Santa Fe reinterprets Springpole

Exploration at the Springpole project, 71 miles east of Red Lake, Ont., will return to the basics this summer as Santa Fe Pacific Gold (NYSE) attempts to reinterpret the property’s geology.

Santa Fe, which is operator in a 50-50 joint venture with Gold Canyon Resources (VSE), recently completed a $500,000 winter drilling program.

This work, according to Duncan Riesmeyer, Santa Fe’s project geologist, indicates that gold mineralization is not necessarily shear-hosted, as previously thought. Grassroots exploration, mainly in the North Porphyry zone, is required for the company to gain a better understanding of the geology.

Summer work, budgeted at about $250,000, will include remapping the surface area and relogging existing core in an effort to generate what Riesmeyer terms a “3-dimensional picture” of the geology.

Winter drilling in the North Porphyry area returned a 233.4-ft. intersection grading 0.021 oz. gold per ton in hole 153.

Previous work at Springpole was focused on the Portage zone to the south, where about 27 million tons grading 0.035 oz. gold were outlined.

Unfortunately this resource is situated under Springpole Lake, and Riesmeyer says the gold price would have to rise significantly for the zone to even begin to look economic. The potential for developing an underground mine based on high-grade shoots within the Portage zone has been discussed, but Riesmeyer is skeptical. The mineralized zone is structurally incompetent, he explains, and this renders underground mining difficult and probably uneconomic.

As a result, Santa Fe is concentrating on land-based targets. Subject to results from this summer’s program, the company expects to resume drilling in January, 1996.

Gold Canyon has 8.9 million shares outstanding and $80,000 in working capital. Chairman Michael Levinson expects that, in the near future, warrants will be exercised for 500,000 shares at 60 cents each. This would provide the company with ample funds for its share of the summer program.

Akiko Gold (VSE) holds the right to back in for 40% of Gold Canyon’s 50% interest.