Drilling begins at Vogel property

Toronto-based Kinross Gold (K-T) has started its $1-million drill program at the Vogel property of Black Hawk Mining (BHK-T), just east of Timmins, Ont.

And buying into the program is Thunderwood Resources (THS-T), which has advised Kinross it will exercise an option to participate in the Kinross-Black Hawk joint venture.

Kinross’s agreement with Black Hawk allows it to earn a 50% interest in the Vogel property by providing the first $12 million of development funding (T.N.M., Nov. 11/96). Kinross operates the nearby Hoyle Pond mine and mill.

Under a joint-venture agreement covering Thunderwood’s adjacent Owl Creek West property, Thunderwood can buy 35% of any interest that Kinross acquires in the immediate area by paying its proportionate share of the acquisition costs and exploration commitments.

The 15,000-metre drill program, the first phase of Kinross’s spending commitment, will test extensions of known gold zones. Black Hawk’s current inferred resource on Vogel is 700,000 tonnes grading 11.28 grams gold per tonne. The resource figure, based on a 66-hole drill pattern, includes material above a depth of 200 metres in the V1 and V2 zones.

Three other mineralized zones have been found, but resources in these zones, and at depths below 200 metres on V1 and V2, have not been calculated.

Kinross has also bought out a 2% net smelter return royalty held by Inco (N-T). The royalty was held by Inco’s exploration subsidiary Canico and applied to properties that Kinross absorbed in an earlier acquisition, including much of the Hoyle Pond mine property.

The deal, valued at $9.9 million, releases the royalty interest in exchange for 1 million shares in Kinross and 200,000 warrants to buy one Kinross share at $12.