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Iceland Mag

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Prospectors pledge a million dollars to gold exploration on the outskirts of Reykjavík

By Staff

  • Þormóðsdalur valley One of the sites prospectors believe might contain gold in recoverable quantities is Þormóðsdalur valley on the outskirts of Reykjavík. Photo/Vilhelm.

The Canadian mining company St-Georges Platinum and Base Metals Ltd recently acquired a majority stake in the Icelandic gold exploration company Iceland Resources. The Canadian firm has pledged one million dollars to gold exploration in Iceland in the next 24 months, with a focus on Þormóðsdalur valley in North Iceland.

Geothermal gold
Under certain circumstances gold can be found in geothermal areas where it is carried to the surface by geothermal water. The gold the collects in geothermal vents. While this process is well known, and gold has been found in geothermal areas in the past, it is not clear whether it is found in high enough concentration to justify its extraction.

Read more: Gold prospectors interested in Icelandic geothermal areas

The Icelandic exploration company has been searching for gold for several years, especially at Þormóðsdalur valley, a geothermal area by Hafravatn lake, on the outskirts of Reykjavík. In addition to Þormóðsdalur the company intends to explore sites on Reykjanes peninsula and in Vopnafjörður fjord in N.E. Iceland.

A potential high quality gold mine
The company plans to explore several historical drill holes in Þormóðsdalur and add new holes to gather enough data to be able to estimate the gold concentration at the site. Thormodsdalur is located S.E. of the lake Hafravatn, a small lake on the outskirts of Reykjavík, ca 20 km (12 miles). 

In 1908 it was discovered that small amounts of gold were found in old geothermal areas in the valley. Between 1911 and 1925 more than 300 meters (1000 ft) of mines were dug in the valley, producing significant quantities of material which was exported to Germany where it was studied. According to Iceland Resources these samples revealed gold concentration between 11g/t and 315g/t, which would qualify Þormóðsdalur as a very high quality mine.

Recent studies have confirmed that gold is found in Þormóðsdalur, although its concentration is unclear. Studies between 2005 and 2013, in which 32 holes were drilled, produced samples with gold values which varied from less than 0.5 g/t to a maximum of 415 g/t.

The World Gold Council defines a high-quality mine as having a gold ore density between 8 and 10 g/t, while low quality mines, which tend to be open pit mines, as having a density of 1 to 4 g/t. The highest-grade gold mine in the world is Tua tona in South Africa, which has a gold ore density of 28 g/t.

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