St Joe says it’s a go on the Golden Patricia

Just 14 months after pulling the first discovery hole on the Golden Patricia property near Pickle Lake, Ont., St. Joe Canada has said yes to production go-ahead.

Though costs are now being fine tuned, it is expected the mine will be churning out a healthy 40,000 oz of gold annually, says John Stephenson, vice-president of this wholly-owned subsidiary of Toronto-listed St. Joe Gold, which in turn is 90% held by Fluor Corp. of Irving, Calif.

A preliminary mining plan has been prepared which sees the deposit coming into production at an initial rate of 150 tons per day in the second half of 1988. Underground exploration and development will continue throughout most of this year.

It’s estimated that it will cost approximately $5 million(US) to continue underground development and to obtain the necessary operating permits. An additional $10.2 million is expected to be spent on the completion of underground development, mill construction and on the supporting infrastructure in order to put the mine into complete production. No stranger to area

The Golden Patricia deposit is located about 70 km west of Pickle Lake and 35 km north of Lake St. Joseph. The company has been working in the area for several years and had pulled 28 barren holes before clicking in December, 1985, with discovery hole MN-85-29 which cut 5.9 ft grading 0.29 oz gold per ton.

Some 104 drill hole intersections later a decision was made to head underground in the spring of 1986 as part of a feasibility study.

The deposit itself is now believed to be a narrow steep dipping chert horizon and not a quartz vein as originally thought. The chert unit has now been tested over a total distance of almost two miles and it appears likely that it continues at depth and to the east and west. The chert averages about 2 ft in width and contains about 85% of the gold.

A 1,000-ft ramp, collared in close proximity of the discovery hole, was driven at a 15 degrees incline to a depth of 120 ft below surface. Bulk samples were extracted for metallurgical tests and mining conditions were assessed in order to complete the data base for the feasibility study. Testing of the first 10-ton sample suggests that gold recovery may exceed 90%. Ramp number two

There is a second ramp going down about 3,000 ft to the west of ramp one. Prior to freeze-up the ramp had reached the chert horizon at a vertical depth of 50 ft. At break-up, work will continue on the ramp in order to expose the horizon in both directions. The plan is to drive the second ramp eastwards and connect it with the first to expose the chert unit where, as yet, it is only poorly explored by surface drilling, says Dr Stephenson.

Mining would be via the ramps, but the possibility of a shaft is “always in the back of our mind” as mining matures, says Dr Stephenson. Right now the ramps measure 3m x 3m and will have to be slashed out to 4m x 4m to accommodate production. High grade deposit

The Golden Patricia property consists of 192 claims and is estimated to contain in excess of 500,000 oz of gold. The initial mining project lies in the centre of the Golden Patricia property and covers only seven of these claims. One of the major charms of the deposit is its high grade. Grading 0.88 oz, the drill-indicated reserves on this portion of the property amount to 283,000 tons.

The company has a large land position in this area with a total of 1,980 claims held west of Pickle Lake, or just under 80,000 acres. The main block of 1,540 claims stretches some 36 miles from Meen Lake southeastward to east of Dempster Lake.

Off-site exploration is focusing along strike of the Golden Patricia discovery both to the east and west following up a number of geophysical targets, two of which are the Esker to the east and the Dobie zone to the west. As Dr Stephenson says “we’re getting considerable encouragement along the belt.”

Meanwhile, a minesite permanent camp and a 5,000-ft airstrip are going up at the Golden Patricia site.

Financially, the company is in fine shape, so funding for the project doesn’t seem to be a problem. Net income posted by St. Joe Gold was $7.9 million on revenues of $107.3 million. Working capital at year end stood at $47 million.

St. Joe Gold is no stranger to the producer ranks. Last year, the company produced some 293,000 oz of gold, mainly from its El Indio mine in Chile.

St. Joe Gold is also in the process of completing a feasibility study on its Richmond Hill gold and silver deposit in the Carbonate district in western South Dakota. About 125 holes have been drilled so far outlining a deposit estimated to contain about 3.9 million tons grading 0.055 oz of gold and 0.23 oz silver per ton.

St. Joe Gold trades on the tse at the $17 level with a 52-week high and low of $18 and $13, respectively.