Vancouver — With the Kemess South open-pit copper-gold mine serving as a model,
The Kemess mine is 250 km north of Smithers at an elevation of 1,350 metres. The operation employs 319 people and enhances the economies of Smithers, Prince George and Mackenzie. The mine site is accessible by road from Mackenzie along Williston Lake, though it’s a designated supply-and-concentrate route for trucks only.
Last year, the Kemess mine produced a record amount of gold and copper — 282,300 oz. and 72.9 million lbs., respectively, an increase of 5,200 oz. and 6.6 million lbs. over 2001. Northgate will soon install a computer system in the mill to increase throughput and commission a new production drill in the open pit. As a result, the company anticipates gold production to increase to 294,000 oz. in 2003.
At the end of 2001, Kemess South had a proven reserve of 132.5 million tonnes averaging 0.704 gram gold and 0.233% copper, plus an indicated resource of 56 million tonnes grading 0.39 gram gold and 0.161% copper. The estimates were based on gold and copper prices of US$325 per oz. and US95 per lb.
Meanwhile, Northgate is advancing its Kemess North project, 7 km north of Kemess South, to the prefeasibility stage.
Last year, the company confirmed the continuity of the Kemess North deposit, which hosts a resource of 442 million tonnes grading 0.4 gram gold per tonne and 0.23% copper. The calculation is based on a gold-equivalent cutoff grade of 0.6 gram gold per tonne and on gold and copper prices of US$325 per oz. and US90 per lb., respectively. The deposit hosts a higher-grade core of 170 million tonnes averaging 0.5 gram gold and 0.29% copper, based on a cutoff grade of 0.6 gram gold.
In addition, drill results at the Nugget zone, 1 km west of the proposed Kemess North open pit, returned intersections of gold-copper mineralization up to 159 metres thick over 300 metres of strike length. The best intersection cut 115.6 metres grading 0.45 gram gold per tonne and 0.19% copper. The Nugget zone remains open in all directions.
Owing to structural similarities among the Nugget zone, Kemess North and Kemess South, Northgate believes these deposits are all part of one continuous porphyry system. This interpretation has revealed new targets for Northgate’s 2003 exploration program.
In 2002, Northgate moved 25 km northwest of the Kemess South mine to the 44-sq.-km Brenda property and drilled four holes in a 1,650-metre program. Using geologic data developed during the exploration and delineation of the Kemess North deposit, geologists targeted geophysical and geochemical anomalies at lower elevations with the goal of intersecting mineralization below the Toodoggone volcanic rocks. As a result, the company discovered a gold-bearing porphyry system with alteration comparable to that of Kemess North. At Kemess North, mineralization is hosted by Takla volcanic rocks and monzonite intrusive rocks.
All the holes intersected mineralized zones that host gold and copper associated with potassic and magnetite-silica altered Takla volcanic rocks. These rocks are adjacent to monzonite sills and hydrothermal breccia zones. Highlights of some of the assay results are as follows:
n Hole 1 intersected several intervals, including a 14.2-metre section that averaged 0.43 gram gold and 0.08% copper starting at a down-hole depth of 106.8 metres.
n Hole 2 cut two intervals, the first of which averaged 0.34 gram gold and 0.004% copper over 22.9 metres starting at 227.9 metres down-hole, while the second returned 0.42 gram gold and 0.03% copper starting at 296 metres down-hole.
n Hole 3 cut 25.5 metres averaging 0.13 gram gold and 0.05% copper starting at 230 metres down-hole.
n Hole 4 cut 9.6 metres averaging 0.41 gram gold and 0.24% copper starting at 352 metres down-hole.
Northgate is exploring the property under the terms of an option and joint-venture agreement with
Northgate is also exploring the Praxis property, 22 km southwest of the town of Stewart. The property is optioned by Northgate from privately owned Praxis Goldfields; Northgate stands to earn a 51% interest in the properties by incurring exploration expenditures of $3.3 million over four years.
VMS mineralization
The property hosts several airborne and surface geophysical targets with coincident geochemical signatures that may host stacked volcanogenic massive-sulphide (VMS) mineralization.
Last year, Northgate drill-tested the Section Ridge area of the claim. A total of five holes (1,950 metres) tested the prospect and returned generally uneconomic assay results that were indicative of a distal VMS environment with anomalous copper-lead values. The only economic intersection cut 13.8 grams silver per tonne, 0.27 gram gold, 0.67% lead and 0.39% zinc over a 1-metre section. Northgate is still evaluating the results.
