Formal approval has been received by Newhawk Gold Mines for an underground decline at its Sulphurets property in northwestern B.C. As expected, Lacana Mining has agreed to fund its share of the project, which will bring to $2 million the amount of money they have spent there so far.
That total will earn the two companies a 60% interest, at which time Granduc Mines will have to decide whether to fund its 40% share or be reduced to a royalty interest.
According to Fred G. Hewett, vice-president exploration for Newhawk, the decline was actually collared before approval was given and he says the 1,200-ft-long mine working will earn them that 60% interest.
A 20,000-ft drill program, which is also under way, will be increased “in light of the success encountered to date,” he adds. The program will be funded partly by a grant under the provincial government’s FAME program. Newhawk received $100,000 under the program and Lacana Mining $45,000, a report from the B.C. Ministry of Energy, Mines and Petroleum Resources states.
The 8-ft-by-9-ft decline will be driven at 15% by Newhawk which, through its relationship with Northair Mines, has extensive underground experience and expertise. When the trackless decline reaches the target horizon, sub drifts will be put into the zone and additional drilling completed.
Lacana’s chief geologist, Lee Barker, admits he is “optimistic we will find the threshold tonnage and grade” needed for a production decision. But he notes the target areas require extensive drilling, given the fact they are wide stockwork vein systems with high grade sections.
The West zone outcrops at surface and the bulk of the drilling to date has been above the 500-ft horizon although the current program is testing below that elevation. The stockwork is highly silicified and the epithermal vein system is related to a major structure which crosses the property.
The zones are from 6.5 ft to 25 ft wide and the top portion of the West zone is possibly open pitable but “not a large portion,” he confirms. The ramp which could eventually serve as a production route is being driven in the footwall of the deposit and should be completed by the end of November, Mr Hewett says.
Granduc has until the end of January, 1987, to make its decision to participate as a working interest partner. But Newhawk and Lacana will probably have to know Granduc’s decision in advance of that date in order to continue the program past the $2-million mark.