Placer/Claude project Underground decision expected at Seabee

After completing more than 60 drill holes on the Seabee property, h eld under option from Claude Resources, Placer Development is embarking on a period of review and assessment. Project geologists will be sitting down with staff engineers to assess the mass of data accumulated during the past year of exploration, in order to determine a new reserve figure and plan the next phase of exploration. More importantly, however, Claude hopes to find out before year-end if Placer intends to move to the next stage at Seabee — underground exploration.

It’s a question more than 30 brokers, analysts and consultants had on their mind during a tour of the Seabee project, located 78 miles northeast of here.

Acquired by Claude from Cominco in 1984, the property was optioned to Placer in 1985. The latter company has the right to earn a 55% interest by spending $2.5 million on exploration and bringing the property to production. A feasibility study must be completed before July, 1988.

After spending $1.8 million on surface drilling, mapping, stripping and geophysical surveys, “our first priority is to come to terms with what we’ve got,” Ian Thomson, district manager of western Canadian exploration at Placer, said during the field trip. “Although we have gone through the exercise of going underground, that decision remains to be made in the future,” he adds.

Although non-commital about which way the Placer decision might swing, Mr Thomson notes that his company is comfortable with Claude’s reserve calculations. Based on a review of drill data completed by Cominco, Claude calculates a geological reserve of 1.1 million tons grading 0.32 oz gold per ton across 8.8 ft. Uncut, the average grade is 0.53 oz gold per ton. The reserves are within shoots associated with three different vein systems occupying subparallel shears.

A crucial factor, which will have great impact on the Placer decision, is one of geography. Located on the shores of Laonil Lake, the Seabee property is more than 35 miles from the nearest road. This would require the transportation of heavy equipment, needed for underground exploration, across a winter road, Mr Thomson explains.

Under the terms of their agreement, Placer must have a feasibility study completed before July, 1988. That leaves only two winter seasons in which an underground exploration program could be started — a stage of exploration which both Placer and Claude officials argee is warranted. However, the question most people are asking is, `have the Seabee reserves exceeded the threshold reserve which makes the project attractive to a large company such as Placer? In other words, is the Seabee project big enough? The deepest hole completed on the V2 zone, which hosts most of the reserves, was completed to a depth of 1,100 ft and intersected a 23-ft section grading 0.3 oz gold per ton. The Claude reserve figure is calculated to a depth of 1,000 ft.

Also, on surface, the V2, V20 and V5 zones are proximal and within several subparallel structures striking for more than 3,500 ft. Typically, such long structural shear zones also have considerable depth components. The Seabee shears could then be expected to dip to considerable depths, well below the 1,100-ft mark. The trick is to outline economic zones of mineralization within these large shears. Based on the deep drilling results and on improved knowledge about the shears, considerable exploration potential remains. Good exploration potential

This year, for example, shallow tests of the strike extension of both the V2 and V5 vein systems produced some of the best drill sections from the property. Hole 161, spotted from the ice on Laonil Lake, intersected two mineralized zones within in the V5 shear. The first assayed 0.51 oz gold per ton across a true width of 25.9 ft and the second intersected 6.7 ft grading 0.43 oz gold per ton. Peter Gummer, vice president of exploration for Claude, cites these examples as evidence of the property’s potential.

Claude officals appear confident that Placer will make an underground decision this fall. Mr Gummer noted that Placer has filed an application for a winter road and has been exploring the property with the intention of getting the maximum amount of information needed for planning an underground exploration program.

In response to a question from The Northern Miner, Claude Chairman William R. MacNeill pointed out at the site that the project’s success is not dependent on Placer. If the big company pulls out, Claude willkeep a 100% interest in the property upon repaying a $3 million cash advance made by Placer to Claude in 1985. “We’d have no trouble whatsoever in getting that financing (the $3 million), Mr MacNeill told The Northern Miner.

At the site, Placer has completed an impressive amount of surface stripping which has exposed the V2 vein system for several hundred feet. Located within a multiphase gabbroic intrusive, the V2 veins are associated with a major shear zone striking across the intrusive. Gold is associated with sulphide-bearing quartz veins occuring as shoots within the shear zone and proximal to quartz feldspar porphyry bodies. “The rock is very competent within the shear zone,” Mr Thomson explained. As a result of quartz veins pinching and swelling within the zone, “we would mine to the shear boundaries” as opposed to just mining assay boundaries, he adds.

Other important variables which will have to be determined by Placer’s engineers include dilution factors, cost per ton of mining the shears, and calculating a confident mineable reserve figure.

The Seabee project is not Claude’s only play in the active La Ronge gold camp. In fact, Mr MacNeill says that gold production will probably come from the company’s Jojay and Tamar projects before coming from Seabee.

Located adjacent to the Star Lake mine development operated by the Saskatchewan Mining Development Corp. north of La Ronge, the Jojay property has reserves of 368,000 tons grading 0.24 oz gold per ton. Modest reserves have also been outlined on the Tamar. Star Lake is expected to pour its first gold in January and will mill at a rate of 220 tons per day over a three-year mine life. Mr. MacNeill notes that the Star Lake mill will require feed and the Tamar and Jojay properties are likely feed sources.

SMDC has the right to earn a 66% interest in both properties by paying Claude $2 million over a four year period. Another MacNeill company, Shore Resources, has a deal with SMDC giving it the right to earn a 15% stake in both properties by spending $2 million on exploration.