US$8-million deal for Jones Hill

A work program to include at least 10,000 ft. of diamond drilling is under way on the Jones Hill property in New Mexico, a volcanogenic massive sulphide project acquired earlier this year by Champion Resources (VSE).

This year’s US$500,000 program is being funded by Western Mining which holds an option to earn a 70% interest by spending US$7 million on exploration by early 1997, and making cash payments to Champion totalling US$975,000. Once vested, Western is to provide all costs attributed to Champion’s 30% interest until production begins.

The Jones Hill deposit contains two separate steeply dipping bodies — an upper subcropping zone and a lower zone that has been down-faulted some 1,800 ft. below surface. The deposit is hosted by Proterozoic greenstones and is considered to have geological similarities to deposits found in the Flin Flon camp of Manitoba.

More than US$13 million has been spent on the property by previous operators that worked the property from 1974 to 1991. Most of this work was focused on the upper zone which has been explored by 36 holes and some underground workings.

Mineralization in the zone is interpreted as being a metamorphically stretched feeder pipe which occurs en echelon to the fault-dislocated lower block. Preliminary reserves in the upper zone are reported as about 2.5 million tons grading 1.2% copper, 1% zinc and 0.1 oz. gold per ton, amenable to low-cost bulk underground mining.

Situated in forested hills, the topography of the property is such that the lower zone could be reached by a decline, and the upper reserve from an internal incline.

Champion director Rick Bailes said the prime exploration target is the lower zone which so far has only been tested by a line of eight holes. This massive sulphide target is up to 50 ft. thick, extends at least 1,400 ft. downdip to the limit of drilling, and is open to the east. Grades average 1-4% copper, 1-8% zinc, and 0.02-0.05 oz. gold per ton.

“The lower block has potential for a large deposit with higher copper grades,” Bailes said.

Champion recommends deep holes be drilled to test the down-plunge area of the lower block where gross metal values and copper-to-zinc ratios increase, as well as down-the-hole geophysics to get more information on the massive sulphide body.

The company also hoped to test the upper block for “stand-alone” and bulk minable reserves, as well as a systematic surface exploration of the Jones Hill belt using geophysics, geochemistry and geology. The belt is considered prospective to host other deposits.

Western’s 1992 program will consist of linecutting, geophysical surveying and geochemical sampling to be followed by drilling at the end of July.