Equinox to earn interest in massive sulphide project

An extensive metallurgical and underground evaluation program initiated by Equinox Resources (TSE) is now in progress on a polymetallic massive sulphide arsenical gold deposit located 32 km north of Revelstoke, B.C. The $1 million program is designed to develop a production flowsheet, and includes underground drilling, collection of a 300-ton underground bulk sample, and lab and pilot scale flotation and pressure oxidation tests.

In order to earn a 50% direct interest in the J&L property owned 100% by Pan American Minerals (VSE), and up to 2.7 million shares of Pan American (40% of the company), Equinox agreed to spend $5 million over a 5-year period on property exploration and development costs in addition to Pan American’s corporate and administrative costs. Equinox recently assumed day-to-day management of Pan American, however the agreement is still subject to that company’s shareholder approval which will be sought at an extraordinary general meeting in early January, 1989. The 18,250-acre property was worked from 1983-1988 by BP- Selco, Noranda and Pan-American at a cost of over $5 million. Reserves are stated as 3,371,000 tons of 0.17 oz gold, 1.73 oz silver, 2.15% lead and 4.04% zinc in the probable and possible category from work by BP-Selco, while Noranda’s more recent work established possible reserves of 11,438,000 tons of 0.20 oz gold, 2.01 oz silver, 2.56% lead and 4.48% zinc.

The over-all deposit is said to contain zones of significantly higher grade in certain metals, including extensive areas with gold values over 0.25 oz per ton, and others with combined lead-zinc values over 10%. However, it contains an average of 5% arsenic, and previous operators were reported to have shied away from problems in the extractive metallurgy of the deposit and from more expensive mine development (environmental work, tailings disposal, etc) in times of low metal prices. Ross Beaty, president, said Equinox is looking at the project “with completely different eyes,” and its recent review of metallurgical testwork by BP- Selco, Noranda and Pan American gives confidence that under the parameters of a smaller scale operation, economic recoveries can be achieved using conventional methods.

According to Equinox, mineralization has been traced at surface on the property over a 3,280 m strike length and in a continuous zone underground for 845 m. The tabular zone is described by the company as averaging 1.5 m wide and extending up to 10 m wide, “which appears to be very amenable to underground mining with good ground conditions and clear geological control over mineralization.”

The company presently has a 24% interest in the producing Buckhorn mine in Nevada operated by Cominco Resources. Its share of production for the quarter ended Sept 30, was 1,437 oz of gold and 8,526 oz of silver.