U.S. REPORT Hecla’s Republic mine draws interest to northern

The Republic district in northeastern Washington State is being given a close look by a growing number of mining companies hoping to duplicate the success encountered by Crown Resources (VSE) on several of its properties in the historic mining camp. Crown has a 30% interest in the Kettle River gold mine, successfully brought into production by Echo Bay Mines (TSE) early this year. And it also has a large land position in the district, including prospective ground surrounding the promising Crown Jewel property where recent drilling returned 130 ft. grading 1.25 oz. gold per ton starting at surface.

This hole was drilled only 40 ft. west of an earlier hole which returned 75 ft. of 0.57 oz. gold per ton from 25-100 ft. Both infill holes were drilled in an area where preliminary reserves were estimated early in 1990 to total 8.3 million tons grading 0.10 oz. gold.

Recent drilling also confirmed that the original reserve area joins up with the higher grade Southwest extension discovery area (1,000 ft. to the southwest) to form a single, large mineralized system. Crown said the connection of these two areas was confirmed by two recent holes which intersected 125 ft. of 0.39 oz. gold and 35 ft. of 0.72 oz. gold respectively.

Chris Herald, Crown’s vice-president of exploration, said the company considers the initial reserve area to be a resource minable by open pit method.

“But it’s not clear yet whether the Southwest extension area is an open pit or underground situation,” he added. “And it could easily be a mixture of the two.”

Ongoing exploration at Crown Jewel is being closely watched by Battle Mountain Gold (NSYE) which has an option to acquire a 51% interest in the 9,000-acre property by paying Crown $5 million and by bringing the property into production. It is a good deal for Crown as it would be carried to production with no repayment.

“Regardless of what Battle Mountain does, there is going to be continued exploration on this property,” Herald said. “We expect there will also be feasibility-type studies done either by Crown or by Battle Mountain.”

An updated reserve calculation for the skarn deposit is in progress and may be released early in 1991, Herald added.

In the meantime, Crown has cash flow from its 30% interest in the Kettle River underground mine which is expected to turn out 100,000 oz. gold this year. The bulk of production (about 80%) comes from the Overlook deposit, although the project includes other nearby, smaller deposits.

Crown holds one of the largest land positions in the Republic camp, but the region is best known for the high grade, low cost Republic mine owned and operated by Hecla Mining (NYSE).

Over two million ounces gold have been produced from the underground mine which has operated on an almost continuous basis since 1941. In 1989, the mine turned out 74,335 oz. gold at a cash production cost of about US$100 per oz.

Hecla recently spent US$6.6 million to reach the Golden Promise area and to facilitate underground exploration to expand reserves. A small portion of the funds were used to slightly upgrade and expand the mill.

Although Hecla’s production at Republic has typically come from epithermal gold veins, a new deposit was discovered in 1988 about one half mile from the mine. The Golden Eagle deposit is described as a lower-grade, large-tonnage sulphide deposit of refractory gold which will require a metallurgical recovery system that is different from what is currently used. Hecla is continuing to evaluate this discovery.

In recent years, the Republic camp has become recognized as prospective for a variety of gold deposits; including epithermal quartz-veins (Hecla’s Republic Mine), skarns (Crown Jewel), replacement deposits (Overlook deposit) and alkalic intrusive-related gold-copper mineralization, among others.

During the recent Northwest Mining Association convention in Spokane, Wash., an afternoon session was devoted to the geology of the Republic district, along with summaries of recent mining and exploration activity.

“It’s going to be a major gold camp in North America,” Herald told The Northern Miner. “In the past several years we’ve seen most of the major North American companies taking a look at the area.”

A number of junior companies are also active on earlier stage projects. For example, Inland Gold and Silver (NASDAQ) recently announced preliminary results of a recent exploration program on a 5,000-acre property adjacent to the Kettle River mine. The company manages the project which is a joint venture with N.A. Degerstrom (NASDAQ) and Pegasus Gold (TSE).

Inland Gold said three new targets were identified based on geologic structures, alteration and gold geochemistry. And it also noted that the most promising of these is just south of Echo Bay’s Lamefoot gold discovery.

“To date, extensive preliminary exploration has been conducted on this exciting project and we are extremely encouraged by these new developments,” stated Inland’s President Steven Potter. “Drilling is expected to commence in early 1991.”