Gunsteel aims for 100 tpd at its B.C. gold project

Despite its name the Nugget Vein at Gunsteel Resources’ gold property seven miles southeast of here contains little or no visible gold. So it’s safe to assume the vein was named by someone who thought it would contain gold in nugget form. The reason for this probably relates to the fact the vein averaged 0.56 oz gold over its 57,500-ton production history — well above the industry average today. Gunsteel has mounted one of the most ambitious programs in the Sheep Creek mining camp which incidentally ranks sixth in the province in terms of gross gold production — 727,000 oz from 1.7 million tons of ore. Vein systems in the camp are generally narrow which is probably why most majors have tended to shy away from the area.

But for small operators these type deposits represent a realizable source of cash flow and a chance to expand production incrementally to more economic levels as funds become available.That’s one fact that Gunsteel management understands and is aiming for a 75- 100-ton-per-day mill rate which, at 0.5 oz or better, would represent a significant amount of gold production. It would probably take 75,000- 100,000 tons of reserves to justify a production decision and this could easily be blocked out this year.

Gunsteel will be spending $350,000 on its Nugget mine property in the 1986 tax year which for flow-through funded programs ends in late February. And should all its warrants be exercised as expected the company stands to raise another $700,000 in mid- January which should carry the program through the upcoming calendar year. According to Stan A. Endersby, president, the Nugget vein system will be the prime target although several others exist including the Calhoun vein which also has considerable potential, will also be checked.

Each of these veins was mined previously but there is still great potential on the down dip, he states, noting that Gunsteel’s present effort is being directed towards defining reserves to depth. Drifting is now under way on the No 4 level and a diamond drill is testing for extensions from a sub-level some 200 ft below that horizon.

Historical mine widths were as low as three feet and grades were often higher over narrow widths; but conversely they were sometimes better across wider widths, the Reno vein being a classic example. This was one of the larger, more productive veins in the region and it averaged 0.56 oz gold for 261,500 tons of production. Typically, the vertical continuity of the veins was greater than it was laterally.

At the time of our visit the exploration heading on the No 4 vein was in ore grade material and sample results from the first two drift rounds included 4.1 ft of 0.36 oz gold and 4.2 ft of 0.41 oz. These results are from atomic absorption analysis and are subject to confirmation by conventional fire assay techniques. This zone is the down- dip extension of an ore zone on the No 3 level where 0.38 oz gold was reported across 2.8 ft for a length of 290 ft. In addition, the company is drifting on the adjacent Nugget vein which “appears to be coming into ore grade material,” he says.

At least 20 veins are known to exist on the property but the Reno, Nugget and Motherlode were the most prolific. Up to 427,000 tons of ore containing 230,000 oz gold was produced from these veins prior to 1941 or about 32% of the recorded gold output in the Sheep Creek camp.

Rightly so, the company feels the possibility of locating another one of these good tonnage, high grade, vein deposits is excellent; but it recognizes the development intensive nature of exploration and mining in this type geological environment which can be expensive. Thus adequate financing will be an ongoing priority.

Gold-quartz veins with minor sulphides occur in northeasterly- trending faults where they intersect certain stratigraphic units near the crest of a we stern anticline and the western limb of an eastern anticline. The gold is very fine and would likely come out in a flotation concentrate followed by conventional cyanidation.

There is some highly siliceous flux material on the property that has been sold to Cominco’s Trail smelter over the years. And about half (10,000 tons) of the total has been shipped since 1975, says Mr Endersby. The silica credit generally offsets the smelter charges and the company is paid for 93% of the gold content in the flux. For lower grade material, he says this method is more competitive than milling. The Trail smelter is about 35 miles away, two-thirds of it on paved road, and it’s likely that Cominco will continue to provide this service because so many small operators in the region depend on it.

Proven and probable reserves are estimated to be around 21,400 tons grading 0.37 oz and there are 23,000 tons at a similar grade in the possible category. These reserves are readily mineable, the company notes. Additional reserves are available in the higher categories but access is difficult and the economics aren’t quite as good.

There is good infrastructure in the area and miners who are experienced in narrow vein systems which will be important should the operation produce on a sustained basis. Gold values are erratic, which is quite typical for a vein type system, and visual control is generally poor. Thinking small is often difficult for mining people but the Nugget mine potential certainly falls into this category at the moment.