Expat drops Kudz Ze Kayah

Vancouver — A two-year effort to advance the Finlayson base metal project in the Yukon has come to an abrupt end as operator Expatriate Resources (EXR-V) failed to make the $1-million payment needed to secure the crucial Kudz Ze Kayah deposit.

Seeking to overcome metallurgical problems with its 60%-owned Wolverine base metal deposit, Expatriate inked a deal with Cominco in March 2000 to pick up the nearby Kudz Ze Kayah deposit.

Cominco subsequently merged with diversified miner Teck to form Teck Cominco (TEK-T). The junior’s idea was to consolidate the two deposits and blend the ores to make it acceptable for sale to smelters.

In May, the major zinc producer granted the junior a payment extension for its $10-million purchase of the deposit and surrounding ground.

According to the amended agreement, Expatriate had to make an initial $1-million payment by Sept. 5. In return for the extension, Expatriate agreed to pay Cominco $100,000 and interest on the $1 million from May 24 until the date of payment.

Since it announced the acquisition agreement, Expatriate has drill-tested a number of targets in the Kudz Ze Kayah area and advanced the permitting requirements for the overall project.

Late in 2000, a prefeasibility study indicated good economics for the joint development of the deposits, with the blending of ores yielding concentrates of acceptable quality.

Now that the agreement has been terminated, Expatriate will not hold any interest in the Kudz Ze Kayah ground. The company, however, intends to continue exploring for a new deposit in the area. Expatriate aims to blend the ore with the Wolverine deposit to reduce contaminant levels.

The Wolverine deposit contains a resource of 5.4 million tonnes grading 13.06% zinc, 1.59% lead and 1.43% copper, plus 1.76 grams gold and 378.1 grams silver per tonne.

Kudz Ze Kayah hosts an indicated resource of 11.3 million tonnes grading 5.9% zinc, 1.5% lead, 0.9% copper, 1.3 grams gold and 133 grams silver.

Discovered in 1993, the deposit is a gentle-to-flat-dipping, tabular, massive-sulphide body. Mineralogically, it shares many similarities with the Wolverine deposit, including a high selenium content.