RFC begins program on Pend Oreille

With new management in place, RFC Finance (TSE) recently began a 20,000-ft. underground drilling program on its Pend Oreille property in northern Washington state. RFC is 44% owned by Kerr Addison Mines (TSE) which gained control over the company’s board late last year and put in place new management.

The drilling program is designed to test the northerly extent of the Yellowhead zone. Previous work on the Yellowhead zone outlined preliminary reserves of 6.2 million tons grading 8.8% zinc and 1.9% lead.

RFC had announced plans in May, 1990, to put the property into production by the fourth quarter of 1991 at a capital cost of about US$27.8 million. This plan has been put on hold until the open extent of the Yellowhead zone to the north is tested.

Previous drilling indicates the Yellowhead zone thickens to the north while combined zinc-lead grades increase, both of which could have a significant impact on the project’s economics.

The company will test the northerly extent of the zone by drilling from the previously mined Josephine formation located 1,000 ft. above.

The two zones run parallel and are essentially flat-lying. Josephine was mined from the early 1900s until it was shut down in 1977 leaving a 2,400-ton-per-day mill on site. Most of the equipment in the mill is unusable, however, explaining the relatively high capital cost of bringing the mine back into production.

Kerr Addison agreed to finance the drilling through a loan to RFC. The program is expected to cost about $1 million which would be added to the $1-million RFC currently owes Kerr.

If the drilling program is successful in outlining additional reserves, a further study to determine the economics of mining the deposit will be initiated.