Lenora downgrades Box and Athona

Greater Lenora Resources (TSE) has downgraded the reserve figures for its Goldfields project on the northern shore of Lake Athabaska in Saskatchewan.

Published minable reserves for the project, which included the Box and Athona gold deposits, had been pegged at 16.6 million tonnes grading 1.7 grams gold per tonne, for a total of 890,000 oz. The geological resource had been calculated at 22.4 million tonnes grading 1.8 grams.

The company has described the new figure as a “resource” — less restrictive than a “reserve” — and sets it at a proven and probable 7.2 million tonnes grading 1.85 grams per tonne, plus a possible 8 million tonnes with a grade of 1.4 grams per tonne. The new figures are based on a cutoff grade of 0.5 gram per tonne.

The figure was downgraded after Greater Lenora management, led by Michael Werner (who had been appointed president in February), decided to delay efforts to finance the project until the reserve figures could be reviewed.

Management retained specialist consultants Behre Dolbear to conduct the review; the firm was also retained to assist merchant banker Rothschild Denver with due diligence investigations for project financing.

Behre Dolbear’s review raised concerns that the earlier calculations had underestimated the erratic distribution of gold at the two deposits, and that the high-grade zones in the deposits were too discontinuous to be mined selectively. The firm’s opinion was that the 25-metre drill hole spacing that had been used to calculate the reserves was too wide to provide a reliable estimate of grade and tonnage. It recommended a 15-metre drill interval.

Greater Lenora said Behre Dolbear and two other consultants had come up with figures (based on a 25-metre drill interval) that supported the earlier reserve calculations, but that the firms were not satisfied that the deposit was continuous enough to justify the wider hole spacing. The uncertainty about the reserve figures, in turn, meant that the feasibility study on the deposit was placed in doubt. The study had concluded that a

5,400-tonne-per-day operation would be economic.

Along with its statement of the lower reserve figures, Greater Lenora announced that Werner was resigning from his position and from the board.

Chairman Robert Kasner has assumed Werner’s duties. Chief Financial Officer Steven Manz also resigned, and has been replaced by Daniel Farrell.

“This is an absolute shock to the board,” said Farrell, who told The Northern Miner that Behre Dolbear would be delivering further recommendations to Greater Lenora. “We will sit down with all the consultants and then make some objective decisions.”