Vancouver — With a 1,500-metre drill program ready to go on its Gold Mountain zone,
The junior inked a deal with privately held Arbutus Resources over the Silver King property, 1.5 km southwest of the Gold Mountain discovery zone. The property hosts the historic Silver King mine. In production from 1896 to 1910, the operation cranked out 247,100 tonnes averaging 3.29% copper and 665.2 grams gold per tonne. Some 54 holes drilled in the 1960s and 1970s outlined a proven reserve of 84,000 tonnes grading 2% copper, 0.9% lead and 294.8 grams silver. In 1998, Arbutus defined a strong geophysical anomaly associated with the favourable Silver King intrusive rocks that Sultan has been targeting on the adjoining property. Situated 300 metres southwest of the old mine, the anomaly measures 1,000 by 260 metres and has never been drill-tested.
The price tag for the property is $130,000 and 250,000 shares, to be paid over three years, as well as the greater of $240,000 or 120% of the assessed value of the surface rights of the property payable in 2006. Sultan will issue a further 200,000 shares on commercial production or completion of a positive feasibility study. Arbutus retains a 3% net smelter return royalty (NSR), which Sultan can reduce to 1.5% by paying $1 million.
Late last year, Sultan inked a deal to pick up the Cariboo, Princess and Cleopatra properties, immediately north of Kena. The Cariboo claims host alteration similar to the Gold Mountain zone, with grab samples returning up to 5.5 grams gold.
The company can acquire the properties outright by paying $51,500 over four years and issuing 200,000 shares. The vendor retains a 3% and 1.5% NSR on any gold-silver and other metal production, respectively. The completion of a feasibility study gives the claim owner an additional 200,000 shares.
Last year, Sultan drilled 29 holes over a 1.4-km-by-500-metre coincidental geophysical and geochemical anomaly regarded as a potential large-tonnage gold resource minable by open-pit methods. However, results received to date, show a high-grade, gold-bearing structural zone confined to the eastern margin of the intrusive body within widespread sub-economic gold mineralization.
Four of the first five holes cut broad, low-grade mineralization ranging up to 1.87 grams gold per tonne over 116 metres in hole 3. The style of mineralization suggested a gold-bearing porphyry, favourable for a large-tonnage, open-pit operation. Subsequent drilling hit sporadic intervals of low-grade mineralization, with some holes yielding bonanza gold grades over a width of 2 metres. The latest results are more indicative of a structural, controlled style of mineralization, favourable for higher grades but much lower tonnage.
Most of the high-grade intersections lie near the contact between the Silver King Porphyry and the Elise footwall volcanics, with values occurring in either rock type. The highest grades were in hole 3, where 1.2 metres returned 240 grams gold, and hole 8, which returned 2 metres of 172.1 grams gold. These holes were collared 125 metres apart, covering a vertical depth of 40-190 metres.
Positive results from the 2001 drill program prompted the company to study the potential for both an underground and an open-pit mine. The study, which is nearly complete, will include preliminary production and operating costs.
The most recent geophysical survey over the project defined three anomalies. The most easterly one encompasses the Gold Mountain zone and measures 1.4 km in length. A second, more westerly chargeability high, 1.2 km long, occurs where a previous drill hole cut 1 metre grading 50.8 grams gold. A third, parallel anomaly occurs where drilling in the 1980s cut broad zones of low-grade mineralization averaging 0.66 gram gold.
Preliminary petrographic and alteration studies on the drill core indicate the mineralization is consistent with a porphyry-gold depositional setting. Initial metallurgical tests on two composite core samples show that the material is not refractory, with recoveries hitting 92-97% using cyanide leaching.
Sultan has 12 holes spotted for the latest round of drilling over the Gold Mountain zone.
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