Deep drilling at the Bulyanhulu gold project in northwestern Tanzania has intersected gold mineralization some 300 metres beyond the previously defined depth to nearly 1,100 metres below surface.
Sutton Resources (stt-v) has three drill rigs working in an effort to expand the resource of the Reef 1 system. The effort is part of a US$20-million development program aimed at advancing the project to the final feasibility stage.
The company holds an 85% interest in the project, with the balance held by the Tanzanian government.
Hole 288 encountered a 1.6-metre true-width interval grading 24.8 grams gold per tonne at a vertical depth of 1,082 metres. Preliminary results for two other deep holes include a true width of 7.8 metres grading 8.7 grams at a vertical depth of 905 metres in hole 277, and a 13-metre intercept at a depth of 943 metres in hole 310.
Results are not yet available for hole 310.
Sutton is in the process of going underground on the Reef 1 system via a decline. The company has moved 35 metres of overburden to reach bedrock and expects to begin portal excavation before May. The underground development program will form the basis of a bankable feasibility study, scheduled for completion in early 1998.
In light of the latest drill results, the company is considering sinking a shaft prior to the delivery of the feasibility study. Sutton is more than adequately funded, with working capital of US$33.8 million.
The Bulyanhulu deposit is a quartz-sulphide shear-vein (reef) system hosted in a greenstone belt in the Lake Victoria goldfields.
The main Reef 1 system, comprising Reefs 1 and 0, is a classic stratabound deposit occurring in a sedimentary exhalative unit at the contact of intermediate and felsic volcanics.
Reef 2 is 500 metres northeast of Reef 1 and consists of a series of en echelon vein structures in sheared intermediate volcanics.
Sutton has received an updated resource estimate for Bulyanhulu from an independent engineering consultant, incorporating 40 additional infill holes and two of the most recent deep holes.
The new resource estimate is calculated at 13.4 million tonnes grading 13.01 grams, compared with the previous estimate of 10.5 million tonnes grading 14.92 grams. The contained in situ resource stands at 5.6 million oz. — an increase of 580,000 oz. over the previous estimate.
The estimate is based on a cutoff grade of 5 grams over a minimum width of 1.5 metres.
The bulk of the resource is contained in the Reef 1 system, which has an average true thickness of 4.4 metres.
At the annual meeting, shareholders voted in favor of a 2-for-1 stock split, which will increase the number of shares outstanding to 28 million, or 32.8 million fully diluted.
At the same meeting, Sutton downplayed the recent decision of BHP Minerals to pull out of a joint venture on the northern portion of the Kagera nickel-cobalt-copper project, also in Tanzania.
Sutton regains a 100% interest over the entire Kagera reconnaissance licence — including the Kabanga deposit, which contains a resource of 31 million tonnes grading 1.5% nickel, 0.22% copper and 0.13% cobalt, based on a 0.5% nickel cutoff.
Using a cutoff of 1.19% nickel, the resource is estimated to be 10.8 million tonnes grading 2.36% nickel, 0.31% copper and 0.18% cobalt.
The company is seeking a senior joint-venture partner to continue to advance the Kabanga project toward production.
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