resources to more strategic commodities during World War II. Many of the historic workings active in the area at the time stopped in ore and never re-opened. The project area has seen only limited exploration since that time.

iku img1

Prospectivity

Japan’s third largest gold mine, Konamai, which operated between 1917-1974 and produced over 73 t or 2.3 Moz of gold at an average grade of 6.4 g/t5, is located along the same geological trend 20 kilometers northwest of the Ikutahara Project. The most significant historic gold production in Japan Gold’s Ikutahara project came from the Kitano-o mine (1924-43), reported to have produced 96,450 ounces at a grade of 5.9g/t5 of gold largely from the mining of gold-bearing eluvium associated with sinter deposits and sub-sinter epithermal veins. Lesser gold production is reported from selective hard rock mining of sub-sinter, and volcanic-hosted quartz-adularia-clay veins and stockworks both in, and around the Kitano-o mine area10. Production records sourced for the Ikutahara and Showa mines are include the following:

Kitano-o Gold District – Historic Gold-Silver Production Record4.

Mine

Tonnes

Gold g/t

Silver g/t

Operating Years

Source

Ikutahara

96,812

5.2

40.6

1934-1943

MMAJ, 1990

 

216

35.6

Not recorded

1960-1961

MMAJ, 1990

Showa

12,323

16.8

7.8

1934-1943

MMAJ, 1990

Regional setting and metallogeny

The Ikutahara Project lies in the Southwest Kuril magmatic arc, where Neogene volcanism has been active since the Early Miocene1. More than forty low-sulfidation epithermal gold and mercury deposits and prospects are distributed in northeast Hokkaido within the Southwest Kuril arc.

The project area is underlain by Miocene-Pliocene age volcano-sedimentary rocks, and older meta-sedimentary basement, that are prospective for low sulfidation-style epithermal gold-silver vein deposits. Multiple gold-silver and mercury prospects including documented mines and workings are located throughout the Prospecting Rights application area, and the majority comprise epithermal veins, associated with other hot-spring related features such as silica sinter, hydrothermal breccias and widespread hydrothermal alteration.

2017 Work program

Japan Gold has completed a compilation of all available published historical data on the gold mines and mineral occurrences present in the Ikutahara project area. Exploration field activities comprised first pass geologic mapping and sampling over the majority of the epithermal gold targets. The Company is currently developing high-priority drill targets at Ikutahara, specifically in the Kitano-o Gold District and historical Ryuo mine areas. The main focus being in and around the historic mines and workings, with the aim to rapidly progress these targets through the permitting phase so that they can be drill tested in 2018.

2017 Drilling

A drilling permit was granted and the Company's first scout drilling program was completed at the Akebono prospect in December 2017. Initial drilling results support the presence of high grade gold shoots in the Akebono vein system previously indicated by historic sampling of underground workings. Complete results can be found in the news release dated February 5, 2018

2018 Exploration Plans

Aggressive scout drill programs are planned to advance six high-ranked prospects in the Ikutahara Project in 2018. The six prospects include the historic mine areas of Kitano-o, Ikutahara, Showa, Sakinzawa, Ryuo and Saroma. Detailed surface mapping and sampling programs will run in parallel and seek to develop more targets associated with historic mines in the southern and northwestern parts of the Ikutahara Project.

 

Kitano-o Gold District

The Kitano-o Gold District comprising the Kitano-o, Ikutawara, and Showa mines and Sakinzawa workings, is underlain by a thick sequence of rhyolitic volcaniclastic rocks intruded by rhyolite-dacite flow domes, dykes and lavas10 2. These are part of the Late Miocene Ikutahara Formation which occurs in a 10-km wide, north-south trending basin known as the Monbetsu-Rubeshibe zone. These basin-fill rocks unconformably overlie meta-sediments of the Upper Cretaceous-Paleocene Yubetsu Group exposed to the east of the mine area and intersected in a 1990 MMAJ drill hole at about 700-m vertical depth below the Kitano-o mine1 4. Epithermal gold-silver mineralization in the Kitano-o-Ikutawara-Showa mine areas is closely related to the emplacement of the Maruyama Rhyolite dome, during sedimentation of the Ikutahara Formation10.

