New zone found at Ketza River

The newly discovered Fork zone at the Ketza River gold property of YGC Resources (VSE) is expected to add significantly to the economics of the project.

The property is situated in south-central Yukon, 80 km by road, south of Ross River. The former producer lies in mountainous terrain at an elevation of 4,590 to 5,100 ft.

The new oxide zone was identified during the 1995 drilling program, between two mined-out orebodies near the 386-ton-per-day Ketza River mill. A total of 35 holes have systematically tested the tabular-shaped body over a 590-ft. strike length. The zone, which remains open along strike, averages a true thickness of 26 ft. with widths ranging from 82 to 131 ft.

Selected assay results from recent drilling include: 6.5 ft. of 0.16 oz. and 3.9 ft. of 1.11 oz. gold per ton for hole 530; 7.5 ft. of 0.47 oz. and 39 ft. of 0.45 oz. for hole 537; 35 ft. of 0.48 oz. for hole 543; and 17.4 ft. of 0.21 oz. for hole 545.

YGC spent close to $500,000 carrying out its program this year. President Peter Tredger anticipates an aggressive drilling program for 1996 at a cost of upwards of $1 million.

The Fork zone and the newly identified McGiver and B-Mag oxide zones were discovered at Ketza River after a reinterpretation of the property geology suggested that the mineralization is stratigraphically controlled in the Lower Cambrian limestones, not structurally controlled as previously believed.

The McGiver and B-Mag zones are situated within 2 km of the mill. Two holes, drilled 49 ft. apart in the McGiver zone, returned 23.3 ft. of 0.45 oz. and 31.5 ft. of 0.3 oz., while a stepout hole 49 ft. along strike of the B-Mag zone encountered 26.2 ft. of 0.24 oz.

The Ketza River mine was originally brought into production in 1988 by Canamax Resources and Pacific Trans-Ocean Resources at a capital cost of $26 million. From 1988 until it closed in 1990, a 386-ton-per-day mill employing a conventional carbon-in-pulp cyanide extraction process produced 93,312 oz. The underground operation was hampered by high operating cash costs and lower-than- anticipated reserves caused by a miscalculation of the bulk density of the oxide ore during the feasibility phase.

YGC believes a portion of the Fork zone could be mined by open-pit. This target and two other oxide zones are expected to contain sufficient reserves to double the project’s mine life to four years.

YGC has outlined an oxide reserve base of 266,000 tons averaging 0.39 oz. at its nearby Grew Creek property, situated 92 km from Ketza River. An internal feasibility study assessed the viability of open-pitting the deposit and trucking the ore to the Ketza River mill for processing.

Approximately 160,000 tons can be mined by open-pit methods, producing 62,000 oz. at an estimated cash cost of US$242 per oz. A further 28,000 oz. are thought to be recoverable through underground methods, but at a higher cash cost. Startup costs are projected at $5 million.

In addition, the Ketza Creek property also hosts a sulphide deposit containing 209,000 tons grading 0.33 oz. The metallurgical differences in this deposit, however, would require modifications to the mill.

Wheaton River Minerals (TSE) is YGC’s largest shareholder, owning a 56% interest.