Eureka review funding alternatives

A number of funding alternatives are being reviewed by Eureka Resources to complete a previously scheduled work program on its Frasergold property 60 miles east of Williams Lake, B.C.

Jack O’Neill, president, says the 1987 work program, which was to include underground development, bulk sampling and test milling on site, was not completed because of the “inability of a funding partner to provide necessary financing under an agreement negotiated early in 1987.”

The partner, Southlands Mining, denies this assertion claiming “it was ready and able to fulfill its obligations under the option and joint venture agreement.” Southlands President Philip Yeandle confirms that “litigation is likely to ensue” over the issue which The Northern Miner gathers could tie up the property for an indefinite period.

A 20-hole reverse circulation drill program was completed this season, however, which Mr O’Neil says extended the strike length of the Jay zone from 650 ft to 2,600 ft. An initial review of the holes indicates an average grade of 0.067 oz gold over a width of 65 ft, he points out.

An enriched area in the southeastern extension of the Jay zone yielded 0.38 oz gold over an average width of 5.6 ft. He estimates the reserve potential at 20 million tons within the previously drill- tested 1-mile strike length.

Achieving consistent assay results has been a problem because of “the coarse, particulate nature of the gold at Frasergold,” he notes. But he says preliminary tests of 10 samples have indicated an increase in results by more than 50% over conventional fire assays. A company consultant says over-all results from the last series of seven holes this year were consistent with previously announced results of the first 13 holes drilled last year.