History

The historic Kitano-o Gold District comprises four known historic eluvial and hard rock gold mines and workings; Kitano-o, Ikutahara, Showa and Sakinzawa over an approximate 6 by 2.5 kilometer area. The district is highlighted by an extensive co-incident gold-arsenic-antimony mercury anomaly in stream sediment samples over the area.

MMAJ (Metals Mining Agency of Japan) conducted exploration over the Kitano-o Gold District and surrounding area as part of a metallogenic study of the region in the late 1980’s. Their work included geological mapping, gravity and CSAMT geophysical surveys, a low-density regional soil geochemical survey, petrological studies, age dating and culminated in the drilling of two vertical diamond holes testing geophysical targets.

The MMAJ work defined a large shallowly eroded epithermal system encompassing the Kitano-o Gold District, documented a close relationship between gold mineralization and rhyolite intrusions and provided valuable information on the depth to basement rocks (up to 700 m).  

Historic production from Kitano-o (96,540 ounces at a grade of 5.9 g/t)5was largely from rich residual surface gold deposits (gold-bearing eluvium). Lesser gold production is reported from selective hard rock mining of narrow sub-sinter quartz-adularia-clay veins and stockworks hosted in extensively altered rhyolitic volcaniclastics, flow-domes, lake sediments and silica sinter deposits.

The workings at Kitano-o are represented by numerous shallow diggings, pits, sluicing benches, and collapsed tunnels distributed over a 2.5 by 0.4 kilometer east-west alignment of altered conical hills and curve-linear ridges. The hard rock workings at Ikutahara and Showa, at the southern end of the Kitano-o Gold District, are defined by a series of collapsed tunnels and large mine dumps distributed along a north-northwest trending ridgeline.

Kitano-o historic reports3 4 10 indicate that free gold was won from rich eluvial placer deposits described as a yellow-brown clay-sand-boulder soil overburden (“Dosha-ko” ore). The auriferous eluvium averaged about 5 m thickness (max. 15 m thick) with a reported gold grade of about 5 g/t Au (max. 40 g/t Au) in the most productive areas. The dosha-ko gold deposits were formed by the disintegration and oxidation of the underlying hydrothermally altered mineralized bedrock under freezing-and-thawing cold-climate conditions (“cryogenic weathering”)3.

Multiple narrow gold-quartz veins (>130) were reportedly worked beneath and surrounding the auriferous eluvium, however, mine records on the depth of mining of the veins is sparse. The veins varied in width from <1 to 30 cm and thicker mineralised veins were only rarely encountered. Strike-lengths varied from several metres to several 10’s of metres and veins longer than 100 m were rarely encountered. Several types of mineralised epithermal veins were reported in the district; banded quartz-chalcedony-adularia veins, fine-grained crystalline quartz veins, clay-rich veins and a late-stage porcellaneous clay veins3 4.

iku image1Banded quartz-chalcedony-adularia-limonite vein cobble from historic working immediately beneath the silica sinter deposit (field of view is about 10 cm wide); SAM02175: 3.02 g/t Au, 3.13 g/t Ag, 2.91 ppm Hg, 890 ppm As, 60.5 ppm Sb

The Sakinzawa workings are located at the northern end of the Kitano-o Gold District. Alluvial and colluvial gold was worked along Sakinzawa creek and its broad floodplain during the 1930’s, however, there are no production records. Small hard rock gold workings on quartz breccia and stockworks have also been found along Sakinzawa creek and on the western flank of Maruyama peak, which is a prominent rhyolite flow-dome landform.

MMAJ and the NICAM Joint Venture (Nissho Iwai Corp/Austpac/MIM) carried out exploration work on Sakinzawa creek and Maruyama ridge in the 1990’s. This work included geological mapping, ground geophysics (CSAMT), trenching, RC drilling and one diamond drill hole by MMAJ.  

Trenching in Sakinzawa creek exposed a 100m x 300m zone of silicified, brecciated and quartz veined mudstones and rhyolitic volcanic rocks beneath shallow colluvium and returned highly encouraging channel-chip results including 9 m at 24 g/t gold and individual 1 meter samples ranging from 15 to 109 g/t Au8.

The 300 m vertical diamond hole (2MAHB4) drilled by MMAJ on Maruyama ridge intersected silicified mudstone-sandstone-volcanic breccia to 140 m depth containing minor narrow quartz veins assaying up to 2.3 g/t Au4. This is a useful stratigraphic hole but a poor test of the gold target.