Over the past year, the company re-examined the Toodoggone region using more advanced remote-sensing technologies such as hyper-spectral imaging from airborne and satellite-based systems. Several targets have been identified for follow-up this year.
The company staked 84.25 sq. km of ground in three properties, KG, Croy and Zika, all of which are south of its Kemess operations. Kemess says these claims will be subjected to geochemical surveys this year.
Meanwhile, at the Sustut project, 40 km south of the Kemess mine, Northgate and its partners,
The Southeast zone has a resource of 5.3 million tonnes grading 1.87% copper, based on a cutoff grade of 0.7% copper. Of this amount, 3.6 million tonnes grading 1.88% copper are classified as measured, 1.5 million tonnes averaging 1.88% copper are indicated, and 121,000 tonnes grading 1.78% copper are inferred.
The Southwest zone contains 2.7 million tonnes grading 1.32% copper. Of this amount, 1.26 million tonnes grading 1.38% copper are measured, 1.26 million tonnes grading 1.28% copper are indicated, and 179,000 tonnes averaging 1.2% copper are inferred.
The study gives the project 21% more minable copper (25% at a cutoff grade of 0.65% copper) than the previous (2002) estimate, which used only the results from the Southeast zone.
The terrain around the project is rugged and mountainous, and it is accessible by helicopter from Northgate’s Kemess mine. However, the partners plan to construct a road that connects with the Omineca access road (which links up with the Kemess mine).
Early last year, Doublestar entered into an agreement with Northgate and Procon that paved the way for a $300,000 feasibility study. The study is due for completion in March. Plans call for Procon to conduct mining operations and for Northgate to treat the ore at its Kemess mine. Doublestar and Northgate would share equally in the profit attributable to the project.
Acid-consuming
The Sustut material would increase Kemess’s copper production by 40%, as well as increase the grade of the concentrate, improve the quality of tailings, and reduce the amount of steel required in the semi-autogenous mills. The material is acid-consuming and appears not to leach metals into the environment.
Initial scoping studies point to a capital cost in the range of $12-14 million. Based on a copper price of US90 per lb., the project’s internal rate of return would be 69%.
A tabular volcanic “red bed” deposit, Sustut was first discovered by
ade of 0.4% copper. In 2000, Doublestar acquired 13 mineral projects, including Sustut, from Falconbridge in return for $500,000 and 1.5 million shares plus 500,000 warrants. Sustut is wholly owned by Doublestar and subject to a 50.1% back-in right held by Falco.
Another company active in the Toodoggone region is
Stealth stands to earn up to 100% of the property, subject to a 3% NSR, of which 1% can be purchased for $2 million. To earn a 60% interest, it must spend $5 million on exploration and pay $715,000 in cash to privately owned Electrum Resource by the end of November 2004. At the end of 2002, all payments had been made, and $2.3 million remained to be spent on exploration. Once vested, Stealth can issue 15% of its issued shares to Electrum to acquire the remaining 40% interest, or enter into a 60-40 joint venture with Electrum on a pro rata basis.
Under-explored
Stealth Minerals says the Toodoggone region, though rich in mineral showings, remains relatively under-explored. For example, the Toodoggone project hosts 30 separate mineralized prospects. Three deposit types are being targeted; skarn, epithermal and porphyry.
Subject to financing, Stealth hopes to spend a total of $3.2 million on the Toodoggone property in 2003.
The most advanced porphyry gold-copper deposit on the property is the Pine deposit. It is 25 km northeast of the Kemess South mine and has been subjected to 47 drill holes (7,889 metres). These holes were drilled between 1979 and 1999 by Rio Tinto (12 holes), Romulus Resources (13 holes), and Stealth (22 holes). The mineralized zone hosts about 160 million tonnes averaging 0.5 gram gold and 0.2% copper per tonne. In 2003, Stealth plans to drill six holes to test an induced-polarization (IP) anomaly east of the previous drilling.
In the previous season, Stealth explored four targets;
n Wrich Hill, a structurally controlled epithermal gold-silver prospect;
n Goat Mountain, which hosts several high-grade gold-silver polymetallic veins;
n the VIP copper-gold-silver skarn prospect; and
n the Mex gold-copper porphyry prospect.
