Reserves could double at Echo Bay’s McCoy prospect

If infill drilling at Echo Bay’s Cove gold deposit produces the expected results, drill-indicated reserves at the Nevada property could double, the company said recently.

The Cove deposit is on the same claim block as Echo Bay’s McCoy heap leach mine in Lander Cty., Nev., where production this year is estimated at 85,000 oz gold. Reserves at the open pit property, which could be mined from underground, stand at 1.2 million oz gold and 53.3 million oz silver.

The latest results from three step- out drill holes at the Cove deposit have confirmed the extension of the orebody at least 500 ft to the northeast.

The company says over 200 ft of mineralization was encountered in each hole, with gold values ranging from one to 7.76 oz gold per ton.

According to Echo Bay, the three holes form a triangle with previous drill holes and cover a surface area of approximatley four acres. The new holes are between 300 ft and 400 ft apart. Assay results are expected shortly on three other holes also completed within 500 ft of the previously known Cove limits.

If infill drilling establishes continuity of the mineralization, the previously announced drill-indicated reserves would be doubled, the company says.

A total of four more stepout drill holes are now being drilled, the farthest being 1,500 ft to the northeast of the previously established Cove limits.

“We initially extended Cove by drilling on 100-ft centres,” said President John Zigarlick. However, Echo Bay is now stepping out on 400-ft centres so that it can determine the outline of the Cove deposit more quickly.

“We have some high grade ore in the McCoy pit, and we expect to have a lot more from Cove, once it is developed,” said Mr Zigarlick who is planning a mill complex to handle high grade material. The first increment is planned at 5,000 tons per day and production could start by 1989. “Other units could be added if necessary,” he said.

Echo Bay controls 48,000 acres, or 75 sq mi at McCoy/Cove. The closest claim boundary to the known limits of the Cove deposit is about three miles. The distance to the company’s boundary to the north, the direction in which the drilling has progressed, is about eight miles.

These latest results were well received by investors as the company shares were trading recently on the Toronto Stock Exchange at $37.38, close to its $39.63 low point.