Showa and Ikutahara prospects contain historic workings developed on epithermal veins and disseminated-stockwork zones at the southern end of the Kitano-o gold district. Small-scale underground gold production at Showa occurred between 1934 and 1943 at an estimated average gold grade of about 17 g/t Au 4.

The Ikutawara lode system strikes ENE-WSW to E-W, with lesser branching veinlets developed in more N-S orientated fracture sets. The mineralised corridor exceeds up to 700 m in strike length, and is characterized by veinlets or stockworks with individual strike lengths of 20-30 m and widths of 1-20 cm. The variation in Au values across the prospect is reportedly “extreme”, however on average, a higher tenor of mineralisation is observed associated with an increase in adularia content and/or at higher elevations2 4. Supergene weathering and enrichment is also suspected to influence primary gold values. Ore minerals include native gold, argentite, cinnabar and pyrite, whilst gangue comprises quartz, adularia, calcite and kaolinite7.

The Showa lode system trends primarily WNW-ESE to ENE-WSW, and dips steeply (70-90°) to the north or south over an approximate strike length of 250 m. Individual veins have a maximum width of 2.0 m. Branching fracture-controlled quartz veinlets trending NNE are described to form bonanza zones at their intersection with larger WNW-ESE quartz vein structures. Au values reportedly vary, or are more erratic in the larger veins, and are more consistent in veinlets4 7.

Japan Gold 2017 work program

The Kitano-o Gold District is highlighted by the largest coherent geochemical anomaly returned from the 2016 SAMJ stream sediment survey, with a coincident Au-As-Sb-Hg anomaly defined over a 5-km by 2-km area centered on Kitano-o. (refer to the Company’s website news release dated March 3, 2017.

Numerous historical gold workings have been identified along the east-west Kitano-o mine trend in the latter half of 2017. Mapping has so far defined a +2.5 km-long, by 250-400m wide east-west oriented zone of resistive silica-adularia/clay-limonite altered, volcaniclastic rocks and silica sinter (the latter largely as residual boulders). Outcropping and stockpiled colloform-crustiform and lattice-blade textured chalcedony-quartz veins and quartz sealed hydrothermal breccias, some of unresolved width, and associated stockwork veining, are widespread.

ik img2Interpretive geology for the Kitano-o mine area (adapted from Bamba & Saito, 1956) with present day and historical mine workings based on recent surveying and published MMAJ (1990) data

The historic Maruyama Ridge gold workings reported by NICAM and identified during SAMJ’s 2017 mapping, comprise a series of trenches and pits distributed over a 120-m x 100-m area on the ridge crest. Five trenches trending NNE-SSW were recorded; these vary in length from 10-m to 120-m and have exposed a parallel array of mineralised banded and lattice bladed textured quartz-chalcedony-limonite veins and linear-stockwork zones. The workings occur about 500-m north of mineralised stockworked and brecciated outcrops located in Sakinzawa Creek, which were previously tested by NICAM trenching and RC drilling.

Two mineralised zones, located about 300 metres apart along Sakinzawa Creek, were identified during the 2017 mapping and host diffuse thin quartz veins (<1-10mm wide). The outcrops represent small windows of altered and mineralised bedrock exposed within a broad flat river bed that is largely covered by alluvium.

Mapping and sampling was commenced over the Showa and Ikutahara mine areas and included mapping of historic mine entrances and limited rock exposures and sampling of ore and wasted dumps.

Rock Sample Results Summary

Assay results were received for 270 selective grab and chip samples collected from mine dumps, workings and outcrops over the Kitano-o Gold District.

Kitano-o Mine: One mine dump sample from Kitano-o gave a high gold result of 54.4 g/t Au. Eight other mine dump and outcrop samples returned gold results ranging from 1.01 to 8.59 g/t Au. Corresponding silver results are generally low and range from 1.16 to 13.2 g/t Ag.

Ikutahara Mine: Two mine dump samples from the Ikutahara workings returned high gold results of 37.3 g/t Au and 35.3 g/t Au. Seven other mine dump samples returned gold results ranging from 2.21 to 9.03 g/t Au. Corresponding silver results are generally low and range from 2.71 to 35.5 g/t Ag.

