A production decision is dependent, the company says, upon it successfully test mining a stope to determine ground conditions, restructuring an existing 5% net smelter return royalty and obtaining federal government assistance in the form of an Atlantic Canada Opportunities Agency (ACOA) grant and government-supplied infrastructure.
Assuming the above conditions are met, Dolphin, which is 44% owned by Corona Corp. (TSE), says a production decision could be made before year-end.
Initial metallurgical testing suggests a 97-98% recovery rate, the company reports.
Dolphin hopes to have a 12-mile access road completed in May. An ACOA grant of $300,000 was obtained to help pay for the road construction. Exploration plans
Exploration work worth $3.8 million at Cape Ray is planned for the May-October, 1989, season. The work will involve surface drilling on the 04 and 51 zones, underground drilling on the 41 zone and a test stope.
Last year, the company drilled 86 holes representing 56,689 ft. Cutting all assays to 1.3 oz gold per ton, the company calculates a “mineral inventory” of 975,000 tons grading 0.22 oz.
“An in-house pre-feasibility study determined a mill head grade of 0.3 oz will be required to be economic given current market conditions,” writes the company. “Therefore, a diluted potentially mineable reserve of 362,000 tons with a grade of 0.315 oz with an additional reserve of 105,000 tons with a grade of 0.252 oz has been delineated.”
The Cape Ray mineralization also contains silver and associated base metal values. Dolphin’s land holding covers about 23 miles of strike length of the Cape Ray fault system.
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