Mt. Nansen startup imminent

Final environmental approval in the form of a Class A water licence has enabled BYG Natural Resources (BYG-T) to proceed with construction and development of its Mt. Nansen gold project near this historic mining town.

The precious metals project is the first of several that the company hopes to develop in the Yukon and surrounding region.

Presiding over Whitehorse-based BYG is Malcolm Slack, who was attracted to the Yukon by its numerous small-tonnage deposits, which he believes can be mined profitably using common regional milling facilities and infrastructure.

If the same deposits existed in Ontario, he says, they would have been mined out 50 years ago.

He adds that a regional approach to exploration and development would prevent the problems that would likely result from relying on a small mill to process ore from a single small deposit.

The company continues to demonstrate its commitment to forming working relationships with other interested parties in the Yukon. On a recent visit to the Mt. Nansen project, The Northern Miner witnessed the signing of a socio-economic agreement between BYG and Little Salmon Carmacks First Nation, which provides the framework for a partnership on several proposed ventures in the region.

Situated 225 km north of Whitehorse, Mt. Nansen is accessible by a 60-km gravel road that veers off of the Klondike Highway, west of Carmacks. It lies at an elevation of 1,200 metres in the Dawson Mountain Range, in terrain that is marked by rounded ridges and shallow valleys with a light cover of vegetation and small trees. The area escaped glaciation and thus is extensively oxidized to depths of up to 75 metres.

Mt. Nansen is a former producer. An existing 270-tonne-per-day flotation gold mill, built in 1968, has remained in good condition, partly as a result of a dry climate that averages an annual precipitation of about 25 cm.

The property comprises 453 mineral claims and hosts four epithermal gold deposits: Brown-McDade, Webber, Huestis and Flex. All of these are within 1 km of the mill.

A feasibility study in 1994 concluded the deposits could produce 47,000 oz.

gold-equivalent per year over a 5-year period at an operating cost of US$215 per oz.

The capital and preproduction costs of reactivating the former producer are projected at $8.5 million. BYG recently raised $7 million through an equity financing and arranged a $2.5-million loan with Connecticut-based Gerald Metals.

BYG is expanding the daily milling capacity to at least 500 tonnes by adding a carbon-in-leach cyanide circuit, suitable for treating both the oxidized, open-pit material and a mixture of underground oxide and sulphide material.

To process the high-grade underground sulphide mineralization, it will be necessary to revamp the flotation-cyanide circuit.

Provisions have been made for an expanded rate of production of up to 700 tonnes per day, which BYG says will yield an annual production of 70,000 oz.

at a cost of US$200 per oz. Long-term plans call for an expansion of the daily milling capacity to 2,000 tonnes, and this facility could be used by other mines in the region.

At the time of our site visit, mill modifications, rehabilitation and equipment installation were under way, and construction of the tailings dam was starting.

Power will be provided by on-site diesel generators, and water will be drawn from two wells in the Victoria Creek area.

BYG is bringing Mt. Nansen into production on the basis of proven and probable oxide reserves. Permitting of the higher-grade underground sulphide material is being delayed until the new tailings dam has been tested in operation.

Initially, miners will focus on the Brown-McDade deposit, where open-pit methods are to be employed. An upper, oxide zone hosts 201,602 tonnes (proven and probable) grading 7.1 grams gold and 69 grams silver per tonne, plus a lower-grade resource of 117,228 tonnes at 2 grams gold and 24 grams silver.

The stripping ratio of the planned pit area is 3-to-1, while the gold recovery is expected to be 86%.

A lower sulphide zone, which will be accessible by underground methods, contains 298,406 tonnes grading 6.8 grams gold and 57 grams silver.

The Brown-McDade deposit consists of a complex network of mineralized vein and breccia zones. The veins are spatially associated with a swarm of feldspar porphyry dykes. The deposit has been tested by a combination of surface trenching, 570 metres of underground drifting and 75 diamond drill holes. It extends over a length of 500 metres and has an average width of 10 metres.

The Flex zone contains oxide reserves minable by open-pit methods; these are estimated at 67,507 tonnes grading 4.9 grams gold and 182 grams silver.

Underground sulphide reserves stand at 23,495 tonnes averaging 8.7 grams gold and 357 grams silver in the footwall, and 17,590 tonnes averaging 6.2 grams gold and 485 grams silver in the hangingwall.

Mineralization is traced for a length of 650 metres and occurs in a series of intertwining and branching quartz veins. Substantial exploration has been carried out, including surface trenching and drilling of 43 holes. The Flex zone lies between the Webber and Huestis deposits and crosses their strike at a shallow angle similar to the strike of minor veins that splay off of those two deposits.

The Webber contains 85,432 tonnes grading 9.4 grams gold and 560 grams silver. Mineralization occurs in a narrow network of quartz veins within a shear structure. The deposit has been explored over a 500-metre strike length by trenching, and underground development is in progress.

On strike, 700 metres southeast of the Webber, is the Huestis zone, which is defined over a 530-metre strike length by a combination of surface trenching and underground drilling. The zone occurs as a branching quartz vein network within narrow shears and is estimated to contain 123,846 tonnes grading 14.1 grams gold and 291 grams silver.