The Wrich Hill prospect lies in the southern portion of the Toodoggone property, 14 km north of the Kemess South mine. Stealth geologists believe the Wrich Hill prospect is underlain by Toodoggone Formation crystal tuff just west of the regional Wrich fault. Kaolinite, pyrophyllite and iron-oxide surface alteration outline the prospect, which measures 200 by 850 metres.
Trenching
Trenching on a portion of the prospect revealed two steeply dipping sub-parallel mineralized zones close to the fault. Both zones remain open along strike to the northwest and southeast. The combined grade from four trenches in the West zone averages 1.36 grams gold and 9.87 grams silver per tonne over a true thickness of 28.5 metres. The combined grade from four trenches dug in the East zone, sub-parallel to the West zone, is 0.7 gram gold and 14.1 grams silver over an average true thickness of 18 metres. Both zones appear to be continuous in all of the trenches. Last year, a geophysical survey over the prospect defined a 200-metre-wide coincident chargeability and resistivity anomaly. Stealth plans to carry out a $900,000 exploration program, which would include drilling, prospecting and more geophysics.
The Goat Mountain prospect is 1 km west of Wrich Hill and hosts several outcropping sub-parallel epithermal-style quartz carbonate polymetallic veins and breccias. The southernmost vein, dubbed Black, has been traced on the surface for 300 metres and has produced the highest assays to date. A 40-cm chip sample returned 272.4 grams silver and 279.9 grams gold.
Stealth intends to spend $100,000 mapping and prospecting the prospect in the belief that the Goat vein mineralization and the Wrich Hill epithermal gold-silver prospects are spatially associated to a common, centrally situated mineralized porphyry that lies near the Takla sediment-Toodoggone volcanic contact and the Wrich fault.
The Wrich fault continues at least 7 km to the northwest, to the company’s Electrum epithermal gold-silver prospect, where diamond drill results include 4.7 metres averaging 2.95 grams gold, 263.42 grams silver and 2.4 metres grading 4.9 grams gold and 459.62 grams silver per tonne. This fault zone is a prime target for epithermal gold-silver occurrences, as well as porphyry targets.
The VIP prospect is 10 km southwest of the Pine deposit and 20 km Northwest of the Kemess South mine. Mineralization occurs in skarns within marbles that were altered by the Blake Lake granodiorite intrusion.
A previous operator, in 1983, drilled seven holes. The best hole cut 3.43 grams gold, 5.77 grams silver and 1.36% copper over 3.05 metres.
Last year, Stealth performed IP and ground magnetic geophysical surveys, as well as geological mapping and prospecting over a 4.9-sq.-km grid. Data indicate that a continuous anomaly may exist between the East Skarn and the West skarn area, a distance of 1.9 km.
Mechanical trenching in the West Skarn area identified two zones of mineralization. The first assayed 0.1% copper, 2.6 grams silver and 0.83 gram gold over 6 metres, while the second returned 0.33% copper, 13.4 grams silver and 3.2 grams gold over 18 metres. Trenching in the East Skarn area of the prospect, 1.2 km east of the West Skarn trench, assayed 1.4% copper, 32.6 grams silver and 5.8 grams gold over 6 metres.
In addition, the company discovered a new prospect it has dubbed the North Skarn, 700 metres northwest of the East Skarn zone. A trench in this area assayed 1.16% copper, 52 grams silver and 3.6 grams gold over 6 metres.
Stealth reports that the North, West and East skarn zones exhibit favourable geology and that each represents drill targets. The company also believes that these zones may be part of a much larger, underlying intrusive system.
New showing
Prospecting 2.5 km west of the West Skarn, on open ground, identified a new showing where a grab sample returned 2.3% copper, 94.4 grams silver and 2.7 grams gold per tonne. As a result, crews staked a 10-km area around the showing. Alteration in this new area is described as more porphyritic. In addition the company’s chargeability anomaly increases in the direction of this new discovery. Stealth intends to extend its grid to cover this new target in order to map and run geophysical surveys over the prospect.
