Projects

Victoria Gold Fields, Australia

Property Status

Effective June 27, 2008 and amended February 2, 2011, the Company signed a letter of agreement for a farm-in and joint venture with Northgate Australian Ventures ("Northgate Ventures") for three mining tenements in the Stawell Corridor of the Victoria Goldfields. The Group can earn a 50% interest in one or all of the three properties by funding an additional A$500,000 per property by June 30, 2012 with a minimum expenditure of A$450,000 in aggregate per year.

Upon the Company earning a 50% interest in one or more properties, Northgate Ventures will have the option to earn a 60% interest in the property by funding an additional A$1.5 million in exploration expenditures within 3 years, to form a 50:50 joint venture with the Group or elect not to contribute and allow the Group to earn a 100% interest in the property by funding an additional A$2 million in exploration expenditures over 4 years.

The Company is exploring three licences, Murtoa, Ararat South and Dundonnell, totaling 120 km of the corridor length, representing all ground outside of a 50 km buffer around the Stawell Gold Mine. In addition to greenfields opportunities, more advanced targets exist including the 10 kilometre-long Murtoa target, which surrounds the Kewell gold resource.

On April 15, 2010, and amended July 26, 2010 and September 15, 2010, the Company assigned the option agreement to Brixton Metals Corporation ("Brixton"). The Company remained the operator of the exploration program and incurred all costs on behalf of Brixton in return for a fee equivalent to 10% of all expenditures. On November 15, 2010 Brixton informed the Company that they are no longer pursuing the option on the Victoria Goldfields properties have reassigned the option back to the Company.

Under the Brixton agreement, a regional gravity survey over portions of the Ararat South and Dundonnell properties was completed to fill in areas of low data density and follow-up on more detailed gravity and IP surveys undertaken by the company in early 2009. The gravity survey highlighted new areas of potential. On the Murtoa License, a mineralogical study was completed using samples from historical drill holes focused on the Kewell gold prospect. The studies revealed that certain mineral species and degree of iron enrichment can be used to detect more confined areas of gold mineralization. This technique will be applied in subsequent drilling programs.

Opportunity

Northgate acquired its position in the Victoria Goldfields with its takeover of Perseverance Corporation Ltd. in early 2008. With this takeover, Northgate acquired two operating mines at Fosterville and Stawell. With Northgate's exploration teams focused in and around its two operating mines, they turned to Kiska to help advance the 870 sq. km land package in the Stawell Corridor. Kiska will systematically evaluate the entire package in order to narrow down targets for further and more detailed exploration.

The strong relationship Kiska and Northgate have built through the exploration of the RDN property in British Columbia and exploration alliances conducted in Yukon Territory is the basis for this agreement. This relationship has enabled Kiska to access Northgate's dominant land position in a major gold belt on very reasonable terms - something that most junior companies would not have access to.

Property Overview

• The opportunity to explore a highly productive gold belt in a politically stable jurisdiction. Land position encompasses much of the Stawell Corridor.
• Victoria Goldfields have been a prolific gold producer for the State of Victoria, Australia, accounting for approximately 75% of the total gold production in the state.
• Excellent greenfield exploration opportunities. The exploration model for the corridor has been extensively studied, providing exploration criteria at both the regional and detailed scales. Kiska will have access to Northgate's Stawell Gold Mine (SGM), which anchors Northgate's position in the 240 kilometre-long belt. This access will help build a better understanding of the geological model and improve Kiska's exploration effectiveness.
• High quality targets with convincing similarities to SGM exist in the land package being made available to Kiska. Previous work programs were well designed, identifying numerous targets that have yet to be brought to the drill-ready stage, however, insufficient resources were available to the predecessor company to conduct systematic greenfields exploration of the entire land package.
• The deal is structured similarly to other Kiska/Northgate arrangements in which Kiska undertakes to advance exploration to the point where drill targets are defined, at which time Northgate can take over funding of exploration, earning a larger percentage in the property for doing so.

Maps

Click to enlarge

Highlights

Past work on the Stawell Corridor ELs has identified some large-scale targets, however funding for Northgate's predecessors exploration in the district was limited and a systematic evaluation was not completed on the entire land package. A strong model to guide exploration in the district does exist. Some key characteristics that make for favourable targeting criteria include the use of geophysics (gravity and magnetics surveys) to define basalt centres and granites that are associated with mineralization in the corridor. Another key is the presence of gold at surface in geochemical surveys or alluvial (placer) deposits or gold found in the subsurface via RAB drilling.

Some excellent targets that resemble the Stawell Gold Mine do exist:

Murtoa: Buried target identified by geophysical techniques. Covered by 100 metres of overburden, largely untested except for an area of 25 drillholes that has highlighted a historic resource reported to be 100,000 ounces at 6 g/t gold. This resource (covering an area roughly 800 by 550 metres, has not been included in the agreement, but Kiska has access to all of the ground surrounding the resource).

Westmere Dome Target: 12 km by 2 km gravity feature, with basalt centre indicated by drilling. Anomalous gold in drilling, with only 17 holes over the entire 12 km of the target.

Dundonnell: 5 km long by 2 km wide gravity target. Basalt indicated by drilling, anomalous gold in drillholes. Very little drilling over length of target.

Geology

The Stawell corridor is a 240 km long belt of highly deformed and metamorphosed volcanic-sedimentary stratigraphy cored by the Stawell Gold Mine (Northgate Minerals - 5 million oz) that produces approximately 100,000/annum at a grade of 8 g/t. The corridor is situated in a Paleozoic fold and thrust belt, bounded on the west by the major terrane-bounding Moyston Fault and on the east by the Coongee Break. Rocks to the east of the break are composed of simply folded turbidites (hosting the Bendigo-Ballarat gold belt) while those in the Stawell corridor include intensely deformed steeply dipping schists. The deposit area stratigraphy ideally consists of accumulations of basaltic rock, or so called basaltic domes, draped in ferruginous (iron-rich) volcanogenic sediments overlain by pelitic schists (shales). This stratigraphic arrangement is considered to represent a failed VMS type setting developed at these isolated basalt centres. Subsequent deformation has structurally prepared the belt and lead to the formation of crustal scale structures. Orogenic mineralization at the Stawell mine is dated at 440 Ma and consists of gold bearing quartz vein systems that occur largely within the volcanogenic sediments that wrap around the western flank of the large, doubly plunging Magdala basalt antiform. Gold accumulation is thought to be developed where these dilational zones and fluids interact with the ferruginous sediments.

Current Exploration Program

During the first quarter of 2011, the Company completed ground-based geophysics (induced polarization, audio magnetotelluric, and gravity surveys) and geochemical sampling programs on these properties. Data from these surveys is still being analyzed, but management is considering aircore and reverse circulation drilling to test priority targets for gold mineralization in 2012.