Neptune expands acreage around Colomac project

The Toronto-based company which is moving to new head offices in Vancouver, has signed a letter of intent with Petromet Resources (TSE) and Comaplex Resources (TSE) to earn a 60% interest in a 7,954 acre-claim group which extends south from Colomac.

With proven and probable reserves of 16.02 million tons grading 0.064 oz gold per ton, Colomac is scheduled to produce 200,000 oz annually when commercial operations begin early next year.

To earn its interest in the BAT-1, Ed-1 CDC and Span-1 claims, Neptune must spend $700,000 and pay $45,000 in installments over three years.

The western portion of the BAT-1 claim contains the southern extension of the Colomac dyke where Neptune’s No 2 and 3 zones will be mined as open pits. While Neptune has opted to use conventional carbon-in-pulp technology instead of vat leaching, cost per ounce are expected to be in the $205(US) per oz range which is low for such a northerly project.

Once Neptune has earned its interest, Petromet and Comaplex will convert their 40% interest in the western portion of the BAT-1 claim to a 3% to 10% net smelter return royalty. The royalty varies depending on the price of gold.

The agreement gives Neptune a 100% interest in an area which it says could be mined as an extension to the Zone 3 deposit. Zones 3, 2 1/2, and 1 were the targets of a 45,000 ft drill program designed to increase Colomac reserves. Results of the program will be announced within the next 10 days, according to Neptune sources.

Meanwhile, the company has begun to build a 10,000-ton-per-day milling facility which the company hopes will be used to attract joint venture partners in the region.

“If we enter into option agreements with people in the surrounding area the mill could come into play,” Neptune spokesman Steve Manz told The Northern Miner.

An all-weather road connecting the property to Rae/Edzo is expected to be ready by the end January. At that point, Neptune will start trucking equipment north to Colomac from Yellowknife.

“Mill construction is on schedule and we are starting work on our air strip,” said Manz who claimed that the various programs are going ahead despite temperatures which dip below -40 degrees C.

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