An additional 68,038 tonnes of material are stockpiled from past development work; the average grade of the stockpile is 5.1 grams gold and 125 grams silver.

All four deposits remain open at depth, with exploration and development work limited to an average depth of 92 metres. A hole drilled in 1995 extended the reserve potential of the Huestis deposit to a depth of 427 metres by returning a grade of 4.8 grams gold-equivalent over 5.2 metres.

BYG is carrying out a 915-metre program of infill drilling in an attempt to link up the Webber and Huestis deposits. At the time of our visit, the third hole of the program was in the process of being drilled.

BYG believes its mine property lies within a well-defined,

northwesterly-trending structure that runs parallel to the Big Creek fault, which, in turn, parallels the Tintina fault. The Mt. Nansen trend extends for more than 30 km and is up to 3 km wide.

The trend comprises a northwest-oriented network of faults hosting narrow, high-grade vein systems, as well as wider, complex vein and breccia zones. A second set of faults cuts across the trend in a northeasterly direction. The company has expanded its land package to 831 claims, which covers more than 20 km of the prospective trend.

The Mt. Nansen trend is hosted, in the south, by highly metamorphosed rocks of the Yukon Crystalline Terrane, and, to the north, by a Cretaceous-aged granodiorite related to the Coast Plutonic Complex. A major, low-grade porphyry copper deposit lies midway along the trend. Andesite flows overlay the eastern and western flanks.

The mineralized zones and coincident geochemical gold anomalies cut through all of the different rock types (with the exception of the porphyry copper).

And in every instance, the mineralization is associated with a local porphyry plug or dykes.

Within the main mine area, soil geochemical gold anomalies extend for more than 5 km of strike length, and at least five more zones are in need of follow-up exploration.

The Tawa property begins 10 km to the northwest of the mill site and is separated from the mine property by ground held by Aurchem Exploration, a private company that is repo
rting some interesting numbers from limited drilling.

Early exploration efforts suggest Tawa is connected by geochemical anomalies that extend from the Mt. Nansen property, through the intervening Aurchem property, and on to the southern end of the Tawa property. Three structures have been identified by limited exploration work.

Placer gold was originally discovered in the Mt. Nansen creek in 1899. Almost 100 years later, several placer projects continue to operate from creeks draining the Mt. Nansen area.

The first lode deposit was discovered in 1943, resulting in an initial flurry of activity. The area essentially lay idle until 1964, when Peso Silver Mines acquired control of the Mt. Nansen Syndicate and spent three years exploring the Webber, Huestis and Brown-McDade zones.

A 270-tonne-per-day flotation mill was constructed in 1968, but a planned cyanide circuit was never completed. After the processing of 19,818 tonnes of development muck and ore from the Webber and Huestis deposits, the mine was closed in 1969 — a victim of low gold recoveries and a lack of working capital.

In 1975, production resumed, long enough to process 9,662 tonnes of ore from the Huestis deposit, before the mine shut down again as a result of poor recoveries.

BYG acquired Mt. Nansen in 1984 and optioned an interest in the property to Chevron Minerals. Extensive exploration was carried out from 1985 to 1988, including 25,238 metres of surface trenching and 9,285 metres of drilling.

The work led to the discovery of the near-surface Brown-McDade oxide zone and expansion of the underground sulphide reserves.

BYG reacquired a 100% interest in the project in 1989.

>From its headquarters in Whitehorse, BYG is completing the spinoff of a new exploration company, Trumpeter Yukon Gold, to which it is transferring full ownership of the Arctic property and a half interest in the Tawa property.

The Arctic mine, a past producer, lies in the Montana Mountain area, 80 km south of Whitehorse. Underground reserves are estimated at 74,682 tonnes grading 13.37 grams gold and 329.2 grams silver.

Shareholders of BYG will be granted one Trumpeter share for every 10 BYG shares held.

A separate agreement with Omni Resources (ORI-V) gives Trumpeter the right to acquire half of Omni’s interest in a package of properties comprising more than 1,000 contiguous mineral claims in the Wheaton River Valley area, 65 km south of Whitehorse.

The property package includes the Skukum Creek property, the former producing Mt. Skukum gold mine and 300-tonne-per-day cyanide mill, and the Goddell gold project.

The Mt. Skukum mine began operating in February 1986, and produced 77,796 oz.

gold before operations were suspended two years later. The decision to close was based on depletion of the oxidized Cirque deposit and on the failure of operators to confirm drill-indicated reserve estimates in the oxidized Lake zone. The mine was operated by partners Total Erickson Resources and AGIP Resources.

BYG reports that the Lake zone hosts 76,479 tonnes grading 18.8 grams.

The Skukum Creek property lies 9 km south of the mill. About $11 million was spent in the mid- to late-1980s on development of the underground Rainbow and Kuhn deposit, which have a combined reserve of 465,342 tonnes grading 7.5 grams gold and 274 grams silver.

Omni can earn a 70% interest on the adjoining Goddell project from 75% property owner Arkona Resources (AKA-V) and 25% owner No. 276 Taurus Ventures. Based on limited drilling of five holes, an inferred reserve is estimated at 207,071 tonnes grading 9.94 grams gold.

BYG will own a minimum 34.3% share of Trumpeter’s proposed 26.7-million outstanding shares.