Showa Mine: Five mine dump samples from the Showa workings returned high gold results of 93.3 g/t Au, 36.4 g/t Au, 19.35 g/t Au, 18.20 g/t Au and 17.6 g/t Au. These samples contain visible electrum/free gold disseminated in thin comb quartz veins.  Nine other samples returned gold results ranging from 1.31 to 6.39 g/t Au. Corresponding silver results are generally low and range from 1.6 to 22.9 g/t Ag.

  • ik_img3.png Showa mine dump sample, visible gold and silver sulphosalts in thin quartz stockworks cutting silicified fossiliferous laminated tuffaceous mudstone (top image), bottom image zoomed in field of view is approximately 1 cm; SAM01867: 93.3 g/t Au, 17.35 g/t Ag, 21.4 ppm Sb
  • ik_img4.pngShowa mine dump sample, visible gold in thin quartz stockworks cutting silicified laminated mudstone (top image), field of view in bottom image is about 10 cm; SAM01894: 19.35 g/t Au, 8.49 g/t Ag

Sakinzawa Workings: Three outcrop samples of quartz stockworked rhyolite in the Sakinzawa creek returned gold results ranging from 1.34 to 17.2 g/t Au , supporting a reconnaissance outcrop sample of 43.8 g/t collected in 2013. Corresponding silver results are generally low and range from 2.56 to 15.85 g/t Ag.

ik img5Gold-bearing quartz stockwork (bottom image) from altered rhyolitic volcanic breccia outcrop (top image); SAM02069: 17.2 g/t Au, 15.85 g/t Ag, 452 ppm As, 20 ppm Sb

Geological mapping completed by the Company over the Kitano-o Gold District has confirmed the presence of a significant gold-bearing epithermal system hosted in Late Miocene rhyolitic volcanics and associated intrusions. The presence of widespread silica sinter boulders and bedded sinter outcrops at Kitano-o define the paleo-surface during gold deposition and importantly the well preserved nature of the epithermal mineralisation in the district. 

Rock chip results reflect gold and silver grades from historic mine records and confirm the presence of high-grade mineralization in the district. The presence of high-grade material in mine dumps is also supportive of mineralization being open at the time of mine closure.

iku img8Kitano-o silica sinter outcrop SAM02139: 1.9 ppm Hg, 93.4 ppm Sb, low gold

Plus Minerals LLC completed a 2-week alteration mapping program over the Kitano-o District in November 2017. Key findings and conclusions from this program include:

  • Alteration zonation from surface downward 1. alunite-kaolinite-dickite (steam-heated alteration), 2. silica sinter (paleo-water table), 3. illite-smectite and 4. Illite, the deepest levels sampled at surface. Outward zonation to an illite-chlorite assemblage. This zonation supports the interpretation that the Kitano-o District represents the upper levels of a shallowly eroded, hot-spring gold system
  • Widely distributed silica sinter, and deep acid overprinting to depths of 100m at Kitano-o and >230m at Showa, again, indicating widespread hot spring activity. A silica sinter outcrop found at 470 m elevation, marks the approximate position of the paleo-water surface for the epithermal system.

ik_img6.jpgKitano-o Gold District, Significant Gold Results from Surface Rock Sampling on Simplified Geology

Ikutahara Project: Kitano-o Gold District Significant Rock Chip Results (>1 g/t Au)

