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TABLE OF CONTENTS Aug 28 - Sep 3, 2000 Volume 86 Number 27 - 0 comments

Redhawk revisits Reeves MacDonald

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By: THOMAS SCHUSTER
2000-08-28
With its eye on the zinc oxide potential of the past-producing Reeves MacDonald and Annex mine properties, Redhawk Resources (RDK-V) has spent the past five years assembling a large land package that covers most of the old production areas, 35 km southeast of here.

The claims are about 20 km south of the town of Salmo, just north of the Canada-U.S. border. The main property is divided by the Pend D'Oreille River, and the western portion of the claim group is accessible by paved road for 23 km south from Trail to the Seven Mile dam, followed by an additional 12 km of logging and mining roads. The eastern portion of the property is accessible by 7 km of gravel road, starting at the Nelway border crossing.

Topography is moderate to steep, with elevations ranging from 1,700 ft (above sea level) at the river to 5,200 ft. along the western ridge. Power and rail connections are readily accessible, and Redhawk says there is nothing to prevent mine development from resuming.

The properties comprise 4,432 ha, including 315 ha optioned in February from privately owned Reeves MacDonald Mines. The properties were purchased for $1.9 million, to be paid over four years (initial payment: $150,000). Reeves MacDonald is required to take down a private placement in Redhawk of 250,000 shares at 40¢ per share.

Also, Redhawk has optioned a half-interest in its combined Redbird-Reeves properties to London-based ZincOx Resources for $3 million, to be paid over four years. Under the agreement, ZincOx is required to subscribe for a private placement of 500,000 units priced at 40¢ each. ZincOx currently holds 31.3% of Redhawk on a fully diluted basis.

Last November, Redhawk struck a similar deal with Billiton whereby Billiton was required to put up the $1.3-million purchase price and option up to 70% of the Remac project by spending at least $6 million. That deal fell apart at the last minute, when Billiton decided the project was not large enough to warrant economic development.

Redhawk says it optioned the depleted Reeves-MacDonald-Annex mine properties because it believes new beneficiation technology will allow economic exploitation of the oxides on the Redbird and Reeves claims.

Trench results

Redhawk recently tabled trench results, as part of the company's $400,000 summer exploration program at the Remac zinc oxide project. About 130 channel samples were collected from three zones dubbed A, B and C.

On a recent visit to the property, The Northern Miner learned from Andrew Woollett, managing director of ZincOx, that the objective of the current program is to establish the continuity the Redbird zone, as well as the Annex zones.

Mineralization at the Remac property consists of a series of carbonate-hosted base metal deposits that extend over 3 km along a southwesterly trend. This year's targets are the upper portions of the zones dubbed A, B, C, F, G and H. Zones A, B and C are believed to represent faulted offsets of the Redbird oxide deposit, whereas zones F and H are thought to represent the oxide portions of the Annex deposit. Zone G is most likely the oxide portion of the Annex West deposit.

Highlights from trenching are as follows:

Trench B-1, the most easterly trench, in zone B, cut a true width of 6.5 metres along the hangingwall and averaged 6.61% zinc, 1.3% lead and 5.9 grams silver per tonne. Along the footwall, trenching returned 6.3 metres (true width) averaging 18.89% zinc, 2.2% lead and 23.4 grams silver.

Trench B-5, 100 metres west of trench B-1, did not hit bedrock, though it did encounter several high-grade zinc-bearing boulders ranging in size from 10 cm to 1 metre. Representative samples from five boulders assayed between 17.6% and 33.9% zinc.

Zone C is about 150 metres northeast of zone B. Redhawk dug two trenches, which produced encouraging results. For example:

Trench C-1 intersected an estimated true width of 21 metres grading 6.32% zinc, 1.62% lead and 10.42 grams silver;

samples from the hangingwall averaged 5.6 metres grading 9.24% zinc, 2.73% lead and 19.09 grams silver;

the central section of the trench yielded 11 metres grading 2.96% zinc, 1.17% lead and 3.35 gram silver; and

the foot wall section hit 4.4 metres grading 10.97% zinc, 1.31% lead and 16.45 grams silver.

Trench C-2 is about 20 metres east of, and downhill from, trench C-1. Average assay results from this trench were 18.1 metres grading 8.39% zinc, 1.22% lead and 8.66 grams silver.

