Galactic, Cornucopia agree to deep drill Ivanhoe bet

Vancouver-based Galactic Resources and Cornucopia Resources have opted to go ahead with a major deep drilling program at their 100,000-acre Ivanhoe property in Nevada’s Carlin gold trend.

The joint venture partners are hoping for a repeat of American Barrick Resources’ recent success in finding the deep Post and Betze deposits at Barrick’s Goldstrike mine.

Earlier this year, Barrick caused a sensation when it released the results of a hole drilled 2,000 ft below its Post claims where reserves already stand at 20 million tons of 0.053 oz gold per ton. Containing 620 ft of 0.3 oz, the discovery sent Barrick’s share price rocketing from $3.13 to $39.29.

As Barrick Chairman Peter Munk has pointed out, intersections like this are rarely found, even on a worldwide basis, but executives at Galactic and Cornucopia are still hopeful.

In a bid to emulate the Goldstrike discovery which could boost Barrick’s production there to one million oz, they have assembled a team of special consultants including geologist Dr Ralph J. Roberts who was instrumental in identifying Barrick’s latest find.

Galactic and Cornucopia also have promised to use techniques similar to those used in the Post and Betze discoveries which lie southeast of Ivanhoe. High Grade

According to Galactic Chairman Bob Friedland, a drill hole located 800 ft south of the southeastern Rowena/Asby portion of the Hollister deposit (which hosts an estimated 1 million oz of open pitable reserves) indicated that another high grade deposit could be found.

It encountered paleozoic sediments at a depth of 1,150 ft with quartz calcite veining and extensive pyrite mineralization. The target depth of this initial hole is 2,000 to 3,000 ft. According to Friedland, local consultants say the prominent magnetic high southeast of the Rowena/Asby zone could represent a structural high similar to one bordered by American Barrick and Newmont Gold’s Gold Strike and Bootstrap deposits.

Friedland says deep drilling will begin on structural loci near magnetic highs as well as in the existing ore zone. Existing aeromagnetic data combined with the geophysics is now sufficient to site several deep drill targets in the coming week, he says.

The decision to begin deep drilling follows a recent agreement in which Cornucopia granted Galactic an option to explore and develop the Ivanhoe property and earn a 50% interest in Cornucopia’s share of the property. Land Position

Representing one of the biggest land positions in the famed Carlin gold belt, it was bought by Cornucopia from usx Corp. in February.

In return for issuing to Cornucopia 750,000 of its common shares, Galactic has earned the right to all data and drill results before conducting a feasibility study on the property.

Galactic must also provide up to 100% of the financing needed to mine the Hollister deposit and any additional deposits found on the property. But Cornucopia has to option to provide up to 50% of those costs prior to any financing agreement by Galactic.

The agreement also stipulates that all debts and any money spent on additional exploration work must be repaid before proceeds can be distributed between the joint venture partners.

After Galactic meets its joint venture agreement obligations, it will operate the project.

Meanwhile Friedland says Cornucopia will continue to spend $3 million on drilling and initial exploration. At presstime, four reverse circulation drill rigs and one diamond drill core rig were operating on the property. To accelerate the program, Friedland says another core rig will be moved in Nov 16. Surface Targets

While the Hollister deposit remains open in several directions and at depth, 12 other near-surface targets have been identified on the 100,000-acre property.