Gallactic boosts stake in Panorama Resources

It’s been a busy week for Galactic Resources (TSE). The company closed a series of related transactions valued at $39,375,000(US) with Homestake Mining, and more recently increased its stake in Panorama Resources (VSE) to 21.3% of the issued shares of the company. Galactic said it plans to increase this to a controlling position, enabling it to nominate four of the seven members of Panorama’s board.

Central to all this deal-making are a number of US properties, including the Spanish Mine Property in California, in which Panorama Resources then held a 60% interest.

The deal with Homestake gave Galactic an option to acquire Homestake’s residual 40% interest in the Spanish Mine gold property, along with the outright acquisition of 50% of Homestake’s interest in the Bodie Mine property in California (which may later be increased to 100%). Galactic President Robert Friedland said the Bodie project is being viewed as a 10,000 to 20,000- tpd conventional milling operation. A $4.5 million (US) feasibility program has already been initiated by Galactic, he told The Northern Miner, along with a full-scale environmental review leading to an environmental impact statement.

The transactions result in Homestake having acquired an initial position in Galactic of 2.5 million common shares.

Galactic then made an agreement to sell the 40% Spanish Mine residual interest to Cedar Resources, a wholly-owned subsidiary of Panorama, in exchange for one million common shares of Panorama. After all approvals, this will result in Cedar acquiring 100% of the Spanish Mine property now viewed as a potential heap leach or a carbon-in- leach mill operation.

Panorama’s other asset is its interest in the Platoro Mine property located five miles south of Galactic’s producing Summitville mine in Colorado, where it can earn up to a 60% interest from Union Mines (the US division of Union Miniere) by spending $8 million (US). Friedland said this project is viewed as an underground operation which would have a conventional cyanide mill. Panorama intends to begin full scale feasibility studies on both projects in the fourth quarter of 1988.

The 2000-acre Spanish Mine property near Grass Valley, California, was mined in the past at three separate locations within a steeply dipping zone along a strike of more than 3,500 ft and over a vertical interval of 1,000 ft to 1,500 ft.

Galactic reports that the current reserve estimate for the Upper Spanish Mine ore zone is about 5.3 million tons grading 0.065 oz gold per ton, and the company describes the zone as over 2,000 ft long, 100 ft wide and extending to a depth of at least 800 ft. The zone is also reported to contain a high-grade core 20-40 ft wide grading between 0.15 and 0.25 oz with highs of over 0.65 oz.

Galactic said the calculated resources are in the oxidized, upper 200-to-300 ft portion of the zone, with the reserve open to expansion in other zones along strike and depth. Metallurgical testing indicates recoveries in the range of 75-85% at -1/4 inch size, the company notes.

The 19,480-acre, accessible Platoro Mine property consists of about three miles of underground workings that explore the Mammoth Revenue vein for 3,500 ft along strike and more than 600 ft in depth. Galactic said underground channel sampling of the Mammoth Revenue vein, which has a strike length of 5 miles, has consistently provided a grade higher than that indicated by diamond drill holes. Due to the friable and erratically vuggy nature of the vein, core recovery varied from 50-80%.

Panorama is the operator of the project and reports about 522,000 tons of proven and probable ore at an average grade of 0.186 oz gold and 5.0 oz silver, established by both drilling and underground exploration. Another 2.6 million tons of mineral inventory has been indicated by drilling and geologic investigation, Galactic said, including 1.5 million tons of 0.197 oz gold and 5.1 oz silver with the zone of mineralization in the vein open to the north, south and at depth.

According to Victor Hollister, P.Eng., chief geological consultant to Galactic, an additional 1.5 million tons may be found and developed on several other structures on the property — the Merrimac and Forest King veins — in addition to the Mammoth Revenue vein, for a total of over four million tons.

“We think this project has potential for twenty years of reserves and we’re interested in it for that reason,” Friedland said. “It will generate long-term employment in the Summitville area which the present Summitville open pit will not do, because we will be mining out in three to five ye ars.”

Initial metallurgical testing found recoveries of 75-90% for silver and from 85-95% of the gold with gravity-flotation of the ore. More testing is planned, Galactic said.