Rayrock Yellowknife Resources (TSE) has turned to a geophysical exploration program on the Dee property in search of further drill targets after deep drilling below the existing open pit gold mine failed to reach the geological target.
Rayrock, the operator for the 4-member syndicate that owns the property, drilled two holes below the pit but stopped when the drilling became too difficult penetrating a cavernous limestone horizon at a depth of about 1,000 ft. The plan had been to go deeper.
Rayrock holds a 29.3% interest and is operator of the mine located at the north end of the Carlin trend in Nevada.
The company also drilled four holes seeking a downward extension of the pit and although some gold values were intersected, they were not sufficient to warrant further drilling.
David Hutton, vice-president exploration and development for Rayrock, says the price increase in the company’s stock might be due to speculation about drill results from Midland Energy, (VSE) a company in which Rayrock holds a 55% interest, in Chile. Six holes have been completed there on a copper deposit in hopes of confirming 3.5 million tonnes of reserves grading better than 4% copper. If such a reserve can be confidently outlined, it could warrant a 1,000-tonne-per-day operation. Given a copper price of 75 cents (US), Hutton says that could generate an operating profit of $10 million per year and permit the payback of capital costs required to put the property into production within 18 months.
Earlier this year the company reported that underground work was progressing in order to confirm reserves.
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