Drilling starts on North Kemess

Diamond drilling was started recently on the North Kemess property, 100% owned by El Condor Resources (VSE).

The property covers about 11 square miles adjacent and north of the South Kemess property owned 60% by El Condor and 40% by St. Philips Resources (VSE), about 200 miles north of Fort St. James, B.C.

Based on a limited amount of previous exploration drilling on the North Kemess property, El Condor estimates geological reserves at about 128 million tons grading 0.19% copper and 0.011 oz. gold per ton.

The current drilling program will test four large copper-gold targets. Two of the drill targets, the Sovereign and Nugget, cover an area of highly altered volcanic and intrusive rocks within a 9,800 x 3,300-ft. coincident IP chargeability and gold-copper soil geochemical anomaly.

The drilling will also test the Kemess East target, a 6,300 x 3,300-ft. IP and gold-copper soil anomaly.

El Condor notes that extensive gold-copper stockwork-style mineralization occurs within the zone, with individual samples grading up to 0.41 oz. gold. Initial footage for the program will be about 15,000 ft. with 5-6 holes on each target. The company plans to follow up the work with further drilling on the most attractive areas.

Meanwhile, El Condor and St. Philips are still working out the details on exploration plans for the South Kemess property.

After an extensive infill and stepout drilling program on the property last year, the partners estimated reserves at 228 million tons grading 0.23% copper and 0.019 oz. gold based on a copper-equivalent cutoff grade of 0.40%. El Condor had hoped to spend about $10.5 million this season on further diamond drilling, bulk sampling, metallurgical testing and engineering studies for the South Kemess property, but St. Philips’ financing fell through.

Rio Algom (TSE), which already owns about 30% of St. Philips’ outstanding shares, decided not to exercise a purchase option on an additional 1.26 million shares at $3 each.

Consequently, St. Philips is unable to come up with its share of the proposed budget. A clause in El Condor’s property agreement with St. Philips stipulates that St. Philips can limit the exploration budget to $1 million per year.

While discussions are continuing on expanding this year’s budget, the two companies recently approved a 3-month, $1-million engineering and permitting program.

The work will focus on collecting data required for governmental permitting as well as completing additional metallurgical test-work in preparation for final pilot-plant operations.