Despite remote location Sulphurets’ Kerr looks viable

Based on work during the 1988 season, the company estimates it has outlined an area having in excess of 66 million tons of 0.86% copper and 0.01 oz gold per ton.

But because the deposit is still open to the south, north and down dip to the west — and based on geophysical surveys, alteration and a bounding structure continuing to the north — the company anticipates additional drilling will result in a substantial increase in the size of the deposit.

Robert Hewton, vice-president, said a realistic target is between 100 and 200 million tons grading close to 1% copper, with 0.01 oz gold. “Many areas of the deposit do have in excess of 1% copper in the drill holes,” said Hewton. “But because we were originally looking for gold-silver veins on this property, the equipment we used wasn’t suitable for the deep testing required for the kind of deposit we are looking at now. So the information used to calculate tonnage, and more importantly average grade, is based on a number of holes never having penetrated all the way through.”

The independent study used a mining rate of about 16,000 tons per day and took into consideration road transportation and smelter charges.

“We factored in an estimate of the cost of building a road from our property to the Stewart-Cassiar Highway,” said Hewton, pointing out that a large and well developed road would be required for a 15-20 year period, rather than a temporary road that might suffice for a short-lived gold mining operation.

A government/industry study is already determining the most feasible access route into the active Iskut and Unuk River areas where the project is located. If realized, road costs would likely be shared with a growing number of companies working nearby, such as Calpine Resources to the north.

Hewton said the results of the preliminary study show the value of Kerr-grade rock would be about twice the operating cost, which should allow for considerable sensitivity to commodity prices and exchange rates. The study was based on $1(US) per pound of copper and $450(US) per ounce of gold.

The study also took into account the fact the deposit trends through a ridge, giving relatively low strip ratios and allowing for horizontal or downhill haulage.

The company is expecting that recoveries will be 85-90% for copper, and 55-60% for gold based on results from composite samples comprising core from drill holes sent for metallurgical testing. Hewton said the values were common for porphyry type copper-gold deposits and are similar to those being achieved at producing mines in the province.

Now that a re-organization of the company is complete, Sulphurets owns 100% of the project. A comprehensive exploration program is being planned for 1989 to include metallurgical testing, preliminary environmental studies, access route studies, economic appraisals and diamond drilling to define the deposit and delineate reserves.

The company is currently evaluating proposals from several major mining companies regarding financing for the 1989 and future exploration programs, with the objective of making a deal that will ensure the long term future of Sulphurets Gold.

“A porphyry deposit like this requires major financing and we realize somebody has to provide that financing,” said Hewton. “We just want to make sure that when the property is in production we benefit, because we made the discovery.”

Sulphurets is owned about 70% by Western Canadian Mining (VSE), which in turn is an associated company of Cassiar Mining (TSE) and Consolidated Brinco Limited (TSE).

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