Atna in option deal with YGC in Yukon

Under a joint-venture agreement, Atna Resources (VSE) has the option to earn from YGC Resources (VSE) a 65% interest in eight base metal properties in the Yukon.

To do so, Atna must spend $1.5 million on each property and pay 300,000 common shares, or $300,000 per property, over five years.

All the properties are underlain by sericitic schists and phyllites of the Yukon Tanana group — the same rock type that hosts Cominco’s Kudz Ze Kayah massive sulphide project, which has an inferred resource of 14.3 million tons grading 5.5% zinc, 1% copper and 1.3% lead, plus 3.65 oz. silver and 0.035 oz. gold per ton.

Three of the properties (Money, Argus and Fox-Wolf-Lynx) are in the vicinity of Cominco’s discovery, while five (Mort, Clip, Baldy, Mickey and Matson Creek) are near Dawson City.

Previous work outlined large, multi-element soil anomalies and electromagnetic geophysical targets. Preliminary sampling and limited drilling indicate the presence of stratabound, massive sulphide mineralization.

Atna must spend at least $150,000 on exploration in 1995.

Meanwhile, YGC continues to await permits for the Ketza River-Grew Creek project. Plans involve operating the Grew Creek deposit (estimated at 290,000 tons grading 0.32 oz. gold per ton) as an open pit for the first 18 months (producing 62,000 oz.) and then as an underground mine (producing 28,000 oz.). The ore will be shipped 55 miles to its 495-ton-per-day Ketza River mill. Capital costs are projected at $5.2 million, with cash production costs for the pit estimated at US$243 per oz. Slightly higher costs are estimated for the underground phase. YGC is currently looking for a partner to assist with financing.

In addition to Grew Creek, the Ketza River property contains possible reserves of 209,000 tons grading 0.33 oz. Drilling in 1994 tested several zones, including the B-Mag zone which returned 10.2 ft. of 0.41 oz.; 5.9 ft. of 0.28 oz.; 11.8 ft. of 0.2 oz.; and 9.8 ft. of 0.16 oz. It is believed the zone may extend to another gold occurrence 500 ft. to the southwest, and additional drilling will test this potential.

Hemlo Gold Mines (TSE) can earn a 60% interest in the Ketza River property by spending $2 million over four years. The option does not include the mill or known reserves. Summer drilling is expected to test several targets for bulk-tonnage potential.

Wheaton River Minerals (TSE) is YGC’s largest shareholder, with a 54% interest.