Redhawk recently kicked off a 2,600-metre program of reverse-circulation drilling, targeting zones B, C, F, G and H. The junior plans to collar four holes in the B zone, three holes in C, five holes in F, four holes in G, and eight holes in H.

"We are delighted at the progress that is being made here at Remac," said Woollett. "I believe we have a solid project, with great upside on the exploration front."

History

The Reeves MacDonald mine and the adjoining Annex property were major producers of lead, zinc, silver and cadmium. Mine production lasted 26 years, until 1975, when operations were suspended as a result of low metals prices, property boundary limitations and increasing government taxation.

The original claims were staked in 1910, and initial development began in 1925. By 1929 the Point, Reeves, MacDonald, Odonnell and Prospect deposits had been discovered. Mine construction began in 1947, and a 500-ton-per-day flotation mill was constructed in 1949. In the following year, the mill capacity was expanded to 1,000 tons per day.

By 1971, the known reserves at the Reeves MacDonald mine were largely depleted, but production continued at the Annex mine, developed in 1969 to exploit the newly discovered Annex zones.

Between 1949 and 1971, the Reeves MacDonald operation milled 6.4 million tons grading 3.5% zinc, 1.39% lead, 0.02% cadmium and 0.1 oz. silver.

Production at the Annex mine, between 1970 and 1975, totalled 841,410 milled tons grading 5.59% zinc, 0.93% lead, 0.03% cadmium and 1.30 oz. silver.

In the early 1960s, Cominco (CLT-T) started to develop underground access to the Redbird zone, and, while searching for deep sulphide mineralization, encountered extensive oxidized mineralization beneath the oxidized surface showings. This zone graded 18.5% zinc and 6.5% lead along a length of 600 ft. and across a thickness of 20 ft. Through trenching and drilling, Redhawk intends to upgrade this and other steeply dipping mineralized zones to the status of resources and reserves.

The project is in the Kootenay Arc belt, an arcuate north-trending belt of deformed sedimentary, volcanic and metamorphic rocks that extend from the northeastern part of Washington state to near Revelstoke B.C., a distance of about 400 km.

Numerous lead-zinc deposits are hosted along the Kootenay Arc in a Lower Cambrian-aged carbonate rock unit known as the Reeves Member, a limestone that ranges from finely crystalline to locally massive. The origin of these deposits has been postulated as either Mississippi Valley-type or sedimentary-exhalative.

Rocks in the Remac property area dip moderately to steeply to the south, the dominant structural feature being a tight syncline fold that strikes to the west. The fold structure disappears under overburden and younger over-thrust sediments as one moves to the western side of the property.

A series of north-trending normal faults dips 45° to 65° degrees to the east and cuts the carbonate rocks. This has resulted in a down-faulted repetition of stratigraphy, which is believed to continue beneath the argillite and overburden to the west.

Large lozenges

George Gorzynski, consulting geologist for Redhawk Resources, described the mineralization of the sulphide bodies at the Reeves-MacDonald mine as "large, elongated lozenges that are typically 600 ft. long and 60 ft. wide and that continue down-plunge forever."

Four distinct zones of mineralization were mined at the Reeves MacDonald-Annex mine -- namely, Reeves, Annex, Annex West and Red Bird. All of these deposits are repeated to the west through normal faulting and are reported to have considerable down-plunge continuity.

"The Reeves zone, which is well-defined, can be traced down to a depth of 9,000 ft. down-plunge and remains open at depth," said Gorzynski.

An unusual feature of the Redhawk property is the intense oxidation of most of the zones, which varies from no oxidation in the original Reeves deposit to more than 1,500 ft. of oxidation in the Red Bird zone. Within the oxidized zones, the sulphides have been completely leached, leaving limonite with enriched values of zinc, lead, cadmium and silver.

The presence of these extensive oxide zones was a disappointment to the early explorers, who primarily targeted sulphide mineralization.

Recent changes in smelter techniques coupled with advances in metallurgical systems spurred Redhawk to take a second look at the recovery potential of these oxidized metals.

