Cariboo geology adds up for International Wayside

Over the past year, International Wayside Gold Mines (IWA-V) has made significant progress in its understanding of the structure of, and controls to, gold mineralization in the Cariboo camp in central British Columbia.

Geologic studies by Panterra Geoservices and by Gerry Ray of the British Columbia Geological Survey demonstrate both the structural complexity of the new Bonanza Ledge discovery and the unique geochemical characteristics of this style of mineralization relative to the replacement deposits found elsewhere in the district.

Based on work to date, Art Ettlinger, a retail analyst with Yorkton Securities, recommends International Wayside as a speculative buy at current prices. Wayside trades at 22 in a 52-week range of $2.80-13. The junior, led by Frank Callaghan, has 38.4 million shares outstanding and about $800,000 remaining in its treasury.

The Cariboo gold project comprises 153 sq. km near the town of Wells, 85 km east of Quesnel. The project centres on the historic Cariboo Gold Quartz, Island Mountain-Aurum and Mosquito Creek mines, which collectively produced more than 1.2 million oz. from 1933 to 1987.

Approximately 70% of past production was mined from individual quartz veins and narrow zones of quartz stockworks in units of dark-grey metasediments at an average grade of 0.38 oz. per ton (13 grams per tonne). The remainder of the gold was mined from pyritic replacement-type bodies in a unit of bleached marble, marking the Baker-Rainbow contact. The replacement bodies averaged a much higher grade of 0.63 oz. (21.6 grams) and occurred as rod-like shoots or pancake-like lenses in the plane of the limestone unit.

Wayside has been operating in this district since 1994, when it optioned the Cariboo group of claims from Mosquito Consolidated Gold Mines (MSQ-V). Wayside can earn an initial half-interest in three groups of contiguous claims by incurring certain yearly exploration expenditures and completing a positive feasibility study. The remaining 50% can be purchased for cash payments totalling $4 million by Dec. 31, 2003. Wayside has expanded its position in the Cariboo camp through staking and additional purchase option agreements.

Early work by Wayside targeted the bulk-tonnage potential of the Sanders, Pinkerton and Rainbow zones of the historic Cariboo Gold Quartz mine, on the flank of Cow Mountain. Wayside recently announced an updated resource estimate for Cow Mountain, prepared independently by Giroux Consultants of Vancouver.

Data used in the new resource estimate included eight diamond drill holes and 135 surface percussion drill holes completed by Wharf Resources (1980-81), plus 71 surface and 17 underground core holes, as well as 135 underground percussion holes completed by Wayside (1995-1998).

At a 0.68-gram cutoff, Giroux Consultants estimated an indicated resource of 6 million tonnes grading 2.23 grams gold per tonne, equivalent to 430,885 contained ounces. An additional 1.5 million tonnes grading 1.85 grams, equal to 90,936 oz., were classified as inferred.

This updated resource estimate compares to a previous independent estimate by GeoSim Services, which determined an inferred resource of 515,000 oz. contained in 7.9 million tonnes grading 2.03 grams, based on a similar, 0.69-gram cutoff. However, GeoSim concluded that a perceived bias toward underground percussion drilling data raised considerable doubt as to the reliability of any mineral resource estimate. In order to upgrade the classification from inferred to measured and indicated, GeoSim recommended a program of drilling to twin some of the percussion holes and thereby increase the confidence level.

Giroux Consultants noted that while the average grade of gold differs with each method of drilling, for the most part, each method tested different parts of the deposit, and that this resulted in discrepancies; also, different drilling methods were sampled at different intervals. “For the purpose of estimating a preliminary resource, there is no reason not to use all the drill data,” concluded Giroux, though the firm noted that down-hole surveys were not completed in any of the holes. To verify previous results, check-sampling was performed on 413 pulps.

Wayside intends to subject the Cow Mountain resource to a scoping-level study.

Ettlinger advises investors not to focus on the resource development activities at Cow Mountain, but rather monitor new exploration drilling results, such as at Island Mountain and in the Bonanza Ledge area.

The high-grade Bonanza Ledge style of pyritic mineralization was identified in the footwall of the BC vein in March 2000 by Ned Reid. Forty-eight holes tested an area 412 metres along strike, with the bulk of the holes collared in a 140-metre section. Highlights included 25.8 metres grading 24.6 grams in hole 10 and 33.2 metres grading 10.6 grams in hole 13. The higher-grade zones showed structural complexities with limited continuity.

The Bonanza Ledge zone represents a combination of sheeted veinlet and replacement mineralization that may form one or more folded discordant vein systems, concludes Panterra Geoservices. The zone represents early or pre-deformation 2-style of mineralization that is comparable in mineralogy, timing and associated alteration to replacement mineralization elsewhere in the camp.

The vein and replacement mineralization at the Island Mountain and Cariboo Gold Quartz mines display a similar spatial association and timing, and together suggest a camp-wide syn-deformation and metamorphic mineralizing event.

Last fall, Wayside conducted 20 line km of ground geophysical surveys in the immediate area of the Bonanza Ledge discovery. In addition, mapping and soil sampling were carried out on the Barkerville and Cow Mountains from a 47-line-km cut grid.