Adrian boosts reserves to 240,000 oz. `gold equivalent’

Revised reserve estimates for the Ski project north of Stewart, B.C., represent an approximate 70% increase in preliminary reserves and contained gold-equivalent ounces over those announced in September, 1990. Adrian Resources (VSE) owns the Ski project, with Prime Resources Group (VSE) and Stikine Resources holding the right to earn a collective 50% interest by spending $5 million on exploration and by placing the property into production.

The main claim area of the Ski property is located to the north of the Prime-Stikine Eskay Creek project, while the TOK claim gap is between certain claims making up the Eskay Creek property.

The latest reserve estimate by Prime Explorations includes portions of the 21B deposit and the Pumphouse Lake zone which occur in the TOK claim gap, and the northern extension of the 21B deposit on to the main area of the Ski property.

At a 0.1-oz.-gold cutoff grade, Adrian’s portion of the 21B deposit within the boundaries of the TOK claim gap is now estimated to contain 125,000 tons averaging 1 oz. gold and 26.99 oz. silver per ton.

The company’s portion of the Pumphouse Lake zone is estimated to contain 57,000 tons of 0.4 oz. gold and 17.18 oz. silver. Finally, the northern extension of the 21B deposit is estimated to have potential for a minimum of 80,000 tons grading 0.2 oz. gold and 40 oz. silver.

After converting silver to gold using current bullion prices, Adrian estimates all three deposits contain a total of about 248,000 gold-equivalent oz.

In comparison, the 1990 reserve estimate of 169,000 tons grading 0.66 oz. gold and 17.47 oz. silver represents 145,000 gold-equivalent oz. at current bullion prices. This reserve was also based on a cutoff grade of 0.1 oz. gold.

The latest reserve estimate for the TOK claim gap is considered to fall into a probable status, based upon the drill density of less than 82 ft., certainty of geologic continuity, predictability of gold and silver tenor and confirmation of drill-indicated results by underground sampling.

The calculation was done by the longitudinal (polygon) method. Assay results were not cut, and no allowances were made for dilution, minimum mining thickness or metal recoveries.

Base metal values were not calculated into the reserve, as these results are reported to be incomplete. Adrian noted, however, that recoverable values in zinc, lead and copper will be realized during mining of the reserves.

Adrian said the TOK claim gap reserves are contained within a single mineralized block, from 4.5 to 44.9 ft. true thickness, continuous from surface to 492 ft. downdip.

These reserves are the continuation of the high-grade 21B ore-bearing structure — the “Contact Main Ore Lens” — which is the object of underground exploration and development by Corona (TSE) on behalf of the Prime-Stikine joint venture.

The possible reserve calculation for the Pumphouse Lake zone takes into account drilling on the Pumphouse East, one of two separate subzones within the Pumphouse Lake zone. Base metal values were not calculated, but Adrian noted that an overall low base metal tenor is indicated by assay results.

No reserves were calculated for the recently discovered Mid-Fault subzone, owing to a lack of infill drilling and uncertain continuity. Adrian considers this subzone to have good exploration potential.

And the main claim area of the Ski property is also considered to have “excellent” potential to locate additional mineralization by continued drilling.

Under the terms of the joint venture with Prime and Stikine, Adrian will not be required to contribute to any costs required to place any of the reserves within the TOK claim gap into production.