River Gold advances Eagle River

Junior River Gold Mines (TSE) is hoping to have its Eagle River gold project in northeastern Ontario in production by August, 1995. The company is also planning to spin off its Moss Lake project into a publicly listed company.

Eagle River, which was explored by Central Crude before that junior was taken over by Western Quebec Mines (TSE) and renamed River Gold, has been undergoing stope definition drilling. The drilling targets have been the No. 8 and 6 zones, to a depth of 150 metres.

Proven reserves at the property, 50 km west of Wawa, stand at 159,000 tonnes grading 6.87 grams gold per tonne, with probable reserves totaling 1.9 million tonnes at 8.57 grams.

An August startup will provide a projected output of 467,000 grams (15,000 oz.) for 1995. For 1996 and beyond, based on a production rate of 300 tonnes per day, annual output of 1.24 million grams (40,000 oz.) is projected. The capital cost of bringing the project into production is about $16 million. It is likely the company will decide to custom-mill its ore — there are several mills in the area — although President Conrad Hache has not ruled out construction of a processing facility on site.

Hache said management is confident that near-surface reserves will support mining until 1999, when a shaft will likely be required. “We see four to five years of reserves there now as easy,” he told a group of investors in Toronto. Contractor Ross Finlay recently began dewatering the ramp and the three levels at Eagle River.

Meanwhile, the low-grade, high-tonnage Moss Lake gold project near Shebandowan, Ont., is expected to become the property of a new company to be known as Moss Lake Gold Mines. The three current property owners — River Gold (with more than a 50% interest), Storimin Exploration (ASE) and Tandem Resources (ME) — have agreed to pool their interests in the project on a pro rata basis.

Storimin has agreed to distribute its shares of Moss Lake to its shareholders on the basis of one share of Moss Lake for every two shares of Storimin. The new company, to be controlled by River Gold, will have about 22 million shares outstanding.

A preliminary resource estimate of 60 million tonnes averaging 1.1 grams has been calculated, to a depth of 250 metres. There is a higher-grade core zone which the partners hope to evaluate in 1995.

George Mannard, vice-president exploration for River Gold, will become president of Moss Lake. Elsewhere, Western Quebec plans to deepen the shaft at its Joubi project just outside of Val d’Or, Que.

The small gold producer — the company is projecting output of 7,000 oz. for Joubi for 1995 — will see the shaft extended by 160 metres to 485 metres, which will allow for the addition of two new levels. Hache said the work will start by mid-February, 1995, and take about three and a half months to complete.