Loki ups reserves estimate at Brewery Creek project

The Brewery Creek gold project near Dawson, Yukon, is now reported to contain preliminary reserves in nine shallow deposits totalling about 16.5 million tons (diluted) at an average grade of 0.054 oz. gold per ton.

This represents a substantial increase from calculations made at the end of the 1990 exploration program which placed total reserves at 11.1 million tons averaging 0.052 oz. gold per ton.

The independent reserve study was completed by Orcan Mineral Associates for Loki Gold (VSE), a Vancouver-based junior which holds a 49% interest in the gold project. Hemlo Gold Mines (TSE) has a 51% interest and is operator. The reserve study is based on exploration results to the beginning of August, which includes 578 reverse circulation drill holes totalling 98,661 ft., 25 diamond drill holes totalling 7,824 ft. and 49 trenches totalling 41,755 ft. The first phase of the 1991 program was more heavily focused on delineating known mineralization than on exploring untested targets. But in August, the partners funded a $1.2-million second-phase program in order to better determine the property’s exploration potential.

Loki President Lawrence Nagy said the program located and began definition of new targets “which have potential to add significantly to these reserves.” He added that follow-up trenching and drilling on these and other untested geochemical targets defined late in the 1991 program will be the focus of ongoing exploration programs on the property.

Loki estimates that the updated reserve represents a total of 897,000 oz. contained gold, of which 677,000 oz. would be in the oxide, heap leach category (the gold is fine and considered readily leachable in a cyanide solution). Of total diluted tonnage (16.49 million tons), oxide reserves account for 11.7 million tons grading an average of 0.058 oz. gold per ton. The deposits outlined to date at Brewery Creek — Blue, Canadian, Foster, Golden North, Golden South, Kokanee, Lucky, Moosehead and Pacific — are amenable to open pit mining methods, at an average stripping ratio of 1.17-to-1 overall.

Grade, tonnage and stripping ratios do vary somewhat from zone to zone. The Kokanee zone, for example, contains oxide reserves of 2.9 million tons grading 0.065 oz. gold per ton with a stripping ratio of 1.29-to-1, while the Golden North zone contains 2.45 million tons of oxide reserves grading 0.065 oz. gold with a stripping ratio of 0.88-to-1. In contrast, the Moosehead zone hosts oxide reserves of 877,600 tons grading 0.038 oz. gold at a stripping ratio of 2.16-to-1, while the smaller Pacific zone hosts only 26,800 tons of oxide reserves grading 0.042 oz. gold with a strip ratio of 0.67-to-1. The reserves for the individual deposits were calculated on the basis of open pit mining parameters using cross-sections and transverse-sections at about 164-ft. intervals. Of total reserves, 15.42 million tons are classed as indicated, based on blocks projected to a maximum of 82 ft. from a drill hole. High grade assays were not cut. A cutoff grade of 0.029 oz. gold per ton was used in the reserve calculations for “ore,” and a cutoff grade of 0.015 oz. was used for low-grade material (included in the reserve) that must be mined within a pit in order to reach “ore.”