A Canadian subsidiary of ASARCO (NYSE) recently entered into an agreement to earn a 50% interest in Eureka Resources’ (VSE) Frasergold property in central British Columbia. Under its terms, ASARCO is required to spend $1.4 million on the property this year and up to $2 million in each of 1991 and 1992. The company will earn its interest on completion of a feasibility study and a decision to place the project into commercial production.
The Frasergold property — which has potential for both open pit and underground gold reserves (possibly in a stratabound setting) — was tied up for the past several years by a recently resolved legal dispute involving Eureka and a former joint venture partner.
According to Jack O’Neill, president of Eureka, the 10,000-acre Frasergold property near Williams Lake has “preliminary geological” reserves estimated at 20 million tons grading 0.06 oz. gold per ton. The drilling done on the property to date has been over a 1.5-km strike length to a depth of 150 metres.
The objective of this year’s program, to be managed by Eureka, is to upgrade reserves to the minable category and explore the full length of a geochemical anomaly which extends for 12 km.
The program is aimed at outlining reserves that can be mined by open pit methods and higher grade underground reserves that could be mined by bulk-mining techniques.
This year’s program will consist of 4,000 metres of HQ diamond drilling and 4,000 metres of reverse circulation drilling. A 4.5-tonne bulk sample will also be collected from an existing underground adit for metallurgical tests.
O’Neill said the coarse particulate nature of the gold mineralization makes it necessary for a bulk sample to be taken to establish grade and a reliable estimate of gold content within the deposit.
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