Vancouver — Prospective precious metals miner Tagish Lake Gold (TLG-V) says its 2006 drill campaign at the Skukum Creek gold-silver property, located 80 km southwest of Whitehorse, in the Yukon, will likely boost the project’s resource and has turned up a new mineralized zone.
The 6,500-metre drill program mostly focused on outlining the Rainbow Two zone plus testing of Kuhn zone and newly discovered Bergvinson zone.
Results included a number of high-grade mineralized sections, with hole SC06-95 cutting 9.7 metres (from 34.9 metres down-hole depth) averaging 6.9 grams gold per tonne and 72.4 grams silver in the Rainbow Two zone including a 1.4-metre interval of 20.8 grams gold and 176 grams silver.
Tagish is compiling data from the drill program into a revised resource estimate for the project.
A preliminary feasibility study at Skukum Creek previously reviewed measured and indicated resources of 800,000 tonnes grading 6.8 grams gold and 248 grams silver using a 5-gram gold cutoff grade. An additional 90,000 inferred tonnes at 6.5 grams gold and 225 grams silver were also tabled.
As part of its current feasibility study, Tagish is evaluating dropping the 5-gram gold cutoff to 4 grams, thus boosting its resource tonnage. Based on these revised parameters and at current precious metals prices, cash flow estimates show after-tax returns of more than 40%.
Feasibility work has also included metallurgical testing on material from the Rainbow zone. Results indicate 95% of the gold and 88% of the silver is recovered in a flotation concentrate. Leaching of the concentrates extracted up to 90% of the gold and 87% of the silver. An overall silver recovery of 77% was markedly higher than in previous tests and will likely boost project economics.
The company also recently secured a mining contractor for underground development at Skukum Creek. The first phase will include about 300 metres of drifting and 200 metres of raise construction on the Rainbow Two and Bergvinson zones at the 1,300-metre level. The workings will provide a check on grade and mineralization continuity. Additionally, about 200 metres of crosscut development will be conducted to provide underground drill stations.
Second-phase development will see a new 1,100-metre adit driven to access deeper extensions of known mineralization below the existing adit.
Tagish foresees an initial Skukum Creek production scenario of 60,000 oz. gold equivalent over at least five years with estimated cash costs of below US$220 per oz.
Tagish’s claim block includes two other deposits. The Mt. Skukum deposit hosts an inferred resource of 109,000 tonnes at 13.4 grams gold and saw production from 1986-1988 of about 78,000 oz. gold. The Goddell Gully deposit has an indicated resource of about 320,000 tonnes at 11 grams gold plus a further 280,000 inferred tonnes averaging 9.2 grams gold. The project also has an on-site, 300-tonne-per-day mill from previous operations.
Given its 88.7 million shares outstanding, the company posts a $20-million market capitalization at its recent trading level around 23 per share. The stock has a 52-week price range of 7-32.5.
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