Cyprus resumes drilling at Kerr mine

Drilling has resumed at Deak Resource’s (TSE) Kerr mine property in Virginiatown, east of Kirkland Lake, Ont.

Two underground drills are on site and a third, surface, drill will be added shortly.

Project operator Cyprus Canada, a subsidiary of Cyprus-Amax Minerals (NYSE), is exploring two gold-bearing structures known as the Mill and G zones. These structures, which parallel and lie south of the main Kerr orebodies, have been traced over a strike length of 6,000 ft. and to a depth of 5,000 ft. Previous drilling by Cyprus outlined significant mineralization in these zones.

In November, the joint venture agreement between Deak and Cyprus was revised to allow the latter to earn a 65% interest in the Mill and G zones combined, and a half interest in the South zone area, by spending $4 million on exploration before March 1, 1997. The agreement also covers the processing of any newly discovered orebodies at Deak’s Kerr mill.

In other news, Deak and its 77%-owned subsidiary GSR Mining plan to form an exploration company so as to complete a financing by year-end. The financing, through the new subsidiary, will be raised by debentures, preferred shares and common shares. Upon completion, up to $3.5 million will be available for exploration and development of the Kerr mine, and adjacent holdings in Virginiatown.

Deak is mining 800 tons per day at the Kerr mine and milling 650 tons per day. It is also custom-milling ore from the adjacent Cheminis mine of Northfield Minerals (ASE) and the Astoria mine near Rouyn-Noranda, Que.