Barkerville taps into Bonanza Ledge gold in BC

Barkerville Gold Mines (BGM-V) has cleared another hurdle in its quest for a modern take on the gold rush that filled the hills around Barkerville 150 years ago.

The company is newly permitted to develop an open-pit gold mine at its Bonanza Ledge property, 2 km northwest of the Barkerville historic townsite, located a three-hour drive southeast of Prince George in central B.C.

The permit means Barkerville is well on its way towards bulking up production at its QR mine and mill 110 km southwest of Bonanza Ledge. Ore mined by an open pit could come by February.

Barkerville says Bonanza Ledge can supply 73,000 tonnes of ore per year for a current mine life of four years, with an average grade of 9.05 grams gold per tonne.

The company already has the roads in place to truck that ore to the mill. And the ore won’t be arriving at an idle facility, because the QR mine went into production last September. The mill has a 900- tonne-per-day capacity and cost $10.2 million to refurbish. It was originally built in 1994 by Kinross Gold (K-T, KGC-N). Now Barkerville runs an underground operation at the site that is processing 600 tonnes of ore per day, at an average head grade of 4.69 grams gold.

The company first discovered a new style of mineralization at the historic Bonanza Ledge area in 2000. The mineralization it found came in two forms: gold in quartz with the gold occurring in pyrite, and replacement-style mineralization where gold was carried in fluid and replaced the initial quartzite.

While mineralization is similar to previous findings in the belt, it occurs within a different stratigraphic setting because it is comprised of gold-bearing massive banded and stringer pyrite in the footwall of the B.C. fault system.

In the eight years following the discovery, the company drilled 33,158 metres on the zone and completed a positive prefeasibility study in September 2009.

But QR and Bonanza Ledge are only part of the Barkerville story. With the Goldstream mill facility’s purchase at the end of 2010 for $3.3 million, Barkerville plans to move the mill to the base of Cow Mountain and upgrade to a 3,000- tonne-per-day capacity that handles ore from Bonanza Ledge and its Cariboo project.

Cariboo sits on Cow Mountain, west of Barkerville Mountain and the Bonanza Ledge deposit.

On Dec. 12 Barkerville released results from the area that returned intercepts of 62 metres grading of 14.2 grams gold per tonne, including 35 metres grading 25.2 grams.

Barkerville cautioned, however, that the intercept is likely sub-parallel to the drill hole and not likely a true width. It says true widths will be determined once more assays results from other drill holes at the same set-ups come in.

Six drill rigs are turning on Cow Mountain as part of a 151-hole program, which will feed into an updated resource estimate.

The mountain hosts a 6-milliontonne resource at 2.23 grams gold for 430,855 oz. gold, mainly in the historic Cariboo gold-quartz mine zone. Along with Barkerville Mountain and Island Mountain, which is the next mountain west of Cow Mountain, the three mountains form a prospective, 6-km run along the larger 60-km Cariboo gold belt.

The area has three zones with compliant resources: Bonanza Ledge, BC Vein and Cariboo gold-quartz. When combined with the QR mine’s resources, the company’s proven and probable reserves ring in at 491,000 tonnes grading 7.39 grams gold for 116,640 oz., while measured and indicated resources come in at 7.02 million tonnes grading 2.63 grams gold for 635,274 oz. Inferred resources stand at 2.1 million tonnes grading 2.72 grams gold and 185,136 oz.

As of Aug. 31 the company had $2.4 million in cash and equivalents, and 77 million shares issued and outstanding. Its share price touched a 52-week low when it traded for 84¢ on Dec. 14. Shares traded at a $2.20 high at the beginning of June.