Queenstake makes new acquisition

Further to the company’s move away from placer mining, Queenstake Resources (TSE) has acquired a number of claim blocks in Pershing Cty., Nev., which include the Snowsquall and Doc properties. As a result of reconnaissance mapping, soil, and rock chip sampling conducted in June, 1989, Queenstake staked a block of 34 claims and began negotiations to purchase other claims in the area, the last of which was completed in early March of this year.

The claims will be subject to escalating option payments and a net smelter return of 4%. The Doc property has a slightly higher NSR at 7.5%, escalating to 15% after payout.

The company’s preliminary exploration program yielded assays as high as 1.57 oz. gold per ton within what is described as a hot spring siliceous sinter and highly altered rhyolite tuff. This, coupled with evidence of widespread hydrothermal alteration associated with gold-bearing silicic stockworks, leads the company to believe that the property has very good potential as an open pit, heap leach target.

The area was the object of a number of small operations in the past but no one has been able to put together the entire land package.

Gordon Gutrath, president of Queenstake, expects to announce plans for this season’s program shortly, along with the complete results of last year’s work. He noted that a number of drill targets have been identified and drilling will likely start by June.

Also as part of its efforts to move away from placer mining, Queenstake sold a large portion of its mining equipment and will likely only be operating one placer operation this season. As a result of the sales, the company has eliminated all its debt and has a working capital position of about $1 million.

The Moyie River placer operation in southeastern British Columbia will operate this year but is expected to run out of reserves by year-end. Queenstake is looking to farm out or sell its remaining placer operations in northern British Columbia and the Yukon.

Gutrath noted that the company’s main thrust in 1990 will be with the new property and the Buckskin National in Humboldt Cty., Nev.

The Buckskin is a joint venture with Asarco (NYSE) which Queenstake has earned a 60% interest. The property hosts an epithermal gold system with reserves in all catagories of 138,000 tons grading 0.36 oz. gold per ton. Although the company plans to work on the property this year, Asarco has elected not to participate and its interest will be diluted.