Citadel discovers new zone

A new ore zone has been discovered by Citadel Gold Mines at its property near Wawa, Ont. The zone occurs to the south of the existing Jubilee orebody, according to R. Campbell Todd, chairman.

Estimating the reserve potential at one million tons grading 0.19 to 0.21 oz gold, he confirms the geometry of the new zone is similar to the Jubilee. Flat-lying 25 degrees the zone has been outlined over a vertical depth of 664 ft in 27 drill holes and many of these returned impressive gold values over good widths.

Some of the better values included: 18 ft of 0.58 oz, 10 ft averaging 0.42 oz, 14.5 ft grading 0.4 oz, 18.7 ft at 0.33 oz, and 8.3 ft of 0.3 oz. Most of the remaining holes averaged 0.1 oz or higher over good mining widths.

Mr Todd says the zone appears to plunge beneath the Minto underground workings at a vertical depth of 850 ft. Owned by Citadel, these workings produced 21,195 oz gold from 62,167 tons of ore grading 0.34 oz from 1931-34. Drifting is under way south of the Jubilee orebody on the third, fourth, fifth and sixth levels of the Citadel mine. The purpose of the program is to intersect the footwall of the new zone which would permit underground diamond drilling and reserve delineation. The sixth level will be extended approximately 1,900 ft.

The company has spent about $4.5 million on the property since last October and most of it has been to reconfirm previous drill results. The work has been funded by flow- through and Mr Todd says they have been promised another $2.5 million from mvp Fund and $5 million from cmp. To date, $1 million has been drawn down from cmp at $7.45 per share and another $500,000 from mvp.

He estimates reserves in the Jubilee and Pango zones at about 1.4 million tons grading 0.18 oz gold and both of these have been drilled intensively. About 32,000 tons of material have been stockpiled on surface and this is being carried at 0.12 oz. Mill on property

The company has a mill on the property which it plans to rehabilitate. The plant would be used for custom milling purposes in addition to its own milling requirements. The mill is over 80% complete but they will have to locate some additional equipment. Mr Todd estimates the work will cost approximately $3 million for a 700-ton- per-day plant. About 500 tons would be devoted to Citadel production and 250 tons to custom milling.

Citadel is managed jointly by Prairie Pacific Energy of Calgary and Canhorn Mining of Toronto with interests of 29.2% and 34.5% respectively.