Reappraisal of Moss Lake indicates open pit potential

Hemlo Gold (TSE) is providing a further $2 million to close associate Central Crude (TSE), for a greatly expanded program at Crude’s Moss Lake project in the Shebandowan area, 70 miles west of Thunder Bay, Ont. Crude recently completed a $650,000 drill program there on ground, it holds under option from Tandem Resources (ME) and Storimin Exploration (ASE). The program, coupled with extensive reassaying and re-examination of previous drilling, “has us excited,” President Richard Nemis said at Central Crude’s annual meeting.

There are two ways to go, Nemis said. “With two million tons now indicated in five zones grading 0.17 oz. gold, we think we could quickly develop an underground ramp mine.” But more important is the possibility of developing a very large tonnage low-grade open pit gold-silver-copper operation in a new, more wide open sericite environment east of the present underground workings.

Under the terms of the Storimin- Tandem deal, Crude can earn a 51% interest in the main 42-claim block by spending $4 million over five years and paying the vendor companies a total of $450,000 over that period.

Prior to the meeting, it reached an agreement in principle with Inco (TSE) on the company’s 32-claim group adjoining on the north. For a 50% interest, this calls for staggered cash payments to Inco of $140,000 and expenditures of $1.4 million over five years.

Another option agreement has just been made with Broad Horizon Inc., a private U.S. company covering two additional claim groups, both east and west contiguous to the Inco ground. It calls for cash payments of $200,000 and expenditures of $1.5 million. Limited work by previous operators on this ground reported intersections of 375.3 ft. of 0.15% copper and 134.5 ft. of 0.29% copper.

This big spread Crude has now tied up, nestled between Inco’s 2,000-ton nickel-copper-platinum producer to the east and Noranda’s former producing Coldstream copper mine to the west, certainly suggests the mine-making potential of this particular area.

Noranda Exploration, a unit of Noranda (TSE) and operator for the Hemlo-Crude team, is presently building large permanent camps and will resume drilling almost immediately. “We expect to be working in this area for a long time,” Nemis told The Northern Miner.

The gold-bearing sulphide mineralization probed to date lies within a highly altered diorite stockwork. This mineralization also contains low values in both copper and silver which are currently being reassessed. The higher-grade gold intersections are within a low-grade gold halo extending over much greater widths along a 5,000-ft. strike length.

Drawing a lot of attention now is the reassaying of previous fire assays by the total metallic method. It is showing a significant increase in the gold content, as well as copper and silver values.

The most easterly hole to date, No. 90-19l, went down some 2,000 ft. from the Inco boundary, and returned a 416.7-ft. section running 0.033 oz. gold by fire assay, including 32.8 ft. of 0.12 oz. by fire assay and 0.167 oz. by metallic methods. Greatest width so far encountered is in hole 88-15l which shows a 998-ft. intersection grading 0.026 oz. gold with the metallic reassay results yet to come.

An open pit, with the 500-l,000 ft. widths now visualized, could probably operate on a 0.03 oz. grade which would compare favorably with some of the big low-grade open pit operations being planned in northern British Columbia, says Nemis. And he feels he has a good chance of coming up with just such a development, which would be a first for Ontario. A lot of the infrastructure is already in place.