Prospect Sample No. Sample Type Au g/t Ag g/t Hg ppm As ppm Sb ppm Se ppm Te ppm Tl ppm Cu ppm Pb ppm Zn ppm Mo ppm
Ikutahara SAM01893 Dump 37.3 35.5 2.82 28.9 16.6 2 0.26 2.99 3.6 7.2 4 3.11
Ikutahara SAM02216 Dump 35.3 26.3 4.37 74.2 23.9 2 0.41 3.3 6.5 6.5 6 1.4
Ikutahara SAM01889 Dump 9.03 24.4 8.41 30 40.1 4 0.11 0.44 2.5 5.7 3 4.83
Ikutahara SAM01888 Dump 7.47 3.87 2.76 60.2 37.3 1 0.19 0.32 3 7.5 4 2.87
Ikutahara JG0011 Outcrop/Adit 6.08 6.67 tba 48.7 13.75 <1 0.12 0.41 4 14.5 7 4.68
Ikutahara SAM01897 Dump 3.99 7.41 8.39 855 27.4 5 <0.05 0.31 23.4 56.9 35 5.07
Ikutahara SAM01886 Dump 2.59 2.71 2.04 24.5 7 1 0.12 0.88 3 8.6 7 1.62
Ikutahara SAM01891 Float 2.46 7.24 3.4 71.3 20.4 2 0.07 0.31 2.9 4.6 5 4.1
Ikutahara SAM02006 Float 2.45 5.52 0.584 14.6 13.9 <1 <0.05 0.29 0.7 0.7 2 3.73
Ikutahara SAM01892 Float 2.21 5.97 4.77 40.6 14.5 <1 <0.05 2.97 7.5 8.6 8 2.28
Ikutahara JG0017 Outcrop 1.04 2.61 4.16 593 21 2 <0.05 0.08 17.2 25.1 20 3.7
Showa SAM01867 Dump 93.3 17.4 5.74 2 21.4 <1 <0.05 <0.02 0.5 9.7 <2 2.75
Showa SAM01866 Dump 36.4 11.6 4.75 1.2 12.45 1 <0.05 <0.02 0.5 18.4 <2 2.35
Showa SAM01894 Dump 19.35 8.49 3.57 1.7 11.05 1 <0.05 <0.02 0.9 10.9 2 2.12
Showa SAM01858 Dump 18.2 19.3 7.14 1.1 21.4 <1 <0.05 0.02 0.5 5.4 <2 1.7
Showa SAM01842 Dump 17.6 22.9 15.43 <0.2 16.35 1 <0.05 0.02 0.9 3.2 <2 4.04
Showa SAM01857 Dump 6.39 11.1 13.07 <0.2 16.65 4 <0.05 0.02 0.6 12.9 <2 2.94
Showa JG0081 Outcrop/Adit 5.26 3.32 tba 7.7 18 3 0.12 0.04 0.6 21.4 2 2.03
Showa SAM02210 Outcrop/Adit 4.43 1.99 2.11 1.7 11.95 0.5 0.05 0.03 0.3 19.3 1 2.1
Showa SAM02211 Outcrop/Adit 3.05 1.6 2.17 1.9 12.4 0.5 0.05 0.03 0.7 15.7 1 0.98
Showa SAM01856 Dump 2.74 6.13 14.24 <0.2 9.58 1 <0.05 0.03 0.7 13.4 <2 2.92
Showa SAM01865 Outcrop 2.7 7.11 12.41 2.1 14.8 1 <0.05 <0.02 0.7 14 <2 3.47
Showa SAM01861 Float 1.76 2.37 0.883 0.5 7.79 <1 <0.05 0.02 0.5 6.8 <2 0.76
Showa SAM01860 Float 1.63 11.4 61.2 <0.2 12.35 17 <0.05 0.02 0.6 5.3 <2 1.51
Showa SAM02209 Outcrop/Adit 1.47 1.73 22.7 8.6 24.4 3 0.2 0.04 3.8 33.2 2 3.56
Showa JG0080 Outcrop 1.39 0.41 2.31 0.8 8.51 <1 <0.05 <0.02 0.2 54.2 <2 1.4
Showa SAM02189 Dump 1.31 13.8 11.1 73.1 27.6 2 0.23 0.17 8.7 6.8 2 9.45
Showa JG0079 Outcrop 1.21 3.09 2.76 2 14.8 1 <0.05 0.02 0.4 15.6 3 0.96
Kitano-o JG0069 Dump 54.4 6.99 tba 694 52 3 10.3 0.02 15 26.4 7 5.33
Kitano-o SAM02155 Dump 8.59 3.45 0.393 314 14.35 1 0.05 1.21 8.4 2.8 4 2.67
Kitano-o SAM02115 Outcrop/Bench 5.78 13.2 0.096 78.5 9.12 1 <0.05 1.29 2.3 19.8 3 1.69
Kitano-o JG0077 Dump 3.09 28.7 0.992 51.9 15.95 1 0.08 1.63 5.8 12.5 7 2.6
Kitano-o SAM02175 Dump 3.02 3.13 2.91 890 60.5 5 5.06 0.04 12.4 24 7 4.56
Kitano-o JG0078 Outcrop 1.74 4.15 2.05 47.2 20.3 <1 3.26 3.45 1.8 5.2 4 1.37
Kitano-o SAM02117 Dump 1.6 4.78 10.5 3 15.5 1 <0.05 0.07 0.9 12.1 7 1.52
Kitano-o SAM02120 Dump 1.29 1.16 2.57 29.7 35 <1 <0.05 0.04 1.3 4.9 3 1.92
Kitano-o SAM02156 Dump 1.27 0.62 0.292 97.6 8.91 1 0.05 0.55 2.5 2.2 2 2.54
Kitano-o SAM02171 Outcrop/Adit 1.22 1.96 0.574 88.7 15.55 2 <0.05 1.79 3.3 11.4 6 2.86
Kitano-o JG0018 Outcrop 1.17 1.27 0.191 60.4 17.15 1 0.1 2.57 4.7 12.9 3 1.9
Kitano-o JG0064 Outcrop 1.03 8.21 5.19 347 36.3 2 <0.05 1.7 6.5 34.4 23 6.51
Kitano-o SAM02149 Dump 1.01 7.86 2.89 139.5 43.2 2 3.33 0.16 4.9 17 11 6.47
Sakinzawa 50004 Outcrop 43.8 27.2 0 282 19 0 0 10 3 7 6 6
Sakinzawa SAM02069 Outcrop/Creek 17.2 15.9 0.231 452 20 3 <0.05 7.84 7.4 9.5 5 5.77
Sakinzawa SAM02058 Outcrop/Creek 4.34 2.56 0.067 43.7 136 1 <0.05 2.72 2.8 7.4 20 2.99
Sakinzawa 50001 Outcrop 1.53 6.7 0 356 35 0 0 10 3 4 5 7
Sakinzawa SAM02071 Outcrop/Creek 1.34 3.24 0.049 116.5 17 2 <0.05 7.82 2 3.7 2 3.91
Sakinzawa 50007 Outcrop 1.22 2.8 0 258 24 0 0 10 3 7 4 8
Sakinzawa 50003 Outcrop 1.09 3.1 0 278 17 0 0 10 3 7 3 6

