High grades add to Edwards’ potential

High-grade gold is always a boon to a producing mine, as appears to be the case for VenCan Gold (VCG-M), which owns the Edwards gold mine near Wawa, Ont.

The underground mine is operated by River Gold Mines (RIV-T) under a formal lease agreement for a 50% share of net profits. Recent underground mine development has yielded some spectacular numbers while testing the Carbonate, Porphyry and Shaynee zones below the 100-metre level. The mine is accessible by a ramp, which has now been driven to the 150-metre level.

The Carbonate zone was reached at the 147-metre level with a northbound crosscut, which encountered two wide, mineralized sections split by small section of host rock.

Chip sampling along the western wall of the crosscut returned an uncut, weighted average grade of 102.58 grams gold per tonne (2.99 oz. per ton) across the total zone width of 5.65 metres (18.53 ft.).

Chip sampling along the eastern wall of the crosscut returned an equally impressive, uncut weighted average grade of 84.53 grams (2.46 oz.) across the total zone width of 5.4 metres (17.7 ft.). Meanwhile, a slash into the northeastern wall’s mineralized section returned an uncut, weighted average grade of 78.73 grams (2.29 oz.) across the section’s width of 2.7 metres (8.86 ft.).

The Porphyry zone was intersected by the ramp at the 127-metre level. Four rounds of drifting into the zone returned an uncut, weighted average sample grade of 31.75 grams (0.92 oz.) gold across an average width of 2.03 metres (6.66 ft.) along the total sill drift length of 9.64 metres (31.8 ft.).

VenCan says these “extremely encouraging” underground discoveries verify the results of the 1997 underground drill program.

Last year’s drilling into the Carbonate zone (below the 100-metre level) yielded 14 intersections in the assumed plunge of the oreshoot, averaging an uncut grade of 49.37 grams (1.44 oz.) across an average width of 1.79 metres (5.9 ft.).

Drilling at the Porphyry zone (again below the 100-metre level) yielded 21 intersections in the assumed plunge of the oreshoot, averaging an uncut grade of 32.05 grams (0.93 oz.) across an average width of 1.41 metres (5.63 ft.). And 1997 drilling of the Shaynee zone (also below the 100-metre level) yielded eight intersections averaging an uncut grade of 32.08 grams (0.93 oz.) across an average width of 0.66 metre (2.2 ft.).

Despite the good news from the exploration front, VenCan is disputing River Gold’s account of the operating performance at Edwards. During its first year of production in 1997, Edwards turned out 30,412 oz. gold from 62,963 tonnes milled, for an average grade of 15.02 grams (0.44 oz.).

In late July, River reported total revenues of $13.4 million and a net loss of $379,769 for the period from Dec. 31, 1997, through March 15, 1998.

VenCan says its auditors have completed a preliminary analysis of River’s accounting. Based on this report, VenCan believes the Edwards mine generated “a minimum total profit of $1.4 million” for the period, rather than the loss reported by River Gold. The company says it is continuing its due diligence on this matter.