Vancouver – Cusac Gold Mines (CQC-T, CUSIF-O) is consolidating its grip on the historic Cassiar mining region of B.C., buying American Bonanza Golds (BZA-T, ABGFF-O) Taurus project for US$11 million and three million Cusac shares.
The Taurus project consists of 46 claims covering the majority of the Taurus deposit, which hosts a 43-101compliant inferred resource of 32 million tonnes grading one gram gold per tonne. Cusac already held the 30% of the Taurus deposit not included in the 46 claims.
The deposit was chopped up anyone looking to do something with the project had to consolidate it, says David Brett, Cusac president. And we werent going to sell, so it had to be us.
The agreement requires Cusac to pay 1.5 million common shares immediately, US$6 million over two years, and US$3 million on completion of a feasibility study or production, whichever comes first. A further 1.5 million shares are payable in two years. If gold closes at US$800 per oz. for 100 consecutive days, Cusac will have to pay Bonanza an additional US$1 million in 2 years and US$1 million at feasibility, unless Cusac completes the purchase within 12 months.
Bonanza came to own the Taurus project through a merger with International Taurus Resources in early 2005. The site had already seen considerable exploration: various previous owners conducted over 25,000 meters of diamond drilling on the property in the 1990s, including 12,700 meters between 1994 and 1996 by Cyprus Canada, which became part of Phelps Dodge, a company recently acquired by Freeport-McMoRan Copper & Gold (FCX-N).
Busy with other projects in Quebec, Nevada, and Arizona, Bonanza had left the Taurus project idle for the two years. Brett says Cusac had longed eyed the Taurus project and gradually moved in. It made a lot of sense for us to take it on, with our expertise in this area, he says. It took a good two months to put the agreement together.
Cusac holds more than 170 km2 in the area and calls the entire holding the Table Mountain property. The property is host to a number of different deposits and prospects, including the historic Cassiar gold camp.
In the past gold was mined from high-grade quartz veins in Table Mountain, which has a cap rock of argillite that acted to concentrate gold in the veins. The Taurus project mineralogy is different: it is down in the valley where the argillite cap is removed and thus the gold-bearing rock has altered, creating broad zones of disseminated, low-grade mineralization.
Brett says the project is an obvious open-pit site with a relatively low stripping ratio. Some previous metallurgical testing indicated good recoveries from heap leaching but other tests came back inconclusive, so the extraction method is still being worked out. If we can show its heap leachable then of course the economics are much better, says Brett.
Before any development can proceed, however, Cusac has to work out an updated resource estimate. One of our key objectives it to try and ratchet the grade of the deposit up, Brett says. Until recently the entire Table Mountain area was viewed only as a high-grade quartz vein system, so only the vein segments of drill cores were sampled, leaving the wall rock untouched. That means there are a lot of zero intervals in the resource estimate that could well be 1 gram or 0.5 gram gold, says Brett.
Cusac also intends to continue exploring the Table Mountain site. The Taurus deposit remains open to the west and south. The company also recently acquired a number of claims in a nearby canyon. Its what miners like to call a massive quartz blowout, Brett says. Its probably been prospected by every prospector in the area but there has been limited drilling in the area, so were going in to explore.
Be the first to comment on "Cusac nabs Taurus project from Bonanza"