Win-Eldrich resumes work on Nevada gold property

Win-Eldrich Mines has completed a preliminary feasibility study on its Ashdown gold property in Nevada and plans to start a 5,000-ft reverse circulation drilling program before the end of February.

Reserves on the Ashdown property, located in Humboldt Cty about 30 miles northwest of Amax’s Sleeper gold mine, stand at about 1.16 million tons grading 0.125 oz gold per ton within 200 ft of surface according to an analysis by a Denver consulting firm, Geostat Systems International. Those reserves are based on 50,000 ft of drilling in more than 200 holes by previous owners.

The reserves are contained primarily in two quartz veins which roughly parallel the ground surface and are central around what is believed to be a vent zone, the company says. Previous drilling on the vent zone intersected 14 ft grading 3.09 oz in one hole and 50 ft grading 0.54 oz in another hole.

The Ashdown property also contains a high grade molybdenum reserve of 146,000 tons of 2.9% molybdenite plus 600,000 tons of 1% molybdenite, all delineated by diamond drilling and drifting *

The Toronto-listed company says it has also renegotiated royalty terms with three of the four parties holding an interest in the property. The result of the complicated deal is that the royalty holder will receive a 7% net smelter return from gold production up to $1.35 million(US) at which point the nsr falls to 1%. The property will also be subject to a 2% nsr on molybdenum production up to $350,000 at which point the molybdenum nsr also falls to 1%. The molybdenum royalty is deductible from the gold royalty.

Win-Eldrich recently completed a private placement of 400,000 shares at 75 cents per share to net the company about $300,000. That money will be spent on the Ashdown property. The company has also raised $150,000 in a flow- through share financing, but that money will be spent on the company’s Fisher Islands gold project near Red Lake in northwestern Ontario.