The Oakley Gold Project consists of 107 federal lode mining claims and several Utah State leases (comprising 1,360 acres) located in Cassia County, Idaho, approximately 15 miles south of the town of Oakley and just north of the Utah/Nevada border.
The project targets a classic epithermal hot spring-type gold exploration target with two primary geologic targets: Blue Hill Creek and Cold Creek.
In July 2008, Otis initially acquired the right to earn a 100% interest in the Blue Hill Creek target in exchange for the issuance of 6.0 million shares and cash payments of $400,000 spread over five years. Subsequently, the company staked the Cold Creek target in October 2008 located approximately 6 miles north of the Blue Hill Creek target. To consolidate its land position, Otis has staked a number of federal mining claims between the two targets (which are approximately 3 miles apart) and has acquired an 80 acre Utah state lease to consolidate its land position in the area. To date, Otis has earned into an 80% position on the Blue Hill Creek claims and has a 100% interest in all other Oakley Project claim blocks and the State Lease.
Gold mineralization at both Blue Hill Creek and Cold Creek was originally discovered by Meridian Minerals in the summer of 1985. At the Blue Hill Creek target, over 12,000 feet of drilling were conducted on the property to partially test the Tertiary-hosted target between 1986 and 1998. Drill results confirm the presence of significant thicknesses of bulk-tonnage, epithermal hot-spring-type gold mineralization in the target area, as well as the potential for additional mineralization along the open-ended, lateral, and at depth extensions of the deposit.
At the Cold Creek target, a total of 9,205 feet were drilled between 1986 and 1988 to partially test the Tertiary-hosted target. Results confirm the presence of significant thicknesses of mineralization in the known resource area, as well as the potential for additional mineralization along the open-ended, lateral extensions of the deposit.
Geology and Mineralization
At Blue Hill Creek, alteration and gold mineralization are mainly hosted by capping sinters and Tertiary Salt Lake Formation epiclastic sedimentary and tuffaceous volcanic rocks. Gold-bearing chalcedonic sinters and strongly silicified tuffaceous sedimentary rocks with disseminated pyrite and quartz veining compose the main target in the altered zone. This zone, currently 3,350-feet long and up to 1,000-feet wide, with mineralization open in all directions as well as at depth, contains surface gold values to 0.060 opt. Mineralization appears related to north- and northeast-trending, high-angle structures. Local, post-mineral northeast-trending faulting has displaced and buried mineralized sections to the northwest, some of which have yet to be drill tested.
At Cold Creek, alteration and gold mineralization are hosted by Tertiary Salt Lake Formation epiclastic sedimentary and tuffaceous volcanic rocks within a northwest-trending, fault-bounded graben. Pervasive silicification and local strong chalcedonic quartz veining are the primary alteration types present at the main target in the altered zone. This zone, at least 5,000-feet long and up to 3,500-feet wide, contains surface gold values to 0.060 opt. Mineralization appears related to north- and northeast-trending, high-angle structures. The margins of the graben remain unexplored.
In the Summer and Fall of 2008, Otis completed a comprehensive program of geologic mapping and sampling at the Blue Hill Creek and Cold Creek projects and completed a CSAMT survey on both main project blocks. Results from the survey indicate the presence of a sizeable and geologically significant 1.5 kilometer-long, low-resistivity anomaly underlying and extending downdip from the Blue Hill Creek gold deposit. Based on the results of the survey, the Company staked additional Federal lode mining claims and applied for additional Idaho State leases to expand the Company's land position beyond the original core claims.
Concurrently, smaller CSAMT anomalies were also identified underlying and extending beyond the Cold Creek target area. Results show a shallow gold-bearing Tertiary volcaniclastic package overlying a distinct graben structure with unexplored low-resistivity anomalous zones and interspersed higher resistivity areas interpreted to be argillic alteration and silicification associated with possible feeder structures.
Otis geologists interpret this anomaly as a large, sheet-like-shaped, gold target that will be tested by a series of five-to-six angle holes, up to 1,000-feet deep in 2009. The company is planning to conduct further work on the project in 2010 and beyond.