The Kitano-o District represents a unique hot-spring style of ‘high-level’ gold mineralization. Sinter deposits generally represent the surface expression or outflow of epithermal vein systems developing at depth. Using a hot-spring model, mineralized veins are expected to be thin or might pinch-out completely towards surface, and/or split into stockwork zones near or just below the sinter/paleo-surface level. These stockworks can coalesce into thicker veins/ore shoots along feeder (upflow) structures at depth. The relatively narrow gold-bearing structures mined historically near-surface immediately below the sinter paleo-level may transition into thicker high-grade veins at depth. Conceptually, high-grade gold mineralization in thicker veins may be present anywhere from 50 to 250 m beneath the paleo-water table (sinter) beneath these high-level deposits, and down to the lower basement contact. SAMJ propose to target these zones in their 2018 drill program.

ik_img7.jpgIkutahara Project Area - Epithermal Model (Modified from Sillitoe, 1992; Sillitoe, 2015)9

Ryuo Prospect

The Ryuo mine was developed prior to 1943 on five vein zones. Underground workings of the Jinja and Shouei veins were mapped and re-sampled during the 1950’s, with the Metal Mining Agency of Japan (MMAJ) publishing these results in 19901. The compiled data shows workings developed on up to six levels to a depth of 75 m below surface, with veins reported up to 1.6 m wide. Incomplete production records indicate more than 5,000 ounces of gold were produced between 1938 and 1953, with grades averaging 8.9 g/t gold and 36 g/t silver4.

The Shouei vein was reportedly mined over a 200m strike length to a depth of 90m, and averaged a metre-wide, with average grades of 5.21 g/t gold and 132 g/t silver. The Jinja vein workings measured 120m long x 70m deep, with an average vein width of 1m, and average grades of 13.99 g/t gold and 110 g/t silver4. High-grade gold-silver quartz veins were mapped on all four of the lower levels of the Jinja vein system. Chip-channel samples collected at intervals spaced between 0.3 m and 4.7 m along the strike of the vein indicates significant high-grade shoots on levels 4, 5 and 6. (refer to the Company’s website news release dated February the 9, 2017.

ik_img8.jpg Ryuo Mine, Jinja vein workings. Long section of underground development showing highlights of historic channel sampling4

Japan Gold 2017 work program

Japan Gold mapping at Ryuo has identified a 1,000 m by 400 m zoned alteration system comprising clay alteration enclosing a NE-SW oriented zone of silicified rhyolitic volcaniclastic rocks hosting gold-silver bearing quartz veins and hydrothermal breccias. The published MMAJ channel samples confirm potential for the discovery of high grade epithermal gold/silver mineralization at the Ryuo mine. No drilling or modern exploration has been undertaken in the area, and Japan Gold plans to drill numerous targets at Ryuo in 2018.

