Dolphin building road at Cape Ray gold property

Dolphin is building the road to reduce its helicopter access costs and to prepare for the eventual transport of heavy equipment into the property.

To date, about $10 million has been spent by Dolphin on the project, with a production decision expected later this year. Dolphin is 44%-owned by Corona Corp. (TSE) of Toronto.

“Although we’d like to see the grade higher and the ground conditions better at Cape Ray, there’s still potential to increase reserves,” says John Thompson, Dolphin’s vice-president of exploration.

Reserves are estimated at 1.14 million tons grading 0.28 oz gold per ton in three zones. These reserves are calculated using a 5-ft minimum mining width and a cutoff grade of 0.15 oz gold. The deposit is accessible by an underground decline.

Gold at Cape Ray doesn’t occur in a “simple quartz vein sheet” says Thompson, “but is associated with a broken up series of quartz veins in a major shear zone.”

While visible gold is not present, there is a considerable amount of galena, chalcopyrite and some sphalerite in the quartz veins.

“We’ve found a very good correlation between gold and galena at Cape Ray,” he says. Dolphin plans an underground test stope and raise on the 41 zone to check continuity and determine ground conditions. “Anything can be overcome, but it’s a question knowing how much it costs to solve problems and provide pre-mining support,” Thompson says. He estimates a per-ton operating cost of about $115 at Cape Ray.

“We would like to get a small operation going first, then grow with our cash flow.”

The company is seeking funding from the provincial and federal governments, which would go toward road construction and power sources.

“There is a good chance of federal funding being available,” Thompson says, noting that the project is in an area of high unemployment.

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