Cusac negotiates Table Mt. purchase

A definitive option and sale agreement was recently signed by Cusac Industries (TSE) which gives the company the right to buy a 100% interest in the Table Mountain gold property near Cassiar, B.C., from Total Energold (TSE).

The sale includes 118 square miles of staked or optioned mineral claims, a 300 ton-per-day mill, as well as existing mining equipment and buildings. Cusac will pay Energold $100,000 in common stock plus $650,000 in cash on the closing date of the asset sale, June 15, 1992.

Cusac will pay an additional $750,000 by mid-March, 1993, secured by a promissory note from Cusac. As well, Cusac will assign Total a 2% net smelter return on the property to a maximum of $500,000.

At last report, Total Energold estimated drill indicated reserves on the property at 75,000 tons grading 0.54 oz. gold per ton based on about 40,000 ft. of drilling.

Guilford Brett, president of Cusac, said the company plans to develop the western portion of the Bain vein by decline. He described the structure as “geologically very similar to the Eileen vein, from which Total mined about 70,000 tons of ore averaging 0.78 oz. gold.

Reserves in the Bain vein cover a strike extent of about 600 ft. and a vertical extent of about 150 ft., while the structure itself is about 6 feet wide.

Based on Total’s experience on the Eileen, Brett expects grades in the top 30-40 ft. of the Bain vein to be upwards of 2 oz. As a result, he sees the average grade of the estimated 45,000-ton ore body to be between 0.6 and 1.0 oz.

Brett said he is now concentrating on completing a financing to raise the purchase price and development capital for the project.

He estimated the cost at developing, mining and milling the reserve at about $3.8 million. In order to cover the purchase cost as well as provide working and development capital, Brett hopes to raise about $5.4 million through some form of convertible debenture and gold loan combination.