Queenstake adds $100,000 to its operating cash flow

Queenstake Resources says it has received $625,000 from a limited partnership for the funding of Yukon placer operating costs in exchange for a share of production and “certain tax benefits.” President Gordon Gutrath confirms the transaction will add about $100,000 to Queenstake’s operating cash flow.

As of Aug 20, the company had also drawn down $870,000 of the $1.5-million flow-through share financing provided by Nim and Co. The balance of the funds will be received in the third and fourth quarters. In addition, Queenstake has received a $160,000 grant from the British Columbia government for its Moyie River placer and O’Connor River gypsum projects. The Yukon government will also provide $40,000 to explore Queenstake’s Mar gold prospect which will be drilled this year.

Meanwhile the company’s placer gold operations at Black Hills Creek and Maisy May Creek in the Yukon are “producing steadily at a production rate somewhat ahead of the 1984 and 1985 mining seasons,” Mr Gutrath confirms. The exploration program at Preido Hill was completed in August and the results are now being analysed, he adds.

Bulk sampling at Moyie River near Cranbrook, B.C., has been completed and the pay section is being processed at this moment. Excavation costs are below budget and the project could be another producer, assuming the grade meets minimum requirements. Three new gold properties are being evaluated in the Atlin area. Surface and underground sampling is being done which could lead to a bulk sampling program and production at a later date. Chichagof mine

The main level at the Chichagof mine in Alaska has been reopened and access secured to the Kay vein structure. Mine records indicate this vein contains sections of ore grade mineralization. The vein is being drilled and, depending on results, the mine could be dewatered further to explore the structure at depth.

Queenstake is involved in a joint venture with Bolero Resources in Nevada and drilling began at the Buckskin mine about a month ago. The old mine workings have been accessed and underground sampling is planned in the third quarter.

Drill cuttings have been submitted from the Argus project for metallurgical test work. The leaching characteristics of the material will be assessed and Queenstake notes that previous column leach tests gave excellent recoveries. “A closed spaced drilling program is now required to confirm the Devenport reserves as part of the feasibility study for a heap leach mining project,” Mr Gutrath says.

Eight holes were completed this year on the company’s O’Connor River gypsum project in northwestern B.C. The drill core is being analysed for its gypsum, anhydrite, salt, sulphates and insolubles. The gypsum zone is about 330 ft wide by 1,300 ft long and is 260 ft deep. Transportation and market studies are planned for the next quarter prior to final feasibility, he says.