A porphyry copper-gold prospect held by a unit of BP Canada (TSE) and Digger Resources (VSE) north of Fort St. James, B.C., has attracted the attention of Rio Algom (TSE).
Rio Algom signed a letter of intent agreement with Digger and certain shareholders of the company. If it is approved and formalized into a final agreement, Rio Algom will acquire a sizable equity position in the junior company. In addition, the major will have a representative on Digger’s board of directors.
The funds would be used by Digger for ongoing exploration at the Chuchi Lake copper-gold property. BP is the operator under the terms of its 50/50 joint venture agreement with Digger.
The geologic setting of the property is reported to be similar to that of the nearby Mt. Milligan discovery, being delineated by Continental Gold under a joint venture with BP.
Both are found in alkalic Takla Group volcanic rocks of Triassic age intruded by stocks, dykes and sills of similar composition with associated hydrothermal alteration and mineralization of chalcopyrite, pyrite and magnetite. The Chuchi Lake property, 30 km west of Mt. Milligan, is directly a ccessible by road.
Rio Algom, a partner in the huge Highland Valley open pit copper mines of southern British Columbia, also has an equity interest in Continental Gold.
In the 1990 summer season, Digger and BP plan a $1.7-million program focused on a copper-gold porphyry system discovered last year. The Chuchi Lake anomaly is currently reported to measure 5,000×3,300 ft.
The objectives of the program will be to establish the extent of this copper-gold porphyry system and investigate two further copper and copper-gold anomalies on the property.
It will be a staged program involving a 1-drill operation from mid-June to late July during the first stage to turn out about 13,000 ft. of core. During this stage, the partners also plan geophysical and geochemical surveys over the other anomalies on the property.
The second stage will see a second rig added for an additional 33,000 ft. of drilling and assaying from August to October. Digger noted that the 1990 program will allow a decision to be made by mid-summer for a further program over the 1990/91 winter season.
In addition, funds allocated to the program will provide for early stage exploration on additional optioned acreage contiguous to the Chuchi claims.
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