Reserve potential grows for Red Chris

Pleased by the success of drilling to date at the Red Chris copper-gold porphyry project in northwestern British Columbia, American Bullion (VSE) and Teck (TSE) have decided to step up their efforts.

The joint-venture partners will expand the current program to at least 100,000 ft. from the previously planned 70,000 ft.

American Bullion holds an 80% interest in Red Chris, while Teck holds a 10% participating interest and a 10% carried interest. Upon delivery of a prefeasibility study, which is expected in January, 1996, Teck can exercise its right to earn a 55% interest by funding the project through to production, leaving American Bullion with a 45% carried interest.

Prior to this year’s program, a preliminary scoping study, undertaken on the main Red Chris deposit by consultant Fluor Daniel Wright, outlined a potentially open-pit resource of 157 million tonnes grading 0.48% copper and 0.37 grams gold per tonne, using a copper cutoff of 0.3%.

The deposit has a mine life of nine years based on a 50,000-tonne-per-day operation. American Bullion is targeting at least 220 million tonnes of reserves, sufficient to sustain a 14-to-15-year mine life.

The company’s vice-president, Wayne Roberts, says drilling to date has expanded the zone to more than 200 million tonnes, while maintaining a grade of 0.5% copper and 0.4 gram gold at a 0.3% copper cutoff. Stepout drilling west of the proposed open pit encountered 240.8 metres of 0.55% copper and 0.34 gram gold (including an interval grading 1.01% copper and 0.63 gram gold over 64 metres) beginning at a drilled depth of 154.5 metres for hole 175.

The addition of a third rig will be directed toward infilling the Red Chris deposit, particularly along the southern boundary. Two other rigs will concentrate primarily on the Yellow Chris area, further delineating the Gulley zone and a second area of stockwork mineralization to the north. Exploratory holes will also be drilled to test for continuity between the Yellow Chris and Red Chris zones.

American Bullion believes the Gulley zone represents a target in the range of 80 million tonnes averaging 0.5% copper and 0.5 gram gold. Recent drill results include: 150.3 metres of 0.51% copper and 0.35 gram gold (including 67.1 metres of 0.63% copper and 0.41 gram gold) for hole 176, drilled on section 48,800; 301.8 metres of 0.32% copper and 0.43 gram gold (including 149.4 metres of 0.48% copper and 0.72 gram gold and 21.3 metres of 1.37% copper and 2.9 grams gold) for hole 168, drilled on section 48,900; and 204.5 metres of 0.51% copper and 0.44 gram gold (including 73.2 metres of 0.81% copper and 0.74 gram gold) for hole 170, drilled on section 49,000.

The company expects to raise additional funding by way of a private placement of 1 million special warrants at a price of about $3 per warrant. Each warrant can be exchanged for one common share upon receipt of a prospectus filing. American Bullion has 10.2 million shares outstanding.