Roxmark tests potential to reopen Northern Empire (February 22, 2008)

Roxmark Mines (RMK-V) has started a 6,200-metre surface diamond drill program at its Northern Empire mine property in Beardmore, Ont.

The company, which would like to bring the Northern Empire mine back into production, plans to test 1,250 metres of strike length of the west extension of the Contact zone.

Roxmark president, Monir Younan, says the company will do a scoping study based on previous drill results and new drill results.

“Once we are halfway through the program, we will start the scoping study to confirm what we have done on the (National Instrument) 43-101 report, and update it in terms of reopening the mine,” Younan says.

The 1,250 metres being tested along the Contact zone is in addition to another 200 metres of mineralization tested along strike last year, intersecting both the Power and Contact zones. The Power zone has been mined in the past, but the Contact zone hasn’t. The results were used in the NI 43-101 report, which came out in December.

An indicated resource of 45,000 tonnes grading 13.49 grams gold per tonne and an inferred resource of about 12,000 tonnes grading 16.33 grams gold per tonne was calculated for the small test area.

The report recommended further drilling. After the 6,200 metres, the report recommends that Roxmark follow up with a 49-hole surface program in the summer.

If results are good, then a $10.3-million program to reopen the mine could be in the works, which would include dewatering to the 750-metre level, drifting in the two vein structures, followed by a 5,000-ton underground bulk sample and underground drilling to the east and west of the shaft.

Younan hopes the mine will be reopened by the end of the year so that development work can be started underground.

“We have a few things to go through, that’s our target,” he says.

The Northern Empire mine was last in production in the early 1990s just before Roxmark acquired it in 1996. The mill, constructed in 1982, was used recently to process bulk samples – one in 2005 to produce gold from Roxmark’s East Leitch property and another in 2006, after a mill upgrade, to test molybdenum production from its Nortoba-Tyson property.

“We updated the mill to operate a gold circuit and a molybdenum circuit,” Younan says.

Younan says the mill can be further upgraded to handle 500 tons per day, costing only a few million dollars. It’s also the only mill in the area, creating opportunity for custom milling. Younan says the Roxmark is fortunate to have such an asset.

“To construct a mill from scratch will cost you umpteen thousand millions of dollars because of the time you need to permit and then the construction,” he says. “It takes a lot of time to accomplish that.”

Newmont Mines produced 149,000 oz. gold at the Northern Empire mine between 1934 and 1941 with grades averaging 10.9 grams gold per tonne.

Roxmark, which acquired Northern Empire in 1996 during the time of the bear market in gold, did only a little work on the first two levels of the mine, Younan says.

“It was difficult to raise capital at that time,” he says.

Since 2003, Roxmark has become active again in the Beardmore and Geraldton gold camps.

The company has 12 properties including six past-producing mines, which together have produced 2 million oz. gold.