Exploration ’88 RAYROCK

Rayrock Yellowknife Resources will spend about $3.5 million on exploration this year. Most of the money will be used in a search for precious metals, including reserve definition drilling on the Costa Rican Bellavista project. Roughly one- quarter of the budgeted amount is earmarked for base metal exploration in Arizona and Chile. Including expenditures by joint-venture partners, the 1988 budget is $10 million. In Canada, Rayrock’s 62%-owned Discovery West Corp. has two joint- venture projects with Rea Gold Corp. The companies plan to spend $700,000 on the prospects, both of which are in northwestern Ontario. Drills are testing gold targets associated with siliceous alteration zones and geophysical anomalies.

Discovery also has numerous gold properties in the Northwest Territories and the Yukon, on which other companies are farming-in. The most advanced are the Colomac gold prospect and the La Forma gold mine, where Tally-Ho Exploration is driving a decline to probe under previous workings. Neptune Resources is considering developing a large-tonnage, open-pit operation at Colomac.

In the U.S., Rayrock will test for deep ore below and adjacent to the open-pit deposits at the Pinson and Dee mines in northern Nevada. Other targets on the properties, in which Rayrock has an interest, will be tested as well. In total, $1.86 million has been set aside for the Pinson/Dee program.

In northern Nevada, a “go” decision seems imminent (as we go to press) on the Marigold project. Current plans call for a dual conventional milling/heap leach operation. Reserves stand at 2.9 million tons grading 0.126 oz gold per ton (the milling material) and heap-leachable material of 6.9 million tons of 0.031 oz. Rayrock has a 20% interest in the project, which should produce about 60,000 oz per year.

Exploration in the western U.S. is conducted through a new Cordex syndicate, a 50/50 joint venture with Placer Dome. The Cordex group aims to spend $2.2 million this year.

Farther afield, Rayrock says a gold prospect in Costa Rica and a copper play in Chile will probably advance to feasibility this year. Late last year, Rayrock sold its interest in the two plays and another in Chile to Midland Energy Corp. in return for a 55% stake in Midland.

The Bellavista project in Costa Rica has drill-indicated reserves of 7.5 million tons averaging 0.07 oz gold per ton plus minor silver values. Additional drilling should increase confidence in the reserve figure and define portions grading 0.08 to 0.10 oz per ton, the company says. An open-pit and milling operation at 2,000 to 2,500 tons per day is envisaged.

At the Chilean Ivan property, crosscuts are being driven into the hangingwall on the 100-m level to drill down- dip on the copper sulphide deposit. This work should confirm the indicated reserves of 2.1 million tons grading 4.86% copper and 0.50 oz silver per ton. It should also reveal the possible depth extension of the mineralization. Rayrock considers it “highly probable” that 3.5 million tons can be blocked out eventually and that a 1,200-ton-per-day operation would make this a profitable mine. A feasibility study and drilling on other targets on the property should cost about $1.8 million.

Rayrock has 30 full-time exploration people. Offices are in Toronto, Ont.; Reno and Prescott, Nev.; San Jose, Costa Rica; Quito, Ecuador; and Santiago, Chile.