St. Andrew adds more land to Stock Twp. holdings

In a bid to increase its share of gold reserves at the Stock Twp. property near Timmins, Ont., St. Andrew Goldfields is buying an additional block of claims to the north and east of the property from Esso Minerals.

St. Andrew says it has reached an agreement in principle to acquire a 100% interest in the 12-claim block for $950,000 cash.

Included in the acquisition is the high grade N2 zone discovered in 1986 and the new East zone located about 1,500 ft east of existing underground workings.

With 750,000 tons grading 0.23 oz gold per ton in place, the N2 zone is critical to St. Andrew’s spring 1989 production plans. They are based on proven reserves of one million tons averaging 0.183 oz and initial production rate of around 30,000 oz annually.

“The deal is important to us because it gives us clear title to all the ore in that area,” said St. Andrew spokesman Garfield Heyes. “The transaction will simplify accounting and ore treatment procedures and facilitate the senior financing to production for this project,” he said.

The agreement also increases St. Andrew’s interest to 75% in the Shoot and Porphyry zones located several miles further east in Taylor Twp. The Toronto company has a drill on the Shoot zone where reserves stand at 1.3 million tons grading 0.126 oz, while the Porphyry is the subject of an underground exploration program.

According to Heyes, the company also has two drills on the East zone which could be accessed via the Stock Twp. production shaft.

To probe beneath the 1,500-ft level to 2,000 ft on the East zone, St. Andrew is drilling a series of five deep holes at 300-ft centres. “We are looking for a downward continuation of the East zone which has been delineated along a strike length of 1,650 ft,” said Heyes.

As part of the agreement, St. Andrew picks up the surface rights to an area at Stock Twp. where the Toronto company is planning to install a tailings dam and 500-tpd mill. If and when ore from the other zones is brought on stream, the mill can be expanded to 1,000 tpd, Heyes says.

Under the agreement, Esso Minerals retains the right to re-acquire its 25% participation in the East zone for up to 12 months upon payment of 110% of St. Andrew’s expenses. But Esso isn’t expected to exercise that option.