Cominco/Delaware project

On the approach to the SNIP airstrip 65 miles north of Stewart one begins to understand the hazards of minerals exploration in British Columbia.

Sitting off to one side of the airstrip are the remains of a Bristol aircraft which crashed over a month ago. Landing with a load of jet fuel — and near a brush fire on top of that — all three crew members got out safely. (But in the process they probably qualified for the relay race in the summer olympics.) On the other side of the landing strip lies a small Beechcraft, one of last year’s casualties.

Accepting such risks is all part of doing business in the north and it has certainly paid off for Cominco Ltd. (TSE) and Delaware Resources Corp. (VSE). A production decision is expected in the next few months for their SNIP property which will be the second gold mine in the region after Skyline.

Cominco is currently refining capital costs for the project and a figure of $45 million has been suggested but that could change. After visiting the property, The Northern Miner gathers that a 300-ton- per-day milling operation is optimum, at least initially, increasing later as sufficient working places become available. But Delaware has been pushing a 500-ton start-up rate.

Delaware has spent almost $9 million on the property so far and Cominco (the operator) can back in for 60% by contributing double that expenditure ($18 million). At that point, it will be a 60/40 joint venture. The deal actually isn’t a bad one for Cominco whose participation has been risk-free thus far.

According to Bill Wolfe, Cominco’s exploration manager for western Canada, “there’s no doubt it will be a very rich, profitable, small mine.” And he confirmed that senior executives at Cominco have given their approval to “fast track” the SNIP development. In order to begin production in September, 1989, the joint venture would have to begin construction this year. But that time frame is a “best case scenario,” Wolfe admitted.

The area to the east of the main deposit will probably not be accessible to mining for several years. But Wolfe said that Delaware will probably fund a 4-hole drill program to block out additional reserves in this region. These holes will be put down from surface and will require a specialized drilling rig with good depth capacity. Some of the holes could be 1,200 ft or more.

At present, the joint venture is concentrating on the developed portion of the deposit because they will need well-defined stopes and an accurate grade assessment for a production decision. This decision could be made in August or September, The Northern Miner was told.

Mining will probably not be highly mechanized because of the variable vein widths; and dilution could be a problem because the “vein walls are not clean,” Wolfe conceded. In any event, a 20% dilution factor has been applied to reserves which is actually quite conservative. (Mechanized mining operations are volume oriented and it’s often at the expense of grade which increases operating costs and lowers profitability.) A cut-and-fill mining method will probably be utilized and, that being the case, about half the tailings will be returned underground as backfill. Profitable operation

Recent sample results from the 300-m level of the Twin zone suggests Cominco is absolutely right about SNIP being a profitable mining operation. Assay results are double those initially indicated from surface diamond drilling, a report prepared for Delaware by Cominco noted. Sampling results along 535 ft of strike length in the lower portion of the reserve block yielded exceptional results in the west drift, the west/east drift (which is immediately adjacent to and split by the 300 level crosscut) and also from the east drift.

In the west drift, 1.54 oz gold was returned across a width of 9 ft for 320 ft of strike length. The west/east drift graded 0.375 oz over 42.6 ft for 80 ft of strike length and the east drift averaged 0.37 oz over 9.8 ft for 135 ft of strike length. These are minimum widths because the mine working did not expose the entire thickness of the zone at the level. Drilling is planned on 12-m centres to determine the actual width of the zone.

The Twin zone has been faulted off in the east drift. In an attempt to locate a high grade drill intercept of 2.8 oz gold over 27.2 ft in hole No S-84 (which was interpreted to be the Twin zone) the drift was turned to the north. What appears to be a parallel mineralized zone was discovered in the footwall of the Twin zone.

Face sampling along this zone averaged 1.8 oz gold over a minimum average width of 9.1 ft along 130 ft of strike. This zone is open to the east and appears to be faulted off to the west. Drilling has indicated the presence of the Twin zone above the east drift as shown in hole UG13 which returned 0.37 oz gold over 18.4 ft; mineralization has also been indicated in several other holes. So far the Twin has been traced for a minimum 260 ft of strike length beyond the fault.

At the moment, one drill rig is proving up reserves on 25-m centres and a second smaller unit is drilling horizontal and inclined holes (12.5-m centres) to determine the true width of the Twin zone on the 300 level. First gold in 1975

The first gold showing at SNIP was discovered on a creek bottom in 1975; Cominco staked the ground in 1980 and in subsequent years trenched the showing, completed extensive geochemical work, prospecting and mapping before concluding an option agreement with Delaware in 1986.

Delaware funded a 12-hole drill program that year which returned significant gold values in 11 holes. This program was followed up by approximately 45,000 ft of drilling in 1987 which helped detail the structure and mineralization in the Twin zone orebody. Initially tested on 100-m fences, the drill hole spacing was later tightened up to 50 m, still quite wide for a gold deposit. But their confidence level was high enough to mount a major underground program which is still under way. Indeed, the main haulage level (180 m) is now in over 1,000 ft and it will open up new areas for underground drilling. Diesel power

Bringing in power from the B.C. Hydro grid or from Wrangell, Alaska, doesn’t appear feasible at this juncture but any new discoveries in the region could change this. So power will be supplied by diesel generators with fuel airlifted into the property. Road access isn’t particularly attractive because of environmental constraints. In any event, it would probably take two years to get approval.

Skyline Explorations is constructing a road from its Reg project to SNIP, probably to ensure air access during the winter months. The SNIP airstrip is several thousand feet lower and is almost accessible year round. About 55% of Skyline’s gold output will be going out in copper concentrate which will have to be flown out. So air access is critical.

Metallurgically the SNIP deposit is very clean and drill core samples yielded a 98% recovery rate; approximately 60% of the gold is recoverable by gravity separation and the remainder in flotation concentrate which will be treated with cyanide.

Cominco has a patented process for the cyanidation end of it. There is little copper in the ore so cyanide consumption is expected to be low. The gold is quite uniformly distributed and there is good reproducability in assays, Cominco said.