Pre-feasibility under way at Athabaska Gold project

Drilling at the Nicholas Lake gold project held by Athabaska Gold Resources (TSE) and Chevron Minerals has been placed on hold while the partners complete an initial feasibility study. Situated 60 miles north of Yellowknife, N.W.T., the property is thought to have sufficient reserves to support a mining operation. But due to financing constraints and uncertainty regarding Chevron’s future plans, operator Athabaska has concentrated on its attempt to increase reserves of 120,000 tons (including 614,000 tons of grade 0.36 oz. gold per ton).

However, similarities between Nicholas Lake and Corona’s 400- ton-per-day Jolu mine in Saskatchewan have reinforced Athabaska’s belief that the property can be mined at a profit. After producing 75,722 oz. gold last year, Jolu generated a pretax profit of $11.6 million.

With preliminary mine and mill design now under way, the partners say a positive feasibility study could pave the way for a $3-million underground bulk sample test next year. The prefeasibility study is expected to be completed this month. If reserves are confirmed by underground sampling, the partners could proceed with a final feasibility study with the possibility of being in production by 1992.

“In the interim, additional diamond drilling may increase the reserves and raise the planned production rate,” said Athabaska President James Kermeen.

With an $800,000 program now 50% complete, Kermeen said two deep inclined holes intersected the mineralized zone of the Main Showing at a depth of 1,263-1,542 ft. Results included 12.8 ft. of grade 0.16 oz. gold from 1,697-1706 ft. and 3.5 ft. of grade 2.27 at the 1,412-ft. level.