Delaware/Cominco venture said a hot play in B.C.

British investors have apparently developed an insatiable appetite for gold properties in the Iskut River area of northwestern B.C. This time it’s the snip property of Cominco and Delaware Resources which has become one of the hottest exploration plays in the region.

The property definitely has some production potential but likely at a much lower grade than the nearby Skyline Explorations project which should be in production next year. Indeed, equipment is currently being airlifted into the property.

Delaware’s stock has been a star performer this season, something Larry Nagy, vice-president exploration, attributes to strong overseas support. London-based Kitcat & Aitken, a member of the Royal Bank of Canada group, has just issued an investment report on Delaware with a strong buy recommendation at current prices. It suggests the Delaware property could be the “richest Canadian discovery since Hemlo” which is quite a statement for any investment house, let alone one controlled by the Royal Bank.

In any event, Cominco has not yet announced reserves for the project but Mr Nagy confirms an estimate should be released this month. Approximately 40,000 ft of core drilling will have been completed by year-end and two drill rigs have operated throughout the summer. The gold appears to be structurally controlled and Cominco has been drilling on 100-m centres which is very wide for a gold project. Cominco tightened up its spacing this summer to 50 m which still suggests the company views the project as a bulk tonnage situation.

Mr Nagy estimates the tonnage potential at several million tons, claiming the strike length of the discovery is 1,100 m and it has been tested over a vertical extent of 650 m. He says gold values have been found throughout this horizon, noting the zones have an average width of about 2.5 m. “We are very confident that we have a grade of 0.4 oz gold per ton and some higher grade sections,” he adds. The gold occurs in quartz veining associated with a major shear structure.

There are two or more parallel structures and less intense sub- parallel ones but the Twin zone is “pretty well continuous,” he says. (A number of intersections with visible gold were recently reported from the Twin zone.) The gold is generally free and although sulphides do exist there is no arsenopyrite, which is a big plus for the project.

Camp facilities are being winterized and an underground program is planned over the winter. The adit will be driven into one of the thicker sections of the zone. A nearby airstrip will be upgraded to handle DC-3 aircraft for the work. After the underground program is completed, Delaware will have spent approximately $4 million on the project and earned a 100% working interest. Cominco can back in for 60% by paying 2.25 times what Delaware put up.

Mr Nagy says that Delaware would like to make a production decision by next spring. The company has $1.8 million in its treasury and doesn’t anticipate any problem financing its participation.