Updated reserves estimate released for Eskay Creek by Vivian

Two separate geological reserve estimates were released this week for the 21 Zone deposits at the Eskay Creek project north of Stewart, B.C. Calpine Resources, project operator and 50% owner, released final estimates calculated by Toronto- based Roscoe, Postle and Associates, consulting engineers, which incorporate all holes drilled to mid- December. Calpine is now a wholly owned subsidiary of Prime Resources Group (VSE).

Equal partner Stikine Resources (TSE) independently commissioned Orcan Mineral Associates to prepare a separate reserve study which Stikine management said “more accurately reflects the potential of the deposit.” It uses different parameters than those used in the more conservative Roscoe, Postle and Associates study.

Using a 0.25 oz. gold cutoff, Roscoe, Postle and Associates estimate probable reserves of 965,000 tons grading 1.71 oz. gold, 46.8 oz. silver, 2.2% lead and 5.4% zinc for the 21B zone. When combined with reserves of 172,000 tons of 0.72 oz. gold and 6.9 oz. silver from the 21A zone, probable geological reserves total 1.13 million tons grading 1.56 oz. gold and 40.8 oz. silver. (Base metal values were not calculated.)

Possible geological reserves for these two zones total an additional 414,000 tons grading 0.74 oz. gold and 23.6 oz. silver per ton.

If a 0.1 oz. gold cutoff is used, probable geological reserves for both the 21B and 21A zones total 2.28 million tons grading 0.87 oz. gold and 27.6 oz. silver, with possible reserves representing an additional 891,000 tons of 0.42 oz. gold and 13.5 oz. silver.

Finally, at a 0.04 oz. gold cutoff, probable reserves for both zones total 3.68 million tons of 0.56 oz. gold and 15.2 oz. silver, plus possible reserves of an additional 1.85 million tons grading 0.25 oz. gold and 8.2 oz. silver.

A specific gravity of 2.76 was used in these calculations although it was noted that “a higher specific gravity can be expected.”

A minimum mining width of two metres was used and cutting of high gold values was deemed unnecessary by Roscoe, Postle and Associates “due to the high incidence and apparent continuity of high gold values occurring as a clustering rather than erratic distribution.”

The single exception to this was a small area called “21B Miscellaneous,” containing the now famous hole 89-109, where gold values were cut to 5.0 oz. gold. At a 0.25 oz. cutoff, this mineralized lens contains a probable reserve of 47,000 tons grading 0.79 oz. gold, 0.1 oz. silver, 1.2% lead and 2.1% zinc, plus a possible reserve of 94,000 tons of 0.79 oz. gold, 0.6 oz. silver, 1.2% lead and 2.1% zinc.

This study was based on drill results through to hole 89-025; however, some intersections were not incorporated into the calculations because drill spacing in some areas was not deemed sufficient to overcome concerns regarding continuity and hole-to-hole correlation.

But Calpine stated that numerous excellent drill hole intercepts from 1990 drilling “should add probable and possible reserves to the deposit.”

The independent study commissioned by Stikine calculated reserves for five zones on the basis of geology as follows; andesite- hosted (hangingwall) mineralization; contact argillite-hosted mineralization; footwall rhyolite-hosted mineralization; other rhyolite- hosted mineralized and dacite- hosted mineralization.

At an 0.050 oz. gold equivalent, reserves in all categories were estimated to total 7.92 million tons of 0.51 oz. gold and 12.05 oz. silver. Potential open pit reserves, which Stikine said would be restricted to the first three zones listed above, are calculated as 6.49 million tons of 0.54 oz. gold and 14.13 oz. silver in all categories.