Ongoing exploration at the Brewery Creek project near Dawson City, Yukon, could increase the property’s reserve base by as much as 25%, says Ron Netolitzky, director of Loki Gold (VSE).
Speaking at a recent information session in Toronto, Netolitzky told the Bay Street crowd that although Loki believes current reserves would support a profitable heap leach operation, 51% partner Hemlo Gold Mines (TSE) is looking for a deposit containing at least 2-3 million oz. gold. Based on an independent reserve study, Loki reports reserves of 17 million tons averaging 0.055 oz. gold per ton in nine separate deposits. About 70% of these reserves lie in the heap-leachable oxide category.
Despite winter conditions in the Yukon, a crew from Noranda Exploration is currently on site running geophysical (IP) survey lines to the east and west of the known reserves. Drilling should be under way by May.
Using oxide reserves of 12 million tons grading 0.058 oz. per ton and a gold price of US$350, Loki calculates the project could be put into production at an estimated capital cost of $22 million. President Ken Carter adds that with 24 hours of daylight and minimal precipitation, conditions in the Dawson City area are ideal for a 200-day-per-year heap leach operation.