Wheaton River nabs Red Mountain

North American Metals (NAM-V), which is 89%-owned by Wheaton River Minerals (WRM-T), has agreed to buy the Red Mountain gold project of defunct Royal Oak Mines for $413,360.

Situated in northwestern British Columbia, Red Mountain hosts 12 million tonnes grading 2.54 grams gold per tonne. The estimate is based on 127,000 metres of drilling and 2,000 metres of underground workings, including a 1,000-metre-long decline, completed by Royal Oak and previous operators Lac Minerals and Barrick Gold (ABX-T).

The resource is characterized by northwesterly plunging mineralization in three southwesterly dipping elliptical zones formed in stratified sediments and an intrusion. The host rocks and mineralization are cut by northwesterly plunging folds and brittle faults.

Wheaton notes that a higher-grade core of 700,000 tonnes grading 12 grams gold per tonne may be feasible at a gold price of US$300 per oz. The ore would be mined over 4-5 years, and geostatistical studies suggest it requires little or no follow-up drilling to prove up. A feasibility study will begin immediately after the deal closes, later in January. The study will consider the viability of relocating a mill at the company’s seasonal Golden Bear mine, also in northwestern B.C. Startup is slated for 2002.