Athabaska Increases Reserves at Nicholas Lake

James Kermeen, president, said the new in-house reserve calculation represents a 67% increase in tonnage from the previous estimate of 600,000 tons grading 0.38 oz gold per ton. Athabaska has earned a 60% interest in the project from Chevron Minerals.

Chevron has retained the right to increase its present 40% interest to 55% by completing a feasibility study, at which point it would take over as project operator.

“We are very encouraged by the results we are seeing now,” said Godfrey Walton of Chevron Minerals’ Vancouver office. The company has prepared its own reserve estimate although this will not be made public.

Since taking an option on the property just over a year ago, Athabaska has completed 56 holes representing 30,677 ft of drilling.

Work has focused on the main showing which contains seven steeply-dipping quartz-sulphide veins within a highly altered intrusive, a mineralized stockwork near the eastern tip of the intrusive and some contact mineralization.

The A-1 and A-2 veins make up the bulk of the reserves. Recent results from the A-1 vein include 12.2 ft of 0.854 oz gold, 4.3 ft of 0.365 oz, 5.8 ft of 0.172 oz, 12.1 ft of 0.437 oz and 5.7 ft of 0.186 oz. Drilling on the A-2 returned 5.1 ft of 0.782 oz, 15 ft of 0.463 oz and 3.1 ft of 0.253 oz.

Selected results from other veins include 16.4 ft of 0.521 oz, 3.3 ft of 2.06 oz, 6.6 ft of 0.505 oz, 4.2 ft of 0.347 oz and 1.5 ft of 2.846 oz. The stockwork returned 42.4 ft of 0.173 oz including 9.6 ft of 0.248 oz while the contact mineralization returned 1.3 ft and 1.6 ft of 0.433.

Athabaska based its reserve calculation on a cut-off grade of 0.15 oz. The company said its probable category (525,000 tons) is measured reserves lying within 25 m of drill penetration points while the possible category (475,000 tons) represents “a reasonable extension of the probable reserves based on geological evidence the mineralized vein structures continue to depth”.

Athabaska considers the indicated reserve to be enough to justify an underground program. It is planned for early 1990 so that a winter road from Yellowknife to the nearby Discovery mine can be used. Discovery is a former producer that turned out one million ounces of gold from the same amount of ore.

In the meantime, the company intends to continue surface drilling to increase reserves at the Main Showing and to test other structures on the property. The 1989 program will include over 16,000 ft of drilling, geological, geochemical and geophysical surveys and environmental studies.

Metallurgical test work will also continue; a particularly important component since the mineralization contains amounts of arsenopyrite and other sulphides.

Kermeen said, however, that the first tests show the gold to be free, not tied to the arsenopyrite, and this will allow recoveries in the 95-95% range with straight cyanidation. But he conceded a bulk sample would have to be taken to determine an average recovery rate more accurately.

Market response to Athabaska’s new reserve estimate has been quiet, with some concern as to the number of options extended to St. Phillips Resources (VSE) which is involved in a recent nickel find in Quebec. Both St. Phillips and Athabaska are promoted by Eugene and Frank Sirianni.

St. Phillips will have about 1.4 million shares or about 17% of Athabaska Gold after exercising all the options that came with a recent private placement involving 700,000 shares. The two principals of Athabaska, however, jointly retain a position of some 2.0 million shares.

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