Sudbury Contact Mines going underground at Victoria Creek

Having drilled 52 holes totalling 85,000 ft., Sudbury Contact Mines (TSE) will carry out more surface drilling and then begin underground exploration on its Victoria Creek gold deposit near Kirkland Lake, Ont.

In 1994, three phases of drilling defined an inferred mineral resource of 4.7 million tons averaging 0.132 oz. per ton to a depth of 2,600 ft., along a strike length of 4,000 ft.

Starting next month, Sudbury Contact (SC) will spend $3.3 million and use three drills in an 80-hole program which is expected to exceed 100,000 ft. The goal is to establish the continuity of the eastern portion of the Main zone, which contains 2.75 million tons averaging 0.174 oz. per ton. The remaining mineral resource is within the western portion and is 1.97 million tons averaging 0.07 oz.

Other objectives of the surface drilling will be to test for extensions of the Main zone along strike and at depth, as well as to complete exploration drilling of other targets outside the area of known mineralization. The favorable horizon extends 2 miles west of, and 11 miles east of, the main deposit.

Following the drilling, SC will select an appropriate site to sink a 3,000-ft. shaft. Additional underground work will include driving two 5,000-ft. exploration drifts and completing 30,000 ft. of underground drilling.

The underground work is estimated to cost $25 million, and shaft-sinking is expected to begin in late 1995.

To raise funds for exploration, SC is arranging a flow-through private placement agreement with parent company Agnico-Eagle Mines (TSE). SC has agreed to issue more than 290,000 of its shares to Agnico and will receive proceeds of $4.5 million. All income tax benefits associated with incurring exploration expenses in Ontario and Quebec will be passed on to Agnico.