Chevron still operator BYG could revive Mt. Nansen

The old Mt. Nansen gold mine near Carmacks, Y.T., could resume production later this year on an open pit basis now that majority ownership is being acquired by BYG Resources.

A wholly-owned subsidiary, Nansen Mining Corp., has agreed to purchase a further 31% of the property (bringing its total interest to 69%) from Chevron Minerals. Byg, which had right of first refusal on the interest, has agreed to spend $3.2 million there over a maximum of two years. Chevron’s budget for the project was limited and byg President Thornton Donaldson now believes work will be accelerated by “condensing the planned expenditures into one season.”

Despite its minority interest, Chevron will continue to operate the project — at least for this year, Donaldson confirms. Archer Cathro & Associates of Whitehorse manage all of Chevron’s exploration projects in the Yukon.

Exploration will involve detailed drilling of the Brown McDade zone, a surface oxide deposit with reserves of 800,000 tonnes grading 0.23 oz gold and 1.0 oz silver. “Pit design, additional metallurgical and leach tests and government permitting work will be conducted with the objective of having the deposit ready for production by the fall of 1988,” he says.

The work will be funded through byg which doesn’t anticipate any problem raising the $3.2 million. “I just came back from London a couple of weeks ago and I know I can raise the necessary funds there. And there are a couple of big flow- through companies who said they will give us the money,” Donaldson adds.

Production from Brown McDade would be from vat or heap leaching or a combination of both, he confirms. The old Mt. Nansen mill could be used eventually for conventional milling of underground reserves which are generally refractory. But he expects it will take 1 1/2 years or more to get the underground into production. The primary crushing circuit is still in good shape and would be ideal for a vat leaching operation or a heap leach recovery plant.

“The main idea is to get the Brown McDade into production. It will throw off a substantial cash flow and we can use that to develop the rest of the surface deposits and also get the underground into production.”

Donaldson estimates it will cost $3 million maximum to achieve production. Based on a mining rate of 200,000 tons per year, output would be 46,000 oz gold and 200,000 oz silver. At least seven other deposits exist on the property which could increase precious metals output in subsequent years.

The company expects to get back into the property in late May and it would like to drill off the Brown McDade in less than a month. “I think it’s a pretty significant development. We will have the thing in production this year rather than three years down the road if Chevron was still looking after it,” he points out.