Surf Inlet to explore old Surf mine workings

Vancouver-based Surf Inlet Mines recently completed a private placement with Beltech Corp. of Australia to raise $1 million to finance the first phase of a major underground program at the Surf Inlet property 100 miles southeast of Prince Rupert.

Located on Princess Royal Island on the coast of B.C., the property covers two former gold producers — the Surf and Pugsley mines — which were inactive until 1981 when Cominco Ltd. and Placer Developments completed an unsuccessful surface drill program.

It was designed to test the large tonnage of low grade gold potential for possible open pit mining.

Under the terms of the agreement with Beltech, Surf Inlet made a private placement of 500,000 units to the Australian company at $2 per share to raise $1 million. In exchange for an additional $2 1/2 million units, Beltech will release another $5 million as required.

After spending $1.4 million before January, 1991, Surf Inlet can earn a 70% interest in a 3,200-ha claim group owned by Matachewan Consolidated Mines of Toronto.

Following stage two of the agreement, Matachewan’s 30% working interest will be converted to a 15% carried interest after Surf Inlet has spent an additional $1 million.

“This is an extremely attractive property,” said Matachewan exploration manager Walter Thorpe. He says it produced 382,351 oz gold and 200,752 oz silver and 6,314,341 lb copper between 1917 and 1942. Since then, intermittent production and labor shortages have limited development at the property.

A review of gold-bearing dump material which, a Surf Inlet report says could be processed in a flotation mill, stands at 400,000 tons averaging 0.087 oz gold per ton. In addition to that, reserves above the 1,300 level at the Pugsley mine are estimated at 57,000 tons of average 0.35 oz to 0.4 oz.

However, Thorpe said the old reports don’t indicate whether there is any ore below the present development which measures 1,100 ft at Surf Inlet and 1,300 at Pugsley.

Future work, he says, will involve reopening the Surf mine, dewatering and deepening the shaft past the 1,400 level. An access road costing around $100,000 must be constructed to transport equipment from the Surf Inlet tidewater to the mine site, according to John Michell, Surf Inlet Mines’ general manager of mines.

“After that, underground cross cutting and counter driving will put us in a position for a $2 1/2-million diamond drilling program to firm up reserves,” he said.