After gaining 61 in a single day to close at $2.04 on the trading of almost 2 million shares,
The junior has been in the spotlight following the recent discovery of a previously unrecognized style of bonanza gold mineralization in the footwall of the BC vein at its Cariboo property, near Wells in north-central British Columbia. On the street, speculation about a possible merger with a major began to spread.
Surveillance officers of the Canadian Venture Exchange (CDNX) did not give an explanation for the trading halt; nor did they say when trading might resume. However, in an interview with the Vancouver Sun, Wayside President Frank Callaghan indicated that trading was halted because the exchange wanted an explanation for the sharp increase in the stock price. He also said the exchange wanted independent verification of the company’s resource calculation of 1 million oz. in an open-pit target covering the Pinkerton, Sanders and Rainbow areas of the historic Cariboo Gold Quartz mine on the flank of Cow Mountain. Wayside has submitted a conceptual plan to the British Columbia Environment Assessment Office outlining the proposed development of a 3,000-tonne-per-day open-pit and underground mine.
Consulting geological engineer Shaun Dykes of Geologic Systems prepared the resource estimate for Wayside in January 1999, using a geologically controlled inverse-squared distance block model. Block sizes used measured 25 ft. wide by 25 ft. long by 10 ft. vertically. Based on the assay data from 374 drill holes, Dykes calculated an uncut resource of 11.1 million tons grading 0.098 oz., equivalent to 1.1 million oz. By cutting higher-grade assays to 0.5 oz., the resource was lowered to 10.2 million tons grading 0.068 oz., or 693,000 contained ounces.
In his report, Dykes acknowledges he was a shareholder of International Wayside at the time he prepared the estimate and that therefore “this report should be considered an internal company-produced report to be used in the further development and exploration of the Cariboo gold mine property.”
Callaghan told The Northern Miner that Wayside brought in an independent consultant in April to audit Dykes’ work at arm’s length. A report will be filed with the CDNX.
Callaghan, in a subsequent Sun interview, said the exchange “wanted to ensure there are independents taking care of protocol, and who they are.”
Wayside has retained Panterra Geoservices to devise a work program for its recent Bonanza Ledge discovery. The program is to include “a format for logging and sampling of drill core to ensure quality control and confirm the presence, location and grade of gold mineralization through petrography and re-sampling.”
The firm was hired after several mining analysts who had visited the project expressed concerns over sampling protocol and the general lack of security for core waiting to be logged. Especially worrisome was that select portions of mineralized intervals had been sent for whole-core analysis.
To maintain analytical integrity, Wayside has initiated new procedures for handling and storing core, including the construction of a fully secure core-handling facility. While Callaghan could not say when Wayside would resume trading, he did say: “We’re providing the exchange with as much paper as we can and they’re happy.”
The Cariboo project centres on the past-producing Cariboo Gold Quartz, Island Mountain and Mosquito Creek gold mines, all of which are within an 8-by-3-mile area. The Barkersville-Wells area is famed for the Cariboo gold rush of the 1860s and for lode mining that began in the 1930s. Historic production from the area is recorded as being 3.9 million oz., of which 2.6 million oz. came from placer mining.
Pyrite-dominant gold-bearing quartz veins form the bulk of material historically mined in the district, but gold was also found to occur in pyrite-type replacement bodies hosted by limestones. The pyrite bodies carried substantially higher grades than the quartz veins — above 0.6 oz. per ton.
Wayside’s new discovery occurs in the footwall of the BC vein. It is reported to be hosted by strongly foliated, tan-coloured micaceous mudstones and gritty quartzites carrying disseminated pyrite, with thin stringers or bands of pyritic, blue-gray silica and dolomite. The higher-grade gold appears to be associated with pyrite-enriched zones containing anywhere from 10% to 60% pyrite.
Wayside discovered this new zone while chasing the BC vein to the southeast of the BC shaft. To date, assay results have been reported for nine holes that tested the Bonanza Ledge discovery over a strike length of just 400 ft. The best hole was hole 10, which cut 84.7 ft. averaging 0.72 oz., including a 44.5-ft. interval averaging 1.25 oz., starting at a down-hole depth of 157.7 ft. Hole 11 undercut hole 10 and intersected 15.7 ft. of 0.13 oz., starting at 181.9 ft. down-hole.
The most recent holes to be released were 9 and 14, which cut broad intervals of lower-grade gold mineralization. Hole 9 stepped out 100 ft. to the northwest of hole 10 and undercut hole 8 (15.5 ft. grading 0.16 oz. and 18.7 ft. of 0.42 oz.) to intersect 31.7 ft. of 0.042 oz. Hole 14 was collared 300 ft. along strike to the southeast of hole 10 and undercut hole 13 to pull 89.2 ft. averaging 0.053 oz.
Assay results for holes 15, 16 and 17 are pending.
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