Cominco and Redfern encounter fault zone

Drilling on the Tulsequah Chief project has encountered a clay-rich fault zone which will delay holes 28 and 29. Tulsequah Chief is a joint venture 60% owned by Cominco (TSE) and 40% owned by Redfern Resources (TSE). The property is on the Tulsequah river in northwestern British Columbia about 45 miles northeast of Juneau, Alaska.

The joint venture is drilling off a rich polymetallic deposit with holes 28 and 29 designed to test the downdip extent of the H Lens.

The H Lens is a massive sulphide lens intersected by holes 22 and 23 while the joint venture was testing the downdip extension of the AB Lens. Hole 22, the best of the two, returned a 164-ft. intercept grading 2.9% copper, 1.6% lead, 9.1% zinc, 0.11 oz. gold and 5 oz. silver per ton.

The fault zone was intersected approximately 800 ft. above the target depth and about 2,000 ft. below the underground drilling station on the 5400 level. If the problems cannot be dealt with, the holes will be re-drilled.

John Greig, president of Redfern, said clay problems have not previously been encountered, and therefore he would not expect any related problems in a future mining operation.

The results from holes 28 and 29 are greatly anticipated by the market after a number of previous holes (24, 25, and 26) failed to intersect the H Lens, encountering a dyke structure.

At recent presentation in Vancouver, management of Redfern outlined the drilling program and released a schematic of the company’s interpretation of the drilling results to date.

The interpretation shows a near- vertical feeder dyke to a diorite sill cutting up and through a portion of the H Lens.

The H Lens was intersected above and below the dyke by holes 22 and 23 respectively and Redfern is confident the structure continues to depth.

Greig said the deposit is believed to be of the Kuroko type, meaning it was formed at an eruptive centre on the bottom of an ocean floor. With a statigraphic control rather than a structural one, the likelihood of the lens continuing to depth is good.

A preliminary estimate of reserves on the project at the end of 1989 placed reserves in the AB Lens at about 5.2 million tons grading 1.6% copper 1.3% lead, 7% zinc, 0.08 oz. gold and 2.94 oz. silver.

If holes 28 and 29 successfully intersect the H Lens, reserves could increase significantly.

The joint venture’s next move has not yet been determined. Greig said the next step will be to either extend the 5400 drift further to the north to facilitate deeper drilling, or to “bite the bullet” and sink a shaft to below the 2600 level.

He said Cominco, which is the operator, has not yet determined if the program will continue through the winter, although the camp has been winterized.

If a shaft is called for, the cost would be about $12 million for an exploration shaft, or about $20 million for a full production shaft.

Greig said Redfern would most likely fund its share of the cost through an equity issue. He noted there should be little difficultly in raising the necessary funds since any such move by Cominco could be interpreted as a preproduction decision.

He said any further capital cost would be financed through a debt issue.

All such projections are, of course, simply “blue sky” until the result of holes 28 and 29 are received.