High River drilling deep at Snow Lake gold bet

Having completed a $1.6-million private placement, High River Gold Mines (TSE) has begun 18,000 ft. of deep drilling on its Snow Lake gold property in northern Manitoba.

The new program, estimated to cost $830,000, consists of five deep holes which are designed to test for extensions of the Dick and Ruttan zones. Hole NA93-01, drilled in the Dick zone in February, intersected 0.304 oz. gold per ton over 33 ft. and included abundant visible gold (T.N.M., May 10/93). The 438-hectare property covers the old Nor-Acme mine which produced 620,000 oz. gold from 1949 to 1958. In the late 1980s, Inco Gold spent more than $6 million on underground exploration and delineated 4.2 million tons grading 0.19 oz. gold per ton in five zones: Dick, Ruttan, Upper Toots, Lower Toots and Hogg. Work by Inco confirmed the continuity of the mineralization and indicated the zones were open at depth.

A feasibility study by Inco envisioned a 450,000-ton-per-year operation which would produce about 68,000 oz. gold annually at an estimated cash cost of US$250 per oz. No production decision was made and Inco Gold’s interest was transferred to TVX Gold (TSE) when the two companies merged in 1990. TVX holds a 33% equity interest in High River.

Under the recent financing, TVX maintains its interest by exercising its option to acquire 408,497 High River shares at $1.02 each and 166,667 shares at $1.25. TVX also acquired 575,164 warrants redeemable at $1.25 to $1.30 each. In addition to the TVX purchase, a numbered Ontario company acquired 816,933 High River shares at 81.6 cents and 333,333 shares at $1 each. The numbered company also received 1.1 million common share warrants exercisable at $1.25 to $1.30 each for two years.

High River President David Mosher told The Northern Miner that he feels this program has the potential to increase the reserves significantly. He also noted that the presence of visible gold in some of the deeper holes suggests that the gold grade might also be improving with depth.

Inco Exploration & Technical Services has been contracted to supervise the program, which is expected to last five months.