War Eagle Mining (VSE), which entered into a joint venture arrangement with Nerco earlier this year, announced initial assay results for the first two holes of the phase-one program. The first hole, W40, averaged 0.134 oz gold per ton (or 0.147 oz gold equivalent) over a 450-ft interval from 190 ft to a total depth of 640 ft.
Hole W40 was 100 m east of 16-2 and was drilled at a -60 degree dip bearing 270 degrees. Hole 16-2 was a vertical hole drilled late in the 1988 season which returned 75 ft of 0.114 oz gold.
Hole 16-2 and a 10-ft step-out from it which returned 245 ft of 0.16 oz gold and 1.59 oz silver sparked a short-lived surge of investor interest in the project last November.
The second hole in Nerco’s current program encountered anomalous mineralization and was presumed to have been drilled in the footwall of the structural zone. It was drilled 300 ft east of 16-2 and parallel to hole W40.
Nerco’s 15-hole phase-one program is estimated to total about 9,000 ft. War Eagle noted that these holes will be angled and drilled on 200 to 400-ft sections with intersecting drill patterns to identify the strike and dip of the controlling mineralized structures.
The discovery area is part of a 18-sq-mi land package held in a joint venture between War Eagle and Nerco DeLamar. The Nerco affiliate, which operates an open pit gold-silver mine near the War Eagle properties, can earn a 51% interest by spending $2 million (US).
After Nerco earns its interest, both companies will be required to contribute their proportionate share of ongoing expenditures or dilute their interest on a pro rata basis.
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