Following a major corporate restructuring and asset sale last November, Citadel Gold Mines (TSE) plans to conduct a small exploration program this year on its claims around the Surluga gold deposit at Wawa, Ont. About $400,000 will be spent by Citadel this season to explore the Parkhill and Dunraine properties, one mile south of the Surluga mill along a major structural shear zone.
Both properties host past gold producers (1920s), and a geochemical soil survey has identified new targets for follow-up by trenching, the company says. A preliminary mapping program has also located a previously undetected shaft on one of the properties. A program of geological mapping, prospecting and drilling is planned for this spring on the claims.
The company is seeking a joint venture partner to explore its 24 claims in Rimouski Cty., Que., which were staked on the basis of lead anomalies detected by the Geological Survey of Canada. Preliminary follow-up of the anomalies was carried out in 1989, with one heavy mineral sample yielding an assay of 0.17 oz. gold per ton.
As a result of last year’s restructuring, most of Citadel’s assets are now held by Citabar Limited Partnership, a 50/50 partnership with Citadel as the general partner and Bernard Sherman, the company’s major shareholder, as the sole limited partner.
Citabar is raising funds for exploration by selling 10 houses in Wawa as well as surplus mining equipment.
Pan Orvana, a private exploration company whose major shareholder is Rio Algom (TSE), is exploring the open pit gold potential of the 30-claim Surluga property, where the underground reserves would need a gold price of at least US$450 to be economic. Pan Orvana can earn a 100% interest in those claims.
Meanwhile, Citabar is also seeking sources of high-grade gold ore to feed the Surluga mill. Utilization of the mill is being discussed with several local operators with small, high-grade gold deposits.
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