Esperanza drill program at Tillicum indicates bulk tonnage

A major drill program on the East Ridge zone at Esperanza Explorations’ (VSE) Tillicum Mountain gold property has added an important bulk tonnage dimension to the project. Until recently, reserves were confined to several small high grade zones which were sufficient to justify a 100-ton-per-day milling operation, something the company was planning t o install this year.

But those plans have been shelved indefinitely, The Northern Miner was told on a recent visit to the property. Indeed, Esperanza now feels the East Ridge and several smaller zones might eventually support a 500-ton-per-day milling operation.

The East Ridge zone has been traced for about 3,500 ft along strike and to a depth of 1,000 ft. Drill- indicated reserves currently stand at 400,000 tons grading 0.22 oz but Wayne Roberts, project manager, concludes the potential could be several million tons. (A 0.12 oz cut off and 5-foot mining width were used to establish that reserve estimate). When the Heino-Money zone is included, reserves total 459,000 tons averaging 0.32 oz gold.

The average width of the East Ridge is 7-8 ft but intercepts of 16 ft have been returned and “it’s still wide open,” he said. The existing reserve there has been drilled off on 100-ft centers and a recent 1,500- ft stepout (88-200) yielded 0.1 oz over 14 ft and extended the zone another 600 ft downdip, he noted, claiming it had profound tonnage implications for the property.

The strike length of the East Ridge has since been extended another 250 ft to the north by hole No 88-201 which averaged 0.12 oz over 8 ft. And a fill-in hole about 400 ft south of 88-200 returned 10 ft of 0.21 oz, demonstrating continuity between drill holes, he said. Roberts described East Ridge as a siliceous zone with sulphides and gold in a skarn assemblage where the gold is typically associated with lamprophyre dykes.

Arthur Fisher, a Vancouver mining consultant who also happens to be a director of Esperanza, said that just finding gold values in a hole like this is significant given the erratic nature of gold deposition. Fisher was formerly vice president mining at Total Energold which operates a narrow vein-type gold mine at Cassiar, B.C.

This year’s exploration program also included the Heino-Money zone and the Strebe but the majority of the work involved the East Ridge because of its bulk tonnage potential. A number of deep holes are planned to test this and several other zones at depth, Roberts emphasized.

The Heino-Money is a linear trend some 3,000 ft long which contains four known deposits and appears to join up with the East Ridge to the south, a hypothesis that will be tested by further drilling. A drift was put into the Heino- Money zone last year but it eventually was proven to be in the wrong place. It was also terminated before reaching its target because of a lack of funding. In any event, the drift could be utilized for haulage purposes at a later date, the company said.

Since 1981, approximately $8 million has been spent on the property and a budget of $2 million has been allocated for the last four months of 1988; expenditures for the year should total about $5 million.

An underground drifting program is under way in the East Ridge zone and initial results have revealed grades of 0.05 to 0.2 oz although Roberts cautioned they are “just getting into the zone.” The drift will be 800 ft long and several raises will be driven to test the vertical continuity of the zone and prove up reserves. No drilling is planned from here this year, he added.

Esperanza President John Brock said the program is being funded through a $2.5-million private placement with his flagship company, Welcome North Mines (VSE), a $1.2-million flow through issue with NIM and Company, and possibly another $1.2-million flow through deal which was still in the works at the time of our visit. The company has a working capital of $900,000 which will last until year end but Brock conceded he is “reluctant to dip into that if we can get some decent financing.” After the $1.2 million in flow through funds is used up Welcome North will have a 33% interest in Esperanza, he said.

At the 500-ton-per-day milling rate Esperanza is considering, reserves are sufficient for about three years of operation, something Fisher concede d “is pretty tight.” A flotation mill would probably be adequate rather than a cyanide plant. Noting that drilling has been “superbly successful,” Fisher expressed optimism that sufficient reserves would be found to push it over the top.

Esperanza owns the property but it is subject to a 3% net smelter return which is capped at $6 million. Brock emphasized that the next few months will be important and although the company has thus far resisted taking on a joint venture partner, he wouldn’t rule that out in the future.