Cove financing Granges work on Alpine project in Nelson

Already active in southeastern B.C., Granges Exploration has optioned Cove Energy’s Alpine project near Nelson. The 10,000-acre property has been tied up by a prominent U.S. family for years; but Cove managed to secure an unencumbered 100% interest in the ground earlier this year.

An 8-mile access road has been completed into the property and Granges has started an $850,000 exploration and development program which is being funded by Cove on a flow-through basis. Granges can earn a 50% interest in the project by funding $2 million in subsequent exploration and development costs. Granges has also agreed to purchase 333,333 of Cove’s common shares at 90 cents each.

A Vancouver consulting firm, Minequest Exploration Associates, has concluded a threshold target of 200,000 tons grading 0.4 oz gold is reasonable for the property. Old mine workings are quite extensive and they were driven on shallow- dipping quartz veins in granitic rocks. Past production was modest but relatively high grade. The quartz veins are strong and persistent and historically most of the gold was free milling. Appreciable amounts of silver also existed.

The underground workings appear to be in good condition but some retimbering will be required at portals and in heavily faulted areas. The downdip extensions of various vein structures could be tested from surface but underground drilling might be feasible as well.

The joint venture will evaluate the economics of processing 25,000 tons of dump material at Cominco’s Trail smelter which is located 40 miles away. Also, they have not ruled out the possibility of installing a small mill on the property for this material. Net proceeds from the dump material will be shared 70% by Cove and 30% by Granges.