Assoc. Porcupine, Amer. Reserve test deep potential at Paymaster

A deep-drilling program involving two surface rigs is under way at the Paymaster gold project in Timmins, Ont., where partners Associated Porcupine Mines (TSE) and American Reserve Mining (VSE) are hoping to find new reserves below 6,000 ft.

The drilling campaign, part of a $22-million mine dewatering and exploration program, is designed to test a deep area below the lowest levels of prior workings where the companies say a previous hole intersected substantial values over mineable widths. The mine was in production from 1934 until April, 1966, when operations were suspended. Associated Porcupine is the current owner. American Reserve has an option to earn up to a 50% interest in the project by funding exploration and development up to the point of commerical production.

Current plans call for construction of new milling facilities at a cost of $6-$8 million. Projected is a production rate of 500 tons of ore per day. Production cost

Estimated production cost, based on a head grade of 0.23 oz gold per ton and a 95% recovery rate, is less than $250(US) per oz.

According to a consultant’s report, the property is divided into two main areas by a sill of altered basic intrusive outcropping along the boundary of Tisdale and Deloro twps. The northern area, in Tisdale Twp., includes the No 5 shaft and the veins from which most of the ore was previously mined.

Most of the present reserves are contained in the 36 vein at the No 6 winze; reserves total about 794,500 tons (all classes, cut and diluted) averaging 0.23 oz. A production rate of 175,000 tons per year would give the mining operation a lifespan of 4 1/2 years.

Potential to boost reserves is believed to exist below the 6,175-ft level, where a structure has been intersected at 6,475 ft by a previous drill hole which cut 24 ft of 0.43 oz and 10 ft of 0.43 oz, or about 0.3 oz over a horizontal width of 32 ft.

Planned exploration of the deep target area involves drilling from crosscuts on the 6,025-ft level (which would require rehabilitation of the old shaft and winze) and drilling from surface. Also planned is a small program of shallow drill holes on two target areas on the northern part of the property.

Associated Porcupine President C. A. Burns said dewatering, not yet started, could take about one year to complete, with the drilling (surface and underground) and sinking of two new winzes (to 6,325 ft) expected to take another six months.