Iskut River gold camp exploration mecca

Early this year it was announced that a number of mining companies working in the area had teamed up with the Canada/B.C. Mineral Development Agreement to fund a study to find the most economical and environmentally sound access road into the Iskut River area. If realized, this development will not only reduce costs dramatically for mining companies, but act as a much-needed catalyst for other regional development.

Although the mineral potential of northwestern British Columbia has been known since the turn of the century, the Iskut River camp came into prominence with the discovery of a high grade gold deposit on ground staked by Skyline Explorations (TSE) in 1980.

In August of 1988, Skyline officially opened its 100%-owned Johnny Mountain mine, an underground operation which produces two products: a gold dore bar and a copper concentrate containing gold and silver. But the transition from an exploration company to a producer proved to be a difficult one for Skyline and the company is now up for sale after having undergone a number of management and operational changes.

Mine capital costs were higher than expected, and gold production lower than anticipated in 1988 due primarily to milling and dilution problems. Total geological reserves were recently downgraded to 686,000 tons grading 0.57 oz gold per ton, uncut and undiluted. A cut-off grade of 0.3 oz was used which the company said was more consistent with its mining experience encountered to date.

After modifications to its milling process, which now entails just gravity and flotation circuits, the company feels it can sustain a milling rate of 300 tons per day with an average ore grade of 0.6 oz gold or better and gold recovery of more than 90% in 1989. The company’s monthly production goal is 5,000 oz at a cost of $230(US) per oz, however severe weather conditions in early 1989 have already resulted in production shortfalls for January and possibly February.

If the price was right, many believe Cominco Ltd. (TSE) would be a logical buyer for Skyline as the company is the operator of the adjacent Snip gold project where a formal feasibility study is nearing completion. Cominco and partner Prime Resources (VSE), which will have a 40% interest, anticipate developing the property and producing by the fourth quarter of 1989 at an initial rate of 300 tonnes per day. Capital costs have been estimated at about $54.9 million.

Based on work completed last August, Cominco has calculated reserves of 1,580,000 tons with a cut grade of 0.639 oz gold in the Twin zone of the Snip deposit, using a dilution factor of 25% and cutting all very high assays to 4.38 oz gold. There are also further reserves in parallel zones outside the Twin zone not accounted for by Cominco.

In the first year of operation, Prime Resources is anticipating that ore grade will be 0.860 oz gold, and operating costs will be $176.54 per tonne of ore milled. In the second year, following payback of capital costs, an added $1.6 million will allow the expansion of the mill to 500 tonnes per day, with operating costs then dropping to $153.23 at the enhanced rate.

The Iskut River area will also figure prominently in the 1989 exploration season for many other Prime Group companies. It has been estimated that Prime’s land position in northwestern British Columbia now exceeds 150,000 acres. Collectively, the companies are expected to spend $15 million on work programs under the direction of Prime’s exploration arm, Prime Explorations.

A number of companies have optioned properties staked by Skyline in the early eighties; among them Tungco Resources (VSE) which plans further work this season on its Waratah claims, Hector Resources (VSE), Tanker Oil and Gas (VSE), Inel Resources (VSE) and companies in the Prime group. Most of these projects are at the surface exploration stage.

Gulf International Minerals (VSE) continued work on its McLymont property in 1988, with work consisting of drilling on the Northwest and Camp mineral zones followed by rock, soil and silt sampling and geological mapping. Drill results from the Northwest zone, the highlight of the past two seasons’ work, include: 36.5 ft of 1.605 oz gold, 30 ft of 0.404 oz gold and 149.3 ft of 0.207 oz gold.

Meridor Resources (VSE), a Hughes-Lang group company, has started a third 10,000-ft drill program on its Iskut River property, concentrating on one of four zones of gold mineralization discovered in 1988. Selected results from the zone include: 22.6 ft grading 0.337 oz gold, 1.02 oz silver, 0.27% copper and 4.6 ft of 0.511 oz gold, 0.92 oz silver, 0.45% copper and 0.41% zinc. The company also discovered a large porphyry-type gold/copper/ molybdenum zone in the south- central portion of the property and further drilling is planned to test its base metal potential.

Prime Resources, Golden Band Resources (VSE) and American Ore (ASE) are reported to have intersected significant gold-bearing mineralization on a structure which appears to trend from the adjacent Meridor property. Results from the 88 program include: 19.4 ft of 0.311 oz gold, including 12.5 ft of 0.446 oz, 15 ft of 0.920 oz gold, and 20.3 ft of 0.323 oz gold.

Whirlwind Resources (VSE) has an option to earn a 55% working interest in a claim block in the area believed to have potential for a porphyry copper-gold system. The company says geochemical work by a previous operator indicated a large zone displaying anomalous gold and copper values.

According to Dan Alldrick, a project geologist for the B.C. Ministry of Energy, Mines and Petroleum Resources, almost all original discoveries to date in the Iskut River area have resulted from prospecting programs, although follow- up rock geochemistry surveys has identified additional mineral zones nearby and I.P. surveys have been successful in identifying high- sulphide areas with large alteration zones. Regionally, Alldrick said the Iskut River camp stands out as a strong geochemical anomaly in gold and silver associated with its “pathfinder” elements of lead, zinc, copper and cobalt.

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