Underground exploration by RFC Resource Finance (TSE) is enhancing the overall potential of the Pend Oreille project in northeastern Washington state, about 100 miles from Spokane.
After incorporating results from the recent program, RFC announced a revised preliminary reserve estimate (undiluted) of 4.9 million tons grading 10.2% zinc and 1.55% lead.
This represents a substantial increase over last year’s reserve estimate, which was reported as being 3.6 million tons of 11.1% zinc and 1.53% lead. To date, RFC has drilled 12 holes, nine of which intercepted ore grades and thicknesses. The results extend the deposit’s strike length to the northeast, 1,200 ft. beyond the previously reported reserve limits.
RFC also noted that the revised reserve represents an increase of 25% in contained zinc and 38% in contained lead, compared with the original reserve that formed the basis of a positive feasibility study by Cominco Engineering Services in April, 1994.
As a result, the mine life could be extended more than two years beyond the original forecast of seven years.
The Pend Oreille deposit is still open along strike and partially open to the west. The underground program is continuing and RFC President John Purkis believes reserves could potentially be doubled this year.
The feasibility study estimates it will cost US$33 million to bring the former producer (1938-1977) back into operation. However, a production decision will likely have to await an upturn in the zinc market. A mill exists on site, with a nominal capacity of 2,400 tons per day. However, RFC’s feasibility study is based on rehabilitating the mill to at least 1,500 tons per day. “We would adopt a higher-grade approach than that of past operators,” Purkis added.
Metall Mining (TSE) held a $6.6-million convertible debenture of RFC, which provides for automatic conversion of the debenture into RFC shares if the weighted average trading price of the shares during a 30-day period (starting in 1995) is greater than 125% of the conversion price of $1 per share. In mid-Feb. of this year, this debenture was converted into 6.6 million RFC shares. After taking into account this and other transactions, RFC will have 20.2 million shares outstanding.
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