United Lincolm, BP fast-track plans for B.C. gold-copper play

A bulk tonnage low grade gold- copper deposit in British Columbia is being fast-tracked toward development by partners United Lincoln Resources (VSE) and BP Canada Resources (TSE). Located 45 km west of Mackenzie in northcentral B.C., the Mt. Milligan property is owned 70% by United and 30% by BP.

The partners have approved a $1.2-million exploration program designed to extend and delineate reserves on the MBX deposit, which was discovered by the partners earlier this year. This work includes a 20,000-ft drill program which is in progress.

Based on a reconnaissance drill program of 31 holes completed earlier this year, the drilling has defined a geological inventory of 20 million tons grading 0.02-0.03 oz gold per ton and 0.3%-0.5% copper per ton. A classic porphyry copper deposit with open pit potential, Mt. Milligan is distinguished from most in the British Columbia interior by its above average gold grades, Robert Dickinson, president of United Lincoln explained to The Northern Miner.

More importantly, an examination of cross-sections, geophysical plans and geological maps by The Northern Miner, shows that the objective of outlining a minimum 60-million ton deposit is feasible.

The current program’s objective is to build reserves to this level. This will be followed by bulk sampling, detailed metallurgical studies and engineering and environmental studies with the intent of completing a feasibility report, Dickinson said.

Some of the better sections from the drilling completed include 268 ft grading 0.069 oz gold and 0.09% copper. Another hole cut 251 ft grading 0.063 oz gold and 0.52% copper. All holes intersected mineralization beginning from surface bedrock, which is overlain by a thin bed of overburden. The relatively gentle topography of the area combined with the geometry of the MBX deposit should allow for a good open pit stripping ratio.

As with all large tonnage porphyry deposits in British Columbia the Mt. Milligan project will be sensitive to commodity prices and dollar exchange rates. However, a positive attribute of this project is the above average gold credit, which according to Dickinson, will result in two-thirds of revenues coming from gold sales. By comparison, mines such as Afton in the Highland Valley of British Columbia mine higher copper grades of 1% but lower gold grades averaging 0.014 oz.

Comparisons can be made with Battle Mountain Gold’s operations in Nevada, which process ore grading 0.79% copper and 0.025 oz gold. Also, the Montana Tunnels mine owned by Pegasus Gold, has similar large tonnage, low grade features.

United Lincoln is controlled 69% by Continental Gold Corp. (VSE), which is controlled by Dickinson and Robert Hunter. Both were associated with North American Metals, a company which was taken over earlier this year by U.S.-based Homestake Mining Co. (NYSE). Homestake is also the largest minority shareholder in Continental with a 12% interest.