Westmin’s Pioneer leads Sulphurets into production phase

In early May, Westmin started tuning up the 2,200-ton-per-day mill at the Premier Gold mine north of Stewart.

The readily accessible mine is a joint venture held 50.1% by Westmin, 40% by Pioneer Metals (TSE) and 9.9% by Prime Resources (VSE). Tournigan Mining Explorations (VSE) has a 5% net profits interest after payback of pre-production costs.

The $92-million open pit operation is expected to produce 77,000 oz gold and 890,000 oz silver per year.

For August and September, Westmin reports the mill averaged 1,863 tonnes per day with grades averaging 1.7 g (0.05 oz) per tonne gold and 53 g (1.5 oz) per tonne silver. Recoveries are 90% gold and 50% silver.

“We poured our first dore gold on June 12 and have since poured a total of 6,119 oz gold and 104,169 oz silver to the end of September,” Bruce McKnight, vice-president of business developments, reports.

An extensive underground drill program to assess underground potential and to expand reserves in the two former producing pits has been completed and a decision on mining the higher grade underground material is expected shortly.

Underground drilling concentrated on the 4-G and 602 zones beneath the Premier pit, as well as on the smaller Power zone.

With open pit mineable reserves at the Silbak Premier mine of 6.5 million tons, averaging 0.063 oz gold and 2.34 oz silver per ton and another 1.9 million tons of 0.091 oz gold and 0.67 oz silver from the adjacent Big Missouri mine, the project has a 10-year mine life.

Plans are under way to include the SB deposit held by Tenajon Resources (VSE) in the Premier Gold mining operation. The property, four miles west of Westmin’s mill, has probable and possible reserves in two of its four zones of 308,000 tons, averaging 0.505 oz gold and 1.07 oz silver per ton (uncut). Both zones are open in at least two directions.

In a joint venture with Tenajon, Westmin has agreed to spend $2.4 million to bring the SB property into production by mid-1990.

The agreement, subject to completion of Westmin’s feasibility study, calls for SB reserves to be treated at the Premier mill at a guaranteed minimum rate of 330 tons per day with mill costs estimated at around $22 per ton.

Westmin can earn a 50% interest in the SB property and will take over as operator. Highlighting exploration in the Stewart area is the recent gold discovery by Bond International Gold (TSE) on its 100%-owned Red Mounta in property, 15 km east of Stewart.

The discovery consists of two steeply dipping gold zones — Marc and Brad — which intersect each other at an angle. Included in recent drill results were 216 ft averaging 0.28 oz (cut) gold and 1.4 oz silver per ton. Elsewhere on the claims, drilling on the Willoughby Gossan zone returned 67 ft grading 0.73 oz gold and 5.3 oz silver per ton (N.M. Oct 9/1989).

Bond, owned 65% by Lac Minerals (TSE), has staked or optioned nearly 225,000 acres in the Red Mountain area. Exploration will continue next spring.

Others planning drilling next season include Hyder Gold (VSE) which worked on its 800-acre Mineral Hill property. Hyder has a 52.6% interest in a joint venture with Mineral Basin Mining (47.4%). Preliminary ground work in 1989 identified drill targets for a planned $750,000 drill program.

East of Stewart, Prime’s Goodgold Resources (VSE) can earn a 60% interest in Teuton Resources’ (VSE) Max-Croesus property by spending $1 million over four years, making $200,000 in cash payments and issuing 200,000 shares. Goodgold completed a $50,000 airborne survey and groundwork in 1989. Sulphurets Camp

The major player in the nearby Sulphurets gold camp is Newhawk Gold Mines (TSE). The company has a 60% interest in a joint venture with Granduc Mines (TSE) on the Sulphurets gold-silver property.

A production decision on the 350-ton-per-day operation is expected early next year. A feasibility report written by Cominco Engineering is awaiting final reserve figures, being prepared by Watts, Griffis and McOuat.

A 23,000-ft underground drill program was completed this season which confirmed continuity of the West zone at and below the 1200 level. An additional 13,000 ft of drilling is under way, after which reserve calculations for the West, UTC and R-8 zones will be completed. Reserves in the West zone (in all categories) are 854,072 tons grading 0.354 oz gold and 22.94 oz silver.

Adjacent to the Newhawk/Granduc joint venture is the Kerr-Tedray copper-gold porphyry deposit recently bought by mining major, Placer Dome (TSE).

Placer Dome acquired Western Canadian Mining’s (VSE) 69% interest in Sulphurets Gold (VSE) and has completed an offer to purchase remaining shares from minority shareholders. Sulphurets Gold owns 100% of the Kerr deposit and has an option from Newhawk and Granduc to earn a 50% interest in the adjoining Tedray property. Placer Dome paid $7.26 million for its initial purchase of 7.46 million Sulphurets shares at 95 cents per share. Based on 1988 drilling, the property has geological reserves of 66 million tons averaging 0.86% copper, 0.01 oz gold, 0.06 oz silver per ton.

Drilling this season tested the deposit along a strike length of 5,250 ft, with the zone still open along strike and down dip. Width is estimated to be 600-800 ft. Drilling to the north has extended the deposit some 500 ft onto the Tedray property.

Placer’s corporate secretary John Eckersley says the company is in the process of analysing data from this season to determine exploration targets for 1990.

Calgary-based Catear Resources (VSE) is operating a 50-ton-per-day mill at its Goldwedge property, less than a mile from the Newhawk/ Granduc project.

The company is upgrading its mill to 100 tons per day and reports it has signed a contract with a custom smelter to deliver 3,000 oz of gold over three years.

Drill-indicated and inferred reserves in the Golden Rocket zone are reported as 319,149 tons grading 0.8 oz gold and 1.12 oz silver per ton. Drill-indicated reserves in the Discovery zone are 37,980 tons grading 0.63 oz gold and 1.08 oz silver per ton.

Other exploration in the belt includes work done by Echo Bay Mines (TSE) on the Doc gold property, held under option from Magna Resources (VSE). Echo Bay can earn a 50% interest in the property by spending $8 million over three years. About $3.5 million has been spent so far, mostly on underground development and drilling of the Q17 and other zones completed in late 1988.

After disappointing tonnage results, Echo Bay completed a $200,000 mapping program this season and plans to watch other players in the belt with an eye to examining possible massive sulphide targets on the 18,000-acre property. No further expenditures are required under the option agreement until June, 1990.

Granges Exploration (TSE) has spent about $1 million of a $3 million option to earn 50% in a 100,000 acre property owned 75% by Springer Resources (VSE) and 25% by Cove Resources (VSE).

Springer director Murray Pezim reports that Granges has identified a number of drill targets in what is believed to be the same geological strata as the nearby Calpine-Stikine project at Eskay Creek. Granges has winterized the camp and completed four holes in the current drilling program. Results are expected shortly.

With over 30 miles of claim holdings in the area, Vancouver junior Teuton Resources (VSE) has 12 properties optioned out and expects several more deals to be completed in the near future.

Five of the optioned properties have been placed with Prime Capital companies. Tantalus Resources (VSE) has an option to earn a 51% interest by spending $3.2 million on Teuton’s 35-sq-mi Treaty Creek property. Four gold zones have been identified. Two of these, the Goat Trail and the Boot, resemble zones being developed at the Newhawk/Granduc Sulphurets property, adjoining to the south. The Konkin zone and Goat Trail zone are targets of a c
urrent drill program.

]]>