ZincOx

The management of ZincOx were affiliated with African-based Reunion Mining, which held a 60% interest in the Skorpion deposit in Namibia (19.5 million tonnes grading 10.1% zinc). Reunion demonstrated that this deposit's zinc oxide ore could be profitably mined using recently developed oxide leach technology. Anglo American took over Reunion in a deal valued at about $90 million. Subsequently, ZincOx was formed in order to acquire and develop other zinc oxide deposits thought to be sub-economic because of their metallurgy.

ZincOx is an unlisted British company based in London with a metallurgical office in Belgium. The company's major shareholder is Cominco, which holds a 24% interest; management and related parties hold a further 37%, with the balance held by private European financiers.

Over the past three years ZincOx has undertaken a global search for zinc oxide deposits. In the process, it has signed agreements with Redhawk Resources and obtained an interest in the Jabali deposit in Yemen, which is estimated to contain about 6 million tonnes grading 11% zinc. ZincOx also holds interests in the Lanping deposit in China and the Angouran deposit in northern Iran.

Oxide leach technology

Most zinc comes from material containing zinc sulphides, such as sphalerite. However, some deposits are characterized by non-sulphide minerals, such as zinc-oxide, zinc-carbonate and zinc-silicate -- these are collectively referred to as "oxides" regardless of their chemistry.

The zinc hosted within these oxides is susceptible to liberation through a process known as "direct leaching." The process involves exposing the oxides to dilute sulphuric acid in order to release the zinc into solution. The solution is then purified to the extent that it can be subjected to direct electrowinning.

Direct leaching involves fewer process steps than conventional sulphide treatment, and, as a result, operating costs are generally lower. For example, since the process does not rely on remote smelters, transportation costs are eliminated. However, direct leaching does require that a mine and refinery be built on-site, and so capital costs can be high, at least in comparison with stand-alone operations.

Among the concerns raised by direct leaching are high acid consumption and mineralogical complexity.

"The leaching may be relatively straightforward, but there is a huge amount of impurities that are not found in a conventional concentrate, such as calcium, magnesium and chlorine," said Woollett. "These can cause serious problems in the tank house. The process requires a certain amount of tweaking to optimize recoveries."

He explained that when ore with a high silicate content is leached, it goes into solution and is extremely unstable. When the solution is neutralized to precipitate the iron and aluminum, silica gel is also precipitated.

"The problem is that you cannot filter a gel, and therefore you cannot purify the electrolyte," said Woollett.

An unconventional electrolyte is used at the electrowinning stage, and unless the process is monitored closely, a build-up of impurities can form in the electrolyte and hinder recoveries.

Leaching potential

In 1995, Redhawk commissioned Fluor Daniel Wright to perform a preliminary metallurgical scoping study on the Remac oxide material. The study stated that, subject to confirmatory tests, an oxide leach model similar to that used at the Padaeng deposit in Thailand appears to be technically feasible for recovering zinc and cadmium. It also stated that the process would allow for the production of a zinc sulphate material for on-site production.

Fourteen years earlier, in 1981, Padaeng Industry constructed the first zinc refinery in Thailand. The ore was fed from the Mae Sod oxide zinc silicate deposit, 400 km north of Bankok. Using acid leach technology developed by Belgium-based Societé de la Vieille-Montagne, the project was brought into production in 1985 with a designed output rate of 60,000 tonnes of refined zinc per year. Reserves have since been depleted, and the operation is now closed.

Redhawk states that the Padaeng material appears to be quite similar to that of Remac. In both cases, the material is totally oxidized and the main zinc mineral is hemimorphite, a hydrated zinc silicate that contains 67.5% zinc, 25% silica and 7.5% water.

At Padaeng, about one-third of the zinc values were contained in smithsonite, a zinc carbonate. In 1992, a mineralogical study of a bulk sample taken from the Beer Bottle zone (a portion of the Redbird zone) identified the main constituents of the Remac ore as 40% limonite, 58% hemimorphite and 2% carbonate.



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Photos

Visitors examine a trench at the Red Bird zone on the Reeves MacDonald property in southeastern British Columbia.
Visitors examine a trench at the Red Bird zone on the R...
Vol. 86 No. 27 Since 1915	NORTH AMERICA'S MINING NEWSPAPER	AUGUST 28-SEPT. 3, 2000  $1.95
Vol. 86 No. 27 Since 1915 NORTH AMERICA'S MINING NEWSPA...

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Cominco Ltd
Redhawk Resources Inc


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