Kinross drills George Lake

Impressed by drill results from the George Lake property in Nunavut, Kinross Gold (K-T) has decided to extend the program by 9,000 metres.

Kinross can earn a 70% interest in the property from Wheaton River Minerals (WRM-T) by spending $20 million over four years. So far, $3 million has been spent, chiefly in an attempt to size up the Goose Lake deposit, the second-largest of six known deposits.

Kinross’s 2000 drill campaign, which totalled 11,000 metres, was aimed at boosting Goose Lake’s known tonnage and grade. In 1997, the deposit was estimated to have an indicated and inferred resource of 2.6 million tonnes averaging 9.37 grams gold per tonne.

The best intersections of the past year were 13.3 metres grading 23.6 grams and 6.4 metres grading 29.6 grams. The former, at a vertical depth of 320 metres, is the deepest intersection to date and suggests that the Main and East zones continue down-plunge to the north.

Most of the gold at Goose Lake is contained in the West, Main and East zones, which are parallel, southeasterly striking, and spaced about 50 metres apart.

The 2001 campaign will be carried out in two stages — first at Goose Lake, and then at outlying targets to be tested during the summer.

In all, George Lake hosts about 6.5 million tonnes grading 9.76 grams gold, equivalent to 2 million contained ounces.

Meanwhile, Wheaton has mined the last tonne of ore from its 89%-owned seasonal Golden Bear mine in northwestern British Columbia. Operations in 2001 will be restricted to crushing and leaching a stockpile of 99,600 tonnes, which, combined with existing material on the pads, is expected to yield an additional 34,000 oz. of the yellow metal.

In 2000, Golden Bear cranked out a record 94,500 oz., contributing to Wheaton’s highest-ever earnings (T.N.M., Oct. 23/00). Since production began in 1997, the mine has repeatedly exceeded feasibility predictions.

In related news, Wheaton is assessing investment proposals from other companies for its $50 million in tax pools and cash resources.

“It’s very frustrating after all this time of doing what we set out to do, only to see our shares still trading for basically the [company’s] cash value,” says Chairman Ian McDonald. “But this doesn’t mean we would be abandoning our gold assets, or our ability to operate.”

McDonald says one possibility may be to break up the company and give shareholders a dividend. However, discussions with potential suitors are preliminary.

Wheaton’s other assets include the Bellavista heap-leach deposit in Costa Rica and the Red Mountain deposit in northern British Columbia. The former is the more advanced of the two, though development is being hindered by low gold prices and final public hearings. A feasibility study at Red Mountain is focusing on the viability of relocating the Golden Bear mill to process a high-grade core of 700,000 tonnes grading 12 grams gold over 4-5 years.

On Sept. 30, Wheaton had $21.4 million in cash or equivalents, working capital of $15.6 million and no long-term debt. The company has 52.7 million shares outstanding and traded between 33 and 72 over the past year. At presstime, the shares were valued at 36.