Chevron signs major deal on N.W.T. gold properties

Junior mining companies don’t often take in a $1- million immediate cash payment from a major mining company as part of an option agreement — particularly for gold properties located in the Northwest Territories where exploration costs usually run higher than average.

But Silver Hart Mines (VSE) has made such a deal with Chevron Minerals, and, in addition to the immediate payment, Chevron must make four additional payments of $.5 million each in the years 1989 to 1992 inclusive. To earn a 50% participating interest in the properties, Chevron must also incur expenditures of a minimum of $1 million this year and $1.5 million per annum in future years to an aggregate of $6.25 million.

The deal involves Silver Hart’s Pistol Lake, Turner Lake and Hood River properties, all located on the west side of Bathurst Inlet. The properties are located on tidewater and during the summer months are accessible by barge.

According to Silver Hart Vice- president John McCutcheon, the Pistol Lake property is of particular interest because it is geologically similar to the Contwoyto Lake (Lupin) deposit situated 110 miles to the southwest, and to the well- known Homestake deposit in the Black Hills of South Dakota.

Silver Hart has explored the property since 1984 and has outlined a geological resource in two zones of 540,000 tons grading 0.406 oz gold per ton. The company said the zones are open and additional drilling should “increase this tonnage substantially.”

Numerous gold occurrences have also been found in an area measuring 3,000×10,000 ft, the company said. Silver Hart staked the 15,500-acre Turner Lake property in 1984 and in 1987 the first diamond drilling was completed on the property. The two best holes returned 0.375 oz over 29.1 ft and 0.432 oz over 15.6 ft respectively.

The company said results to date indicate a strike length in excess of 1,800 ft with the mineralized zone offering “potential for a large orebody.” The third property, Hood River, has received little work in the past.

Chevron is reported to be well into a $1.5-million summer program on the properties. McCutcheon said the program will include a significant amount of drilling, with work being concentrated on the Pistol Lake property.