Test mill gets green light at Murgold/Chesbar prospect

Murgold Resources (TSE) President Charles McAlpine had some good news for shareholders at the company’s recent annual meeting in Toronto.

He said Murgold and partner Chesbar Resources (ME) have elected to build a 150-ton-per-day gravity test mill at the Chester Twp. gold property where production is expected to begin sometime next year.

Located 60 miles north of Sudbury, Ont., Chester Twp. is one of the few exploration properties in Canada with a highway running through the middle.

But McAlpine said the operation won’t be affected by Hwy. 144 which connects Sudbury to Timmins. “Our main focus will be to get the mill running and generate some cash flow,” said McAlpine who expects the facility to be completed at a cost of between $400,000 and $1 million later this year.

In 1985, Murgold optioned 63 of its 294 Chester claims to Chesbar Resources. After spending $2 million on exploration, Chesbar has earned a 60% interest while Murgold retains 40%.

By December, 1987, some 29,000 ft of surface and 30,000 ft of underground diamond drilling had been completed and reserves stand at 423,547 tons grading 0.223 oz gold per ton. Using a 2,000-ft access ramp, Chesbar is now testing the No 3 and No 4 vein systems at a depth of 515 ft.

According to McAlpine, drifting on the No 3 vein at the 400-ft level is averaging 0.212 oz across the full drift width of 7.81 ft for a length of 122 ft.

As indicated by drilling below 400 ft where Chesbar pulled 5.5 ft grading 0.318 oz, additional exploration is expected to add significantly to current reserves.

Other notable intersections in the 550 to 700-ft region were a 9-ft section grading 0.178 oz. It included a 5-ft section which assayed 2.480 oz.

When the mill and crusher are in place later this year, the partners will test the facility using a stockpile of 3,000 tons of high grade ore. McAlpine told The Northern Miner that the partners will also test the mill using ore drawn from raises on the 200-ft and 400-ft levels.

He will use the cash flow to finance exploration in other areas of the 294-claim Chester property where a number of gold showings have been uncovered. The showings include 2 ft of 0.2 oz which was discovered when Murgold traced the No 3 zone down to the highway.

Magnetometer work is also in progress in an area south west of the joint venture claims.

With a year-end cash position of $116,000, McAlpine said his company can maintain its 40% interest at the Chester Twp. project where testing will begin at a rate of about 50 tons per day.

The Murgold issue was trading recently on the Toronto Stock Exchange at 48 cents in a 52-week range of 92 cents and 40 cents .