Akebono Prospect:

The Akebono prospect is located in the northeast corner of the Company’s Ikutahara Project within the granted Prospecting Rights licenced area. A drilling permit was granted last year and the Company's first scout drilling program was completed at the Akebono prospect in December 2017. Initial drilling results support the presence of high grade gold shoots in the Akebono vein system previously indicated by historic sampling of underground workings. http://www.japangold.com/index.php/news/2018/85-japan-gold-intersects-high-gold-grades-in-its-first-drill-program-in-japan

Discovered in 1931, underground exploration at Akebono was carried out between 1938 and 1940, however, no production records were reported prior to government imposed gold mine closures in 1943. In the 1960’s the underground workings were re-entered and sampled along two drifts. The known workings consist of two 120 m long drives and several winzes sunk to a vertical depth of approximately 100 m. These were developed on a moderate to steeply dipping, 0.5 to 4 m wide epithermal gold-silver bearing quartz vein. Several high-grade samples were reported, including 1.2 metres @ 446 g/t gold and 376 g/t silver and 0.65 metres @ 91.5 g/t gold and 4,891 g/t silver4.

The main Akebono vein trends ENE-WSW and Japan Gold’s prospect mapping has shown that along its strike, banded and bladed textured quartz-chalcedony veins up to 4 m wide crop out over a 600m long NE-SW trend that is open in both directions along trend. Rock samples collected by the Company have returned encouraging gold and silver results up to 20.7 g/t Au and 290 g/t Ag from vein float.

The high historical gold and silver grades reported, and vein widths mapped up to 4 m, indicate the area around the Akebono workings, which has had no modern day exploration, has great potential for further high grade discoveries.

ik_img9.jpgTop plate: Entrance to the collapsed upper drift (drive) along the Akebono vein

ik_img10.jpgBottom plate: Bladed quartz vein texture Akebono vein

Saroma-Chitose-Taiho Prospects:

The historic Saroma, Taiho and Chitose gold workings are developed on epithermal veins and sheeted vein systems located along an incised NE trending valley about 2-km SE of the Kitano-o District. The veins occur within an en echelon, left-stepping fault system that extends over at least a 4-km strike-length3. The host fault system defines the course of the large Saroma River and the rivers bedload features abundant epithermal quartz-chalcedony-adularia vein boulders.

History

Operated during the 1930’s, records show the Saroma mine produced 13,189 tons of ore at an average grade of 9.7 g/t gold between 1933 to 19394. There are no production records from Taiho and Chitose, however, there is an inference from historic records that exploration and mining commenced in these latter two areas immediately prior to the time of gold mine closures in 19431.

Japan Gold 2017 work program

Geological mapping conducted by SAMJ early in 2017 located the historical workings in the Saroma and Taiho Prospect areas and confirmed the steeply dipping veins exposed there, strike ENE-WSW to NE-SW, and at Chistose, E-W. Veins show well developed colloform-crustiform banding, cockade crustiform and locally lattice bladed quartz textures, hosted by intercalated Mesozoic basement sandstone and mudstone. Some of the veins are emplaced along the contacts of rhyolite porphyry dykes.

The Saroma prospect hosts at least three sub-parallel vein sets traceable along a 1.2 kilometer, open-ended strike zone. Vein thickness varies from a few centimeters to approximately 5.0 meters, as observed in the historical workings.

ik_img11S.jpgSaroma prospect; white colloform-crustiform chalcedony-quartz-adularia veins and locally complex quartz-breccia veins and bladed carbonate replacement textures

An open historic mine drive identified at Taiho during 2017 is accessible via a short portal located beside the main Taiho creek. The structure, named the Honrhyu No. 1 Vein, trends ENE-WSW, dips 70-75° NW, and is described by the MMAJ as being up to 7-m wide and having a 1.5 kilometer strike-length4. The Honrhyu Vein appears to pinch and swell (<1-2.5-m wide) along a 25-m underground section of the drive and is open at both ends of this working. A series of steeply dipping WNW-ESE trending sheeted quartz veins and breccias were mapped on the eastern edge of the drive, and these seem to splay (‘horse-tail’) off the main vein structure near the second portal entrance on the river. The Honrhyu Vein can be traced at surface about 450 meters along a ENE to NE strike with a widest mapped vein thickness of 1.60 meters. The Company’s prospecting work is yet to cover the Chitose Prospect area in detail.

