Vancouver — The largest drill program planned for Canada in 2003 may have got 9,000 metres bigger, now that
President Anthony Walsh says the extended program is warranted by the scale of the Boston gold system and its potential persistence to depth, a typical feature of many Archean shear-hosted gold deposits.
To date, the Boston mineralizing system is the largest gold resource in the Hope Bay belt, with a measured and indicated resource of some 1.4 million tonnes grading 15 grams gold per tonne.
Previous reconnassiance drilling by BHP, now BHP Billiton, showed that gold mineralization continues to depths of at least 600 metres below surface. Archean shear-hosted gold deposits often extend to depths of 2-3 km, and so far the Boston system has been systematically explored only to depths of 350 metres. Miramar aims to test the zone to at least 1 km below surface.
To fund the program, the company has arranged a private placement, on a best-efforts basis, of 2 million flow-through shares priced at $1.60 each.
The additional 9,000 metres of drilling will serve to augment a program already budgeted for 34,000 metres of core drilling and 4,500 metres of reverse-circulation drilling. Most of this drilling will focus on the favourable, 11-km-long Deformation zone trend in the Madrid area, as well as related structures.
Says Walsh: “Our primary objective is to expand on the encouraging results from the Madrid area over the past two years, during which time we discovered five significant gold occurrences.”
In the Madrid area, Miramar has identified a series of deposits and gold showings over a 6-km section of the Deformation zone, from the Naartok deposit in the north, through the P112, Perrin Bulge, Matrim areas, to the 2001 Suluk discovery and the Marianas and South Patch areas. The 2002 drill program identified another 5 km of favourable strike that needs to be evaluated.
Mineralization in the Madrid area varies from veins to stockwork or breccia-hosted gold mineralization, with most of the deposits occurring either at or near the hangingwall of the Deformation zone or associated with one of the parallel structures. The exception occurs at the southern end of Suluk and at South Patch discoveries, where mineralization is contained within the Deformation zone.
Beginning in February, an initial, 35-to-40-hole program will test the extension of the known deposits and evaluate the untested portions of the Deformation zone. Primary targets include the depth and strike extensions to the Suluk deposit, the newly discovered Marianas gold showing, and strike extensions to the high-grade South Patch discovery.
A 35-hole, 11,000-metre program will follow up the results before spring breakup, and another 10,000 metres are set for summer.
Outside the Madrid area, exploration will test a conceptual target, known as Twin Peaks, where crews are evaluating potential for a “Timiskaming” type deposit. In the Timiskaming model, gold is trapped in and below sediments and conglomerates that cap underlying intrusive and volcanic rocks. Some six holes totalling 1,200 metres are budgeted for the target.
Reverse-circulation drilling will continue to evaluate the Nexus area, where exploration in 2002 extended the Deformation zone an additional 5 km to the south, as well as test the Inge prospect and Gas Cache alteration zone.
At last count, the Hope Bay project held measured and indicated resources of 3.4 million tonnes grading 15.4 grams gold, plus an inferred 6.7 million tonnes grading 12.3 grams gold. An updated resource for the Doris and South Patch deposits is expected by early 2003.
Earlier this year, an independent scoping study on the Doris area concluded that the high-grade Hinge zone can support a stand-alone operation with a capital investment of $26.7 million. A stockpile of 9,000 tonnes of Boston material would expand the Hinge zone resource to the tune of 471,600 tonnes averaging 18.5 grams gold.
Including $1.3 million in permitting and feasibility work related to the Doris North development project, expenditures at Hope Bay are expected to total $17.5 million in 2003.
For the three months ended Sept. 30, Miramar made a profit of $1.2 million (or 1 per share) on production of 31,250 oz. gold from its Yellowknife operations.
“The third-quarter results represent another consecutive quarter of earnings for Miramar,” says Walsh. “However, our Yellowknife operations did not catch up as much as had been anticipated. Unexpected power interruptions and lower-than-planned grades from certain key areas resulted in lower production.”
Operating cash flow was $6.9 million, compared with $2.7 million for the corresponding period in 2001. Creating the boost was a change in the accounts receivable for the sale of 48 million shares of
Removing the impact of this transaction, cash flow from operations amounted to $3.1 million. The Con mine added 67,687 tonnes grading 9.95 grams gold per tonne, and the Giant mine contributed 15,364 tonnes of 11.2 grams gold for processing at the Con mill.
A reassessment of the mine plan has extended the operating life to 2005. Production estimates for 2003 come in at 105,000-110,000 oz.; for 2004, they’re pegged at 80,000-85,000 oz.; and for 2005, they dwindle to 20,000 oz. Cash costs are expected to average US$250 per oz.
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