U.S. REPORT Cathedral, Pacific Sentinel plan exploration work

An aggressive exploration program is being planned by Cathedral Gold (TSE) and Pacific Sentinel Gold (VSE) to outline and test targets on mineral properties totalling 300,000 acres near Anchorage, Alaska.

The properties are owned by the Cook Inlet Region Inc., an Alaskan native corporation. They are adjacent to tidewater and cover a volcanic mineral belt which is considered prospective for both Eskay Creek and Mount Milligan-type gold and base metal deposits.

This year’s $600,000 exploration program will be financed by Cathedral. But Pacific Sentinel has an option to participate at 50% in all projects which result from the 1991 program in consideration of it making provision for a Cathedral financing.

The 1991 program will include geochemical sampling, geological mapping, geophysical surveys and prospecting with the objective of identifying several property-scale targets. It will be the first systematic, intensive exploration program to cover the Jurassic volcanic belt in the Cook Inlet area.

Several prospective targets have already been identified by previous work, including extensions of the horizon that hosts the nearby Johnson River massive sulphide deposit. (The deposit is not part of the exploration agreement as it is leased by a third party from the native corporation.)

The Johnson River deposit has preliminary reserves of two million tons grading 0.27 oz. gold per ton and 7% zinc, and is reported to have many similarities to the Eskay Creek deposit (hosted in a Jurassic-aged volcanic belt in northern British Columbia).

But the Marmot copper prospect near tidewater about 62 miles east of Cominco Ltd.’s Pebble Beach copper-gold discovery is on ground covered by the exploration agreement. This area will be an immediate exploration target for a large tonnage, copper-gold deposit.

Cathedral’s agreement with a subsidiary of the native corporation gives it the right to explore and develop the corporation’s Cook Inlet lands for up to four years by spending US$2 million on exploration and through payments totalling US$205,000.

Mineral properties may be designated for lease at any time during the 4-year period, with a lease extending for up to 20 years, and beyond 20 years by achieving commercial production.

Once a feasibility study is completed, the native corporation may elect to participate up to a maximum of 30%, or may elect to receive a 2% net smelter return royalty which increases to 3% after payback of capital costs.