Westmin signs Tenajon agreement to develop SB

It has taken longer than expected, but Westmin Mines (TSE) and Tenajon Resources (TSE) recently announced the closing of a joint venture agreement for ongoing development of Tenajon’s SB gold property, near Stewart, B.C. The amended agreement allows Westmin to earn a 50% interest in the property by spending a total of $2.79 million. If all expenditures are not completed, Westmin would not earn any interest in the property, although Tenajon would retain access to Westmin’s Premier mill for processing 119,000 tons of SB ore per year at preferred rates.

The SB property is reported to contain reserves totalling 308,000 tons grading 0.5 oz. gold and 1.07 oz. silver per ton in two of five known zones of mineralization. The SB property, accessible by road, is between the Big Missouri and Premier mines which together make up Westmin’s 50.1% owned Premier gold project.

Now that the agreement between Westmin and Tenajon has closed, it is hoped that the processing of higher-grade reserves from SB will benefit the overall economics of the Premier gold project. As it stands now, operator Westmin and its joint venture partners have yet to achieve profitable operations.

Westmin has already made a $172,500 payment to Tenajon, and it has started earn-in expenditures effective Sept. 15. A drill program using three rigs is already in progress. Some 6,700 ft. of surface drilling and 9,000 ft. of underground drilling are expected to be completed in this phase.

Westmin’s program is expected to advance the project to the preproduction stage and include the completion of a feasibility study and production permitting. Once this work is completed, the partners expect to use the 2,000-ton- per-day Premier mill for processing SB ore at a guaranteed throughput of 119,000 tons per year.

Tenajon recently completed a 16- hole surface drill program and 11 underground holes. The company said the program was successful in extending and confirming the continuity of the Kansas and West Kansas zones.

Selected results from surface drilling include: 16.4 ft. of 0.6 oz. gold and 0.43 oz. silver; 16.4 ft. of 0.65 oz. gold and 0.52 oz. silver; 13.1 ft. of 0.29 oz. gold and 0.72 oz. silver; 18.0 ft. of 0.16 oz. gold and 0.23 oz. silver; and 6.6 ft. of 0.35 oz. gold and 1.88 oz. silver.

Results from underground holes are: 13.1 ft. of 0.18 oz. gold and 0.26 oz. silver; 3.3 ft. of 0.13 oz. gold and 0.25 oz. silver; and 3.3 ft. of 0.2 oz. gold and 0.12 oz. silver.