The in situ geological resource at the Red Chris project in north-central British Columbia is now estimated at 100.1 million tonnes grading 0.58% copper and 0.46 grams gold per tonne.
American Bullion Minerals (VSE), which holds an 80% interest in the project, drilled 55 holes on the property last year.
The new resource estimate is based on 129 drill holes and a copper cutoff grade of 0.4%. Using a 0.2% copper cutoff, the resource jumps to 320 million tonnes grading 0.38% copper and 0.3 grams gold.
American Bullion reports that only 35% of the exploration potential at Red Chris has been drill-tested, and that further drilling is to begin in April. President John Brock plans to spend in the order of $4.5 million this year, including more than 21,000 metres of infill and stepout drilling. Ongoing work also includes metallurgical and economic scoping studies. Red Chris is 18 km from Iskut on the Stewart-Cassiar Highway and 120 km north of B.C. Rail’s Dease Lake line. Brock says future concentrate could be trucked 250 km to the port of Stewart, or, alternatively, the rail line could be extended. B.C. Rail’s right-of-way extends to within 10 km of the property. With regard to power, the Dease Lake-Stewart power grid, which could be tapped into at Iskut, has sufficient capacity to support a new mine. The other option is to build a coal-fired generating plant.
Brock hopes to complete a prefeasibility study this year, and says he expects to encounter no trouble raising additional funding. The company has $2 million in working capital. Warrants for the purchase of a total of 2.4 million shares (expiring between May, 1995, and August, 1995) are expected to bring in $4 million.
American Bullion has 8.6 million shares outstanding, or about 11.4 million on a fully diluted basis.
Teck (TSE) holds the remaining 20% interest in Red Chris and can increase its interest to 55% by funding the final feasibility and production.
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