Big Creek hits copper at Casino

The first hole of an initial $500,000 drilling program on the Casino property in southern Yukon intersected 523 ft. (from 77 ft. to 600 ft.) at an average grade of 0.021 oz. gold, 0.59% copper and 0.040% molybdenum sulphide.

The property is owned by Casino Silver Mines (VSE) while Big Creek Resources (VSE), through a somewhat complicated agreement, holds an option to earn a 50% working interest.

Consultant Archer Cathro & Associates (ACA) is directing the exploration program and held the original option prior to assigning it to Big Creek. To earn the right to sell the property, Big Creek must spend a minimum of $2 million on the property by year-end and an additional $1.5 million in 1993. Big Creek has the right to sell the property at any time prior to June 1, 1995, for a minimum of $15 million.

Proceeds are to be split 20% to Big Creek and 80% to Casino on the first $15 million, 50-50 on any portion exceeding $15 million up to $100 million, and 60-40 in favor of Big Creek for the portion over $100 million. ACA is entitled to 5% of Big Creek’s share up to $100 million and 10% for sale proceeds exceeding $100 million.

If the property is not sold, Big Creek can earn a 50% interest by spending an additional $4 million prior to May 1, 1998, subject to a 5% net profits interest to ACA.

Big Creek also has the option to reduce Casino’s interest to a 10% net profits interest by paying the company a total of $15 million: $1 million at the end of 1992; a further $2 million by the end of 1993; and $12 million by the end of 1994.

Alan Archer, president of ACA, said the objective of the current program is to outline an initial high-grade reserve as well as to establish more accurate gold and copper grades. He hopes to outline an initial reserve of about 70 million tons which could be mined for an accelerated payback. Drilling on the property in the late 1960s and early 1970s outlined a preliminary open pit reserve of about 170 million tons grading 0.37% copper and 0.039% molybdenum sulphide based on a strip ratio of about 1.67-to-1. Archer said the size of the deposit would increase to about 417 million tons of a lesser grade if reserves are taken to a depth of 1,000 ft. Archer said the grade of deposit has always been considered too low to be economic in the past, but he noted that previous drilling experienced poor core recoveries and gold assaying was generally not carried out or was inaccurate.

The program’s first hole was centred between four old holes on a 400-ft. grid at the southeast end of the deposit. One of the four old surrounding holes (P22) returned one of the better copper grades on the property, intersecting over 1% copper over the first 210 ft. and 0.42% copper over the remaining 960 ft.

The second hole in the current program, assays from which are yet to be released, twinned hole P22.

Jim Stephen, president of Big Creek, said the company is looking at raising about $1.5 million to fund additional work following the completion of the current 5,000-ft., 8-hole infill drilling program.

Big Creek Resources has about seven million shares outstanding on a fully diluted basis.

Teck owns 38.4% of Casino Silver Mines’ 4.4 million outstanding shares.