The Mex gold-copper porphyry prospect is 22 km northeast of the Kemess South mine. Mineralization occurs near the contact between an intrusion and the Toodoggone volcanics and is characterized by a zone of intense hydrothermal alteration that measures 1 km wide and 300 metres down-slope. Cominco identified the prospect in the late 1980s with rock and soil samples that assayed up to 3.6 grams gold and 0.6% copper. The major did not follow up on the results. Last year, Stealth conducted geophysical surveys over the prospect, as well as mapping and sampling. Results warrant drilling, and the company plans to spend $400,000 on an 8-hole program.
Meanwhile, junior
The Pil North area is 25 km north of the Kemess mine. Last year, the company identified seven major coincident geochemical, geological and geophysical anomalous zones. The best two zones are East and Milky Creek.
The East zone is characterized by an IP chargeability anomaly associated with altered and leached monzonite and diorite. Soil geochemistry is highly anomalous in silver and gold with erratic copper and zinc values. Along the margin of the target, float samples from quartz stockworked diorite returned assays of 4.63 grams gold and 1.24 grams gold. Chip samples from the same area assayed up to 0.61 gram gold, 21.2 grams silver, 2.75% lead and 2.14% zinc over 1.1 metres.
The Milky Creek zone hosts extensive alteration that ranges from propylitic to intense phyllic to are
as of potassium feldspar that may or may not contain magnetite-quartz stockwork. Soil geochemistry is anomalous in silver and gold with erratic copper and zinc. Chip samples from the stockworked monzonite assayed up to 1.21 grams gold over 2 metres, with a 10-metre-long trench averaging 0.52 gram gold. A coincident IP chargeability anomaly is also present.
At the Pill South prospect, IP and magnetic geophysical surveys, combined with rock and soil sampling results, have outlined a gold-rich copper porphyry target over an area that measures 2.2 by 1 km. Soil values reach 0.11% copper and 0.8 gram gold. Trenching in anomalous areas exposed propylitic alteration silicification, quartz veining and stockwork, as well as shearing. Chip samples from this area returned values of up to 0.38% copper, 13.2 grams silver and 0.032 gram molybdenum over 5 metres.
At the Atty Gossan, IP and magnetic geophysical surveys as well as geological mapping and soil sampling have outlined another gold-rich copper porphyry target that measures 1 by 1.5 km. Soil samples reached values as high as 0.1% copper and 1.11 grams gold. Mapping has outlined a leached gossan and a large propylitic alteration zone in basalt associated with syenite and monzonite dykes. Assays from grab samples in prominent northwest trending structural zones have assayed up to 25.7 grams gold and 0.63 gram silver.
William’s property
The T-Bill prospect covers a 3-sq.-km area of carbonate alteration that hosts highly anomalous gold-arsenic soil geochemistry, as well as a gold-bearing quartz-sulphide vein system.
The second prospect, known as Northern and situated 3 km to the north, covers an under-explored gold-and-copper-in-soil geochemical anomaly. It measures 500 by 900 metres and is centred on a prominent gossan.
The two prospects were discovered independently in the 1980s by majors conducting regional stream-sediment-sampling programs. Fifteen drill holes were completed on the T-Bill. The best intersections returned 35 grams gold over 2 metres, 11 grams gold over 4 metres, 24.7 grams gold over 1.5 metres, and 24.8 grams over 2 metres.
Rimfire is earning a 100% interest in the William’s project from an underlying vendor in return for $32,500 in cash and 75,000 shares payable by Dec. 31, 2004. The vendor retains a 1.25% net smelter return royalty.
The T-Bill prospect is underlain by altered metavolcanic rocks that host gold-bearing quartz-arsenopyrite veins. The alteration is confined to the core of a northeasterly trending structural dome and controlled by foliation and steep crosscutting structures. A previous drilling campaign cut numerous gold-bearing intervals but failed to identify mineralizing controls. The earlier work concentrated on high-grade veins; however, drilling also identified broad lower-grade mineralization. Hole 84-2 cut 84 metres averaging 1.13 grams gold per tonne.
The Northern prospect, formerly known as Park, is outlined by a 500-by-900-metre open-ended gold-copper-plus-arsenic-in-soil geochemical anomaly. Prospecting in the area recovered samples that assayed as high as 3.59 grams gold.
Last year, Stikine Gold ran a three-dimensional IP survey over the T-Bill prospect. The survey defined a large chargeability anomaly measuring 400 by 300 metres just north of the area tested by the previous drilling. This anomaly is also coincident with a broad, 700-by-1,000-metre resistivity anomaly. Stikine plans to drill-test the target in June.
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