Rayrock, Inter-Rock strike deal for Daisy

Joint owners Rayrock Yellowknife Resources (TSE) and Inter-Rock Gold (ME) have agreed on a financing arrangement for their Daisy gold project near Beatty, Nev.

Rayrock will lend US$3.5 million to Inter-Rock so that it can fund its share of the US$6.1 million in development costs.

In return, Rayrock will acquire an additional 10% working interest in the project, thereby increasing its total share to 35%. Inter-Rock’s share will fall to 65%.

The loan is repayable in minimum quarterly instalments starting in 1997.

The Daisy project comprises several deposits on an 11-sq.-mile property. The principle deposit is the Secret Pass, which has minable oxide reserves of 11.4 million tons averaging 0.018 oz. gold per ton.

Development will begin next March, with heap-leaching expected to get under way by late 1996 at a rate of 2 million tons per year. Annual production from oxide reserves is projected at 30,000 oz., while the average cost per ounce pegged at US$270. The mine is expected to operate for six years.

In other news, Rayrock has completed three of 10 planned holes that are intended to test deep sulphide targets at its Dee gold mine in Nevada.

The first hole, 9501, collared 1,000 ft. south of the Dee pit and drilled to a depth of 1,996 ft., cut the Dx zone at a depth of 220 ft. and assayed 0.05 oz. gold over 40 ft. In addition, the hole cut the Roberts Mountain Formation target from 1,100 to 1,400 ft. However, neither mineralization nor alteration was encountered.

The second hole, 9502, was collared 900 ft. west of the Dee pit and drilled to a depth of 2,596 ft. The hole was designed to intersect the downdip projection of the Dee fault structure below the Roberts Mountain Formation. It intersected about 1,000 ft. of silicification and sulphide mineralization at a downhole depth of 900 ft. Nevertheless, only trace gold values were reported. Rayrock concludes that major faulting has occurred between the hole and the west side of the pit, with the western block having a down-fault displacement of more than 1,000 ft.

The third hole, 9504, was collared 500 ft. of the North Extension pit and drilled to a depth of 1,707 ft. Only low-grade gold values were encountered.

Rayrock is currently drilling Hole 9505 in an area 3,500 ft. west of the Dee pit, and Hole 9503 southwest of 9502. Hole 9503 was drilled to a depth of 800 ft. using a rotary rig and will be completed when 9505 is finished.

Rayrock will also drill four additional rotary holes, two of which will test for mineralization along projected downdip extensions of high-grade sulphide mineralization intersected previously at the bottom of the Dee pit. These intersections averaged 0.335 oz. over 65 ft., 0.75 oz. over 95 ft., and 0.32 oz. over 65 ft.

Two other holes will be drilled in the North Extension pit so as to test for mineralization in structures below the Deep North deposit. The location of the 10th hole will be determined by future drill results.