No plans to close producing mine, Skyline says

Gold producer Skyline Gold (TSE) has no plans to close its wholly owned Johnny Mountain mine in the Iskut River camp of northwestern British Columbia. Skyline President William Price said rumors of an imminent mine closure were “unfounded” and Ronald Shon, chairman and chief executive officer, denied rumors that he sold his sizable shareholding in the company.

“It’s business as usual,” said Price.

Although Skyline is currently processing at a rate of 350 tons per day and has recoveries up to 90%, it has not yet been able to turn its mine, which can be reached only by plane, into a profitable operation.

In recent months the grade has been lower than expected, and the company has been unable to replace minable reserves at the same rate processed by the mill. Underground drilling and the development of additional stopes are continuing in an effort to improve this situation.

Price said the company is also planning a summer exploration program aimed at testing several important targets that were identified in the 1989 summer program.

One of the key areas to be tested is the CE showing at the base of Johnny Mountain and on strike with the Snip deposit being readied for production by Cominco (TSE).

Price said work in this area revealed evidence of a series of stratabound gold-bearing mineralized zones within a 3-km-long geochemical anomaly. These showings will be tested for further evidence of massive-sulphide-type mineralization, as will the C3 showing within trucking distance of the mine site.