Cominco back into gold

Describing the calculation as “fairly conservative,” Cominco Ltd. President Robert Hallbauer says he is “pretty enthusiastic” about the reserve inventory established for the company’s snip property in northwestern British Columbia.

Vancouver-based Delaware Resource has been funding work on the property and Cominco, the operator, can back in for 60% at feasibility. Inferred reserves are currently 1.2 million tons grading 0.75 oz gold, representing over 800,000 oz of recoverable metal and probably one of the largest untapped gold reserves in western Canada. The reserve has been diluted by 20% and values have been cut to approximately 4.3 oz.

In the recent past Cominco has tended to emphasize “core business activities,” namely base metals (zinc, lead and copper) with little reference to gold. The company sold its Con gold mine at Yellowknife and put its Buckhorn mine in Nevada into Cominco Resources International, which incidentally has been getting most of the headlines lately on the exploration front.

But Hallbauer emphasized to The Northern Miner that Cominco’s core business is “mining” which involves several commodities including gold. Indeed, Cominco has been actively exploring for precious metals in Canada and Alaska with at times impressive results. The snip project is just one example and he confirms “it looks very good, has a nice grade and there are no blank holes within the zone.” Dr William Wolfe, Cominco’s exploration manager for western Canada, says the reserves are classified as drill-inferred because the “spacing isn’t good enough for drill- indicated.” Spacing was halved this year to approximately 165 ft and he is confident they have been “matching up the right things.” Drilling intermediate holes between the fences was next to impossible because of topographical considerations including a 35 degrees -45 degrees dip on the hillside.

Cominco’s project geologist, Ron Nichols, says the Twin zone has the best continuity and correlation between holes. Drilling was at right angles to the shear/vein structure which only outcrops at three locations because of overburden. The steep hillside is heavily treed which has prevented overburden from migrating down to the valley floor; but the soils give a very good geochemical response which has enabled them to isolate prospective gold-bearing areas. Several mineral types

Several mineral types have been encountered including calcite, pyrite, quartz, biotite, and chlorite; but the gold can be associated with any one of these, he claims. The gold appears to be free milling and at this point no metallurgical problems are anticipated. Arsenopyrite has been noted locally but he confirms it is not widespread. Most of the gold occurs at sulphide margins or in gangue.

Cominco had approximately 40 people at one site this season and completed about 46,000 ft of drilling in 73 holes. Most of these (two- thirds) were on the main trend but some drilling was also done outside the Twin zone. Several good intersections were returned in parallel structures but they didn’t have the continuity of the Twin zone.

An underground program is planned next year and work could get under way in February or March. The purpose of the program is to confirm the continuity and grade of the deposit through lateral and inclined development. “This underground phase will answer a tremendous number of questions,” says Nichols.

The 325 level, which is approximately 1,000 ft above sea level, could be the location for the adit, he adds. Drill stations would be cut out and the lower reaches of the zone would be tested. A haulage level could be established at the 150 level near the valley bottom which will ease access to the mine and allow gravity to work for them in the event production is feasible.

Delaware President Ronald Netolitzky confirms his company has already spent $3.5 million on the project and believes it will take a similar amount to reach feasibility in 1988. The program will be funded through a one-million-share private placement at $5.50 with Toronto-based Western Goldfields. There are also one million warrants attached which are exercisable within a year at $7. The Skyline project is about 2.5 miles from the snip.