First-phase work at Favourable Lake gets under way

First phase of a $7.8-million underground development program at the joint-venture Favourable Lake gold-silver project in northwestern Ontario, north of Red Lake, is under way.

Partners in the venture are Zahavy Mines and Getty Resources, although under an agreement between the two companies, Zahavy is purchasing Getty’s 50% interest for $3.6 million. The deal is to close July 10.

Awarded the first-phase contruction contract, which is valued at $2.8 million, was Thyssen Mining Construction of Canada.

The over-all program includes extensive underground drilling, raising, drifting and bulk sampling, with the aim of preparing the property for a production decision by early 1988.

The company reports drill- indicated and drill-inferred reserves to date of approximately 960,000 tons with an average in-place grade of 0.26 oz gold per ton and 4.81 oz silver.

It is hoped the underground work will extend total reserves to 2 million tons, Zahavy’s A. J. Lewis told The Northern Miner.