Six of nineteen samples taken at Saroma returned gold and silver results ranging from 2.21 to 10.85 g/t Au and 17.9 to 136 g/t Ag, respectively. These samples are from angular boulders and outcrops of milky white colloform-crustiform chalcedony-quartz-adularia(?) veins and locally complex quartz-breccia veins and bladed carbonate replacement textures. The fine-grained nature of quartz combined with vein textures evident at Saroma and Taiho indicate textures typical of boiling zone and gold precipitation in epithermal systems.

Ikutahara Project: Saroma Prospect Significant Rock Chip Results (>1 g/t Au)

Prospect

Sample No.

Sample Type

Au g/t

Ag g/t

Hg ppm

As ppm

Sb ppm

Se ppm

Te ppm

Tl ppm

Cu ppm

Pb ppm

Zn ppm

Mo ppm

Saroma

SAM01824

Float

10.85

127

0.09

17.9

27.4

7

0.1

1.25

8.6

60

2

8.27

Saroma

SAM01832

Float

4.67

136

0.07

15.8

53.2

5

0.44

0.37

6.3

7.4

2

5.65

Saroma

SAM01828

Float

2.72

45

0.11

18.5

46.1

1

0.07

0.012

5.5

2.8

<2

5.82

Saroma

SAM01830

Float

2.21

41

0.09

22.9

45.8

1

0.06

0.71

7.6

4.2

3

5.69

Saroma

SAM01827

Float

1.97

129

0.1

22.2

48.9

3

0.35

1.17

8.1

7.3

3

8.31

Saroma

SAM01829

Float

1.08

17.9

0.15

165.5

43.1

2

0.35

2.3

8

3.8

3

14.85

Saroma

SAM01835

Outcrop

1.01

52

0.11

52.8

40.3

2

<0.05

2.01

24.9

12.2

8

9.28

The vein systems mapped at Saroma and Taiho are sufficiently large to host multiple ore shoots if the hydrothermal processes conducive to high-grade gold deposition were active during their formation. A follow-up exploration program for these prospects is planned.

ik_img12.jpgSaroma Prospect, Significant Gold Results from Surface Rock Sampling

1 Watanabe, Y (1996). Genesis of Vein-hosting Fractures in the Kitami Region, Hokkaido, Japan, Resource Geology, 46(3), pp 151-166.

2 Gold Mines in Japan, The Mining & Materials Processing Institute of Japan, 1990.

3 Watanabe, M (1940). Showa – Kitano-o type gold deposits, J. Japan, Assoc. Min. Petr. Econ. Geol. 23: pp. 28-39 (in Japanese).

4 Metal Mining Agency of Japan, March 1990, Geological Survey Report for Fiscal Year 1989,  Northern      Hokkaido Area B - Metalliferous Deposits Overview.

5 Garwin, S., et al. 2005. Tectonic Setting, Geology, and Gold and Copper Mineralisation in the Cenozoic Magmatic Arcs of Southeast Asia and the West Pacific, Appendix 1, Economic Geology 100th Anniversary Volume, p 891-930.

6 Maeda (1990) Mineralization Ages of Some Epithermal Gold-Silver Vein-type Deposits in the Central Kitami Mining District, Hokkaido, Japan.

7 Bamba & Saito (1956) Gold-silver deposits of Kitano-o and Several Other Mines, Ikutahara Gold Mining District, Kitami Province, Hokkaido.

8 Austpac Gold NL company reports 1992-1993.

9 Sillitoe et. Al. (2015) Epithermal paleosurfaces. Mineralium Deposita (2015) 50:767-793.

10  Maeda, H. (1996). Relationship between volcanic activity and epithermal gold-silver mineralization: Example from Kitano-oh mine area and vicinity in Kitami metallogenic province, Hokkaido, Japan, Resource Geology 46 (5): pp. 279-285.