Farley Lake partners firm up deep zone

Drilling at the Farley Lake gold deposit in northwestern Manitoba has confirmed earlier grade estimates in the Southeast zone.

Partners Granduc Mining (TSE) and Black Hawk Mining (TSE) are investigating the feasibility of mining the zone, which was discovered during the original exploration of the deposit by Sherritt (TSE). The zone lies beyond the limits of the East zone pit but might be minable with a deeper pit.

Drill holes in the zone cut mineralization grading 3-17 grams gold per tonne over core lengths of 2-21.5 metres. The best intersection was 13.3 metres grading 9.5 grams. Gold grades in the planned pit, where reserves stand at 1.45 million tonnes, average 3.9 grams.

The South and Southeast zones, which are not included in the pit’s design, have a preliminary resource of 1.4 million tonnes grading 3.2 grams.

In financial news, Black Hawk announced a financing of 14.3 million special warrants, at 70 cents per warrant, for proceeds of $10 million. The special warrants are exercisable for one Black Hawk share and half a purchase warrant. Each full purchase warrant allows the holder to buy one share at 80 cents for two years from the closing date.

Black Hawk will use $7-7.5 million of the financing, as well as its own convertible debentures, to finance its merger with Granduc.

Black Hawk reported a loss of $1 million (or 2 cents per share) on revenue of $7.5 million for 1995, compared with $96,370 on $4.7 million in 1994.