Noranda eyes Kerr-Sulphside

Vancouver – Junior Seabridge Gold (SEA-V) has inked a deal paving the way for Noranda (NRD-T) to earn a majority stake in the Kerr-Sulphside gold-copper project in northern British Columbia.

Under the agreement, the major can earn a 50% interest by spending $6 million over 6 years. Noranda can then earn an additional 15% by funding a feasibility study on the project. After earning its initial 50%, should Noranda elect not to proceed with a feasibility study, Seabridge can reacquire 100% of the project by paying $3 million.

“We believe that the Kerr-Sulphside project has the potential to become a world-class deposit,” says Seabridge’s President, Rudi Fronk, “but it needs the technical and financial resources of a major company like Noranda to determine its value and move it forward.”

Located 20-km southeast of the prolific Eskay Creek polymetallic mine, the advanced Kerr-Sulphside project hosts two deposits lying on two properties in the Iskut-Stikine region. The project is underlain by Upper Triassic to Middle Jurassic Hazelton Group volcanic, volcaniclastic and sedimentary rocks at the western edge of the Bowser Basin. Mineralization is associated with felsic to intermediate plugs, small stocks and dykes.

The Sulphurets deposit contains a total measured, indicated and inferred resource of 54.8 million tonnes grading 1.02 grams of gold per tonne, using a 0.5 gram gold cut-off. Disseminated copper-gold mineralization is centred around a hydrothermal breccia and dyke complex believed to mark the higher levels of a monzonite-related copper-gold porphyry system.

The Sulphurets gold zone, which is defined by a 2.5-by-1 km geochemical anomaly grading greater than 340 parts per billion gold and greater than 0.1% copper, contains two distinct styles of gold-copper mineralization, which are central to a complex series of overlapping hydrothermal alteration zones. The Breccia gold zone contains 2-to-4 grams gold with minor copper. The Raewyn copper-gold zone carries values of 0.3-to-0.8% copper and 0.4 gram gold. Mineralization is associated with chalcopyrite and local molybdenum. The Breccia zone has been overprinted by later silicification, while the Raewyn zone contains strong biotite, silica and local chlorite-albite alteration. Both zones are enveloped by a broad halo of phyllic quartz-sericite-pyrite alteration. The mineralization The zones trend northeasterly within strongly altered and fractured volcanic and immature sedimentary rocks of the Hazelton Group below the Sulphurets Thrust Fault. Some 72% of the total gold resource have been drilled off at 50 metres spacings and lies in the drill-indicated category.

The Sulphurets property comprises 158 claim units carrying Annual assessment requirements of $33,000. Three of the claims are subject subject to a 1-% net smelter royalty, capped at US$635,000. Annual advanced royalty payments of $5,000 have been made since 1991.

The Kerr deposit hosts a measured, indicated and inferred resources of 140.8 million tonnes grading 0.75% copper and 0.36 grams of gold, using a 0.4% copper cut-off. Mineralization extends for 3-km from the crest of a ridge above the southwestern branch of the Sulphurets Glacier down to the lower slopes of a cirque-like basin just above Sulphurets Lake. The deposit is described as a pyrite-rich copper-gold system hosted in strongly altered and deformed monzonitic intrusions in Stuhini Group sedimentary and volcaniclastic rocks. Alteration consists of variable amounts of sericite, chlorite, quartz, and anhydrite. The mineralization occurs in a quartz stockwork with associated pyrite, chalcopyrite, bornite, tetrahedrite and rare enargite. The highest-grade values are found within a core of chlorite-bearing alteration and quartz stockwork. Strong phyllic alteration with quartz and disseminated pyrite flanks the core zone. From 1985 to 1992, 144 diamond drill holes defined a mineralized zone measuring 1.9 km long by 100-to-150 metre wide to vertical depths of 350 metres.

The Kerr Property consists of 190 claim units and 10 placer claims carrying annual assessment requirements or cash-in-lieu payments of $40,000.

Seabrdige picked up the project in June of last year from Placer Dome (PDG-T). The price tag came in at 500,000 shares and 500,000 warrants, exercisable by Placer Dome at $2 per share for two years. Placer also retained a 1% net smelter royalty, which is capped at $4.5 million. The junior is required to purchase the net smelter royalty for $4.5 million should a feasibility study demonstrate a 10% internal rate of return after tax and financing costs.