The discovery and development of the Mt. Milligan porphyry copper-gold deposit generated an exploration rush for the next elephant in British Columbia’s Quesnel Trough, particularly since Placer Dome’s buyout of Mt. Milligan from owners Continental Gold and BP Canada. With the completion of 22 holes on the South Kemess property during 1990, El Condor Resources (VSE) appears to be at the forefront of that rush. All the holesdrilled on the property last year intersected copper-gold values over wide widths ranging up to 675 ft.
El Condor and a unit of Kennecott, in a 60-40 joint venture,are earning a 60% interest in the South Kemess property from St. Phillips Resources (VSE) and its affiliate, Stork Resources, by spending $1.1 million. The property is within a mile of Cheni Gold Mines’ access road in the Toodoggone region of north-central British Columbia.
The Quesnel Trough is an extensive geological structure running fromsouthern British Columbia, north through the centre of the province, and hooking back down through northwestern British Columbia. The structure hosts a number of large porphyry deposits such as Mt. Milligan, Afton (Teck), Similco (Princeton Mining), and Kerr (Placer Dome).
El Condor originally became involved in the Kemess project when Mark Rebagliati, a consultant for the company, recommended theyoption a group of claims known as the North Kemess from the owner, Kennecott.
Kennecott’s work in the early 1970s concentrated on the property’s copper potential, ignoring itsgold content.
By the end of 1989, the company had completed five holes on the property and earned a 60% interest. The holes confirmed the presenceof widespread copper-gold mineralization.
Work on the North Kemess was subsequently sidetracked after the company optioned the adjoining South Kemess property from St. Phillips and Stork. St. Phillips had done a limited amount of drilling on the property in 1988, encountering low-grade copper-gold mineralization in a number of reverse circulation drill holes. But the companies were looking for high-grade gold and the results were not viewed as significant at the time.
El Condor secured an option on the South Kemess in May, 1990, and proceeded with a 5-hole program to test the property’s potentialfor hosting a large porphyry deposit.
All five of the holes confirmed the presence of widespread copper-gold mineralization and El Condor proceeded to begin drilling the area off on a 330-ft. grid.
Rebagliatisaid the favored host for the copper-gold mineralization is in the monzonite unit, although the mineralization does continue into the volcanics below.
The drilling covers an area measuring about 1,500×2,000 ft. and remains open in all directions.
An IP (geophysical) survey conducted over a portion of the property covering the area surrounding the drilling revealed a very high response trending from the drilled area, over 4,000 ft. southeast to the edge of the survey and beyond.
Although envisioning a mining operation is somewhat premature at this stage, stripping ratios would be very low since the topography of the area is gentle and overburden limited to about 30 ft.
Rebagliati said the gold-copper mineralization is relatively consistent throughout the holes andnone of the sample sections contain either high-grade spikes or zero values.
He also said the mineralization appears to be relatively simple and no metallurgical problems are anticipated.
The company includes a copper-equivalent grade with its assay results which is calculated using a number of factors: copper and gold recoveries similar to those expected at Mt. Milligan; metal prices of US$375 per oz. for gold and US90 per lb. for copper; an estimate of concentrate transport costs to port at Prince Ruppert; and various other factors such as smelter charges.
Rebagliati said the equivalent grades are used as a guide to exploration. He added that Mt. Milligan’s reserve of about 400 million tons equates to a copper equivalent of about 0.63%.
El Condor’s next step is a continuation of its drilling program on a grid system. The companyexpects to be back on the property in March or April with a $300,000-400,000 program which will complete the $1.1-million earn-in.
El Condor has 5.5 million shares outstanding fully diluted, of which management owns about 52%. Working capital is at about $230,000 and Stephen Millen, a director of El Condor, said the company is negotiating with a number of parties for a small private placement.
Complete drilling results from the 1990 season are as follows: Hole Interval Intercept Gold Copper Copper (ft.) (ft.) (%) (oz./ton) Equiv.(%) 90-1* 22-594 572 0.019 0.28 0.94 90-2* 15-561 546 0.014 0.23 0.72 90-3* 10-620 610 0.015 0.23 0.74 90-4* 25-240 215 0.007 0.24 0.38 90-5* 23-76 53 0.007 0.13 0.37 90-6* 37-643 606 0.022 0.29 1.04 90-7* 50-404 354 0.018 0.23 0.84 90-8* 20-571 551 0.013 0.20 0.64 90-9* 22-697 675 0.019 0.27 0.29 90-10* 17-338 321 0.014 0.21 0.70 90-11* 20-203 183 0.027 0.37 1.28 90-12* 10-121 111 0.018 0.26 0.87 90-13* 60-453 393 0.019 0.25 0.89 90-14 50-430 380 0.029 0.39 1.38 90-15 50-351 301 0.023 0.21 1.00 90-16 50-312 262 0.032 0.30 1.35 90-17* 20-387 367 0.013 0.19 0.62 90-18 40-492 452 0.013 0.22 0.66 90-19 80-413 333 0.015 0.22 0.74 90-20 30-358 328 0.014 0.14 0.62 90-21 57-348 291 0.013 0.15 0.60 90-22 20-341 321 0.009 0.14 0.45 * previously released
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