Sutton/Crown Drilling Creede Property

Drilling of two deep holes is now under way on the Creede, Colorado silver-gold property held 50/50 by partners Sutton Resources (VSE) and Crown Resource Corp. (NASDAQ).

The project is located in the Creede mining district which has been the focus of considerable attention since 1985 when rumors of a large, high grade silver discovery by Homestake Mining were widely circulated.

Although Homestake is believed to have spent about $10 million exploring its North Amethyst project next door to the Sutton/Crown property, what they did or didn’t find (from underground work which began in 1984) hasn’t been made public. But considering the fact the company had a mill from a recently closed silver mine nearby, results likely were disappointing. So far as can be gathered from various sources, the company did identify ore grade mineralization in gold and silver veins of mineable thicknesses, but was unable to confirm continuity of the mineralization and, consequently, sufficient ore for an economic operation in view of current silver prices.

The Creede mining district, however, is still very much of interest to the United States. Geological Survey which has determined it to be one of the best examples of the important volcanic-hosted class of epithermal ore deposits. USGS and a variety of geoscience groups have in fact proposed a major research deep drilling program for 1989 and although it will have a variety of multi-disciplinary academic objectives, its main purpose is to explore the roots of a volcanic-hosted, epithermal, precious metal vein system associated with a large Tertiary caldera cluster. The major targets include a deep inferred heat source in the form of a concealed intrusion and possibly associated stacked porphyry-type mineralization.

Although one of the USGS holes is expected to be drilled to a depth of between 3-5 km, the Sutton/ Crown Resource team has far more modest objectives. Their two holes, each 2,000 ft in length, will be drilled on the East Amethyst vein near the northern end of the claim block. The companies say the property covers at least 6,000 ft of the key East Amethyst vein system, and is located between the Homestake gold-silver discoveries and the historically productive mines on the south. (Over the past 100 years the mines produced about 100 million oz of silver.) Drilling is expected to be completed by the end of October.

The two companies had at one time optioned the property to Homestake, but this was terminated for various complicated reasons as were subsequent discussions with Denison Mines on a possible agreement that would have allowed Denison to earn a 55% interest by spending $7.4 million over four years.

In addition to several other projects, Sutton and Crown Resource each have a 25% working interest in the Seattle Mine and Flag Hill properties in Washington State adjacent to Hecla’s Knob Hill mine which has been in production for 50 years. Underground work is focussing on the potential feeder vein system of the Seattle Mine and is expected to confirm existing reserves, while surface work is testing vein targets, some of which have had past production. Drilling on the adjoining South Penn open pit (owned equally by Sutton and Crown) has started to examine the potential feeder vein to the surface bulk tonnage stringer zone. This program will be followed by a reverse circulation drill program to detail the extent of the bulk tonnage deposit currently estimated at 730,000 tons of 0.05 oz gold per ton.