Skyline heads for production at Johnny Mountain gold mine

The Johnny Mountain gold mine of Skyline Resources is heading for production starting in the second quarter of 1988. The mine is located on a portion of Skyline’s Reg claims which cover approximately 15,900 acres in northwestern British Columbia.

Delayed by bad weather in September and October, on-site work is now gearing up and most of the mill equipment has been airlifted onto the property. Mill structural steel is being erected and heavy mill equipment is being placed as it arrives.

The mill is designed to process up to 400 tons per day, but initial production will be around 200 tons per day with an average ore grade of 1 oz gold per ton. Initial annual production is estimated to be around 60,000 oz of gold and is expected to increase to around 100,000 oz over the next two years.

The delays have pushed the project slightly over its $20-million budget, Ronald Adie, vice-president finance reports. He adds that the company has raised sufficient funds to meet its financial commitments to complete mill construction during the first quarter of 1988. Working capital for the year ending Oct 31 was $12.2 million.

Underground development is continuing on the Discovery vein and the 16 vein. A 42,000-ft diamond drilling program has been completed, along with about 3,860 ft of drifting and 1,130 ft of raises of which approximately 1,150 ft were driven in ore.

The first stope in the 16 vein is well advanced and will be ready to provide the initial mill feed. Ore reserves in this stope are estimated to be 45,000 tons grading in excess of 1 oz gold per ton, President Reg Davis reports. Work has started on the first stope in the Discovery vein.

Proven and drill-indicated reserves are 318,000 oz grading 0.83 oz. There is an additional 680,000 tons in the inferred category grading 0.67 oz.

During 1987, extensive geophysical work on the Reg claims confirmed the extension of the Discovery and 16 veins to the east and west of the current underground workings. Both veins are open at depth and at both ends.

A second adit about 150 ft below the first adit, and two raises between the levels are under way. The second adit will explore the full extent of the two veins and will allow expansion of ore reserves to depth by further diamond drilling.