Sitka Gold formed for Chicagof mine

Three companies involved in the Chichagof mine project 80 miles southwest of Juneau, Alaska, have put their respective interests into a new entity called Sitka Gold. Holding the largest equity position is Queenstake Resources with 37.5%, followed by Vector Mining (a Ventures Trident subsidiary) 30%, and a limited partnership operated by Exvenco with 32.5%. Sitka has already filed a prospectus to raise $3 million for the project.

John Hite, a Sitka director, feels it will take that to reach feasibility and he says the Big Croppings and Kay oreshoots will be prime exploration targets. Any mine would be a small producer, probably about 150 tons per day, and he estimates total cost to production at $9 million(US). The Chichagof mine produced over 596,000 oz gold representing three-quarters of the district’s total output.

Orebodies at Chichagof are localized at fault splits, several of which remain to be explored. Mr Hite emphasizes some of these oreshoots are very high grade which could lead to a rapid payback of capital. Historically these shoots averaged over 100,000 tons and graded 1.0 oz gold, so even a modest-sized mining operation would generate a considerable amount of gold. The original mine was 80 tons per day and no effort was made to prevent high grading, so head grades might have been higher, he notes.

Samples have been submitted for metallurgical test work and recoveries are expected to be about 98% with crushing, grinding and flotation. The company plans to dewater the nearby Hirst-Chichagof mine, a parallel structure, which was flooded during the war. This vein has been outlined by old workings and recent drilling. The dewatering program will allow sampling of old workings and further drilling to depth. This program will be done in conjunction with the development work on the Big Croppings which was also outlined by previous drilling and drifting. The Golden Gate No 4 adit will be rehabilitated below the developed area of the vein and a raise driven to its intersection on the Golden Gate No 1 level.

The project lies on patented ground and there is good tidewater access which should simplify permitting, he says. Mr Hite emphasizes the property is a “long-term hold” for all the partners, noting that Queenstake has been involved since 1982.