Skyline pulls out of Snip extension

International Skyline Gold (SK-V) has backed away from its attempts to establish a link between the Snip mine of Homestake Mining (HM-N) and its own High claims. The properties are in northern British Columbia.

Skyline has conducted 197.7 metres of drifting and 1,495 metres (17 holes) of underground drilling, extending from the nearby Snip mine workings on to its High 1, 2 and 3 claim group. The High claims are adjacent to the Snip mine.

Skyline believed that the High claims represented an extension of the Snip deposit’s strike length on to its property. Skyline and Homestake agreed to share the net operating profit from any ore mined from Skyline’s ground on the basis of 55% Skyline and 45% Homestake.

Skyline’s partner, Denver-based Royal Gold (RGLD-Q), was financing the underground exploration in return for a portion of Skyline’s net operating profit.

Exploration focused on intersecting a previous drill intercept, which cut 15.77 grams gold per tonne across a 2-metre interval. The target intercept was located 195 metres from the eastern end of the Snip mine and 75 metres inside the Skyline claim boundary.

Assays from the exploration drilling did not warrant further work.

The highest drill intercepts on prospective veins averaged 8.6 grams gold per tonne over 1.5 metres and 9 grams gold over 0.5 metre. Other anomalous intercepts averaged 1.25 grams over 0.3 metre and 2.5 grams across 2 metres. The remainder of the drill holes assayed less than 1 gram gold per tonne.

Skyline states that of the 32 samples taken from exposures of the two veins in the exploration drift, only two contained more than 1 gram gold.

In related news, Skyline has announced its intention to take over privately owned Copper Mountain Mines. Copper Mountain holds an 80% interest in the Magushan copper-molybdenum mine and an 80% interest in the Xuanzhou iron-sulphur mine, as well as 190.8 sq. km of exploration licences surrounding the Xuanzhou mine. The Chinese government holds the remaining 20% interest in these operations, both of which are in the southern Chinese province of Anhui.

Skyline reports that Copper Mountain was profitable during the first quarter of 1999, predominantly as a result of the performance of its Magushan mine. Throughput at the mine is being expanded to 350 from 150 tonnes per day, and copper grades average 4.7%.