Northair group among mine makers in northwestern B.C. gold camp

Both companies are nearing production on their respective properties in the region. Newhawk expects to reach a production decision in early 1990 on its Sulphurets gold-silver mine, a joint venture with Granduc Mines (TSE). Tenajon’s SB property should be in production next summer following a recent joint venture agreement with Westmin Mines (TSE).

Donald McLeod, president of the Northair group, thinks there will be many more mines to come out of northwestern British Columbia in the next 10 years.

“We will be sticking to our philosophy of trying to joint venture with existing properties held by others who need our expertise in developing them,” he told The Northern Miner.

From its roots as a small British Columbia gold mining company, the Northair group has grown and currently includes in its management portfolio, Newhawk Gold Mines, Tenajon Resources, Northair Mines (TSE), Royal Scott Resources (VSE), Carmac Resources (VSE) and Calnor Resources (VSE).

Concerned that the low price of gold is making it difficult for exploration companies, McLeod nevertheless is enthusiastic as he speaks of development and exploration plans for the group in 1990.

“A production decision is expected in early 1990 on Newhawk’s Sulphurets gold-silver property,” McLeod says, adding that he is confident the project will go ahead.

Newhawk is operator and holds a 60% interest in a joint venture with Granduc Mines, 40%, on the 33-sq-mi property.

Cominco Engineering Services Ltd., has completed its feasibility report based on a 350-ton-per-day operation, but is waiting to include reserve calculations.

Watts, Griffis and McOuat were retained in August to prepare final reserve estimates for the three main zones — West zone, UTC and R-8. Reserves in the West zone were last calculated (all categories) at 854,072 tons grading 0.34 oz gold and 22.94 oz silver per ton.

A 23,000-ft drilling program completed this season was successful in verifying continuity of the West zone at and below the 1200 level, McLeod reports. “We had problems with joining the ore shoots together and these have been resolved.”

A decline has been extended to the 1150 level to allow drilling to depth of the recently-discovered R-8 zone. The R-8 is open in all directions and is believed to be related to the adjacent UTC zone.

Results from an additional 13,000-ft underground drill program currently in progress on all three zones will be included in final reserve figures.

McLeod points out that the unexplored potential of the property is significant. “There are three potential copper-gold open pit deposits on the property, undeveloped because of difficult access,” he says. These are the Sulphurets Lake Gold zone, Hanging Glacier zone and Snowfield Gold zone. Several other mineralized zones have been drilled, including the Gossan Hill, Shore, Golden Marmot and Josephine zones.

“We are looking forward to the Iskut Road study becoming a reality,” McLeod said. He adds that if a road to Eskay Creek happens, it will open up the potential of the lower western portion of Newhawk’s property. The joint government-industry study to determine best possible access into the Iskut River area has been completed and a government decision is expected shortly.

The Newhawk/Granduc joint venture also has a 50% interest in the adjoining Tedray deposit, optioned to Sulphurets Gold Corp. (VSE). The latter was recently taken over by Placer Dome (TSE) which plans a major exploration program on the Kerr and Tedray copper-gold porphyry deposit in 1990.

Newhawk and Granduc spent around $10 million on the Sulphurets property in 1989, on top of $11 million spent in 1988. Should the green light be given, production would commence in spring of 1991. McLeod expects to be looking at a mix of equity and debt financing, or possibly a gold loan, to bring the project on stream. Production costs are expected to be below $200 an oz. Tenajon’s SB mine

If a feasibility by Westmin Mines is favorable, production will begin mid-1990 on Tenajon Resources’ SB property, northwest of Stewart. Under the joint venture agreement, Westmin will spend $2.4 million to earn a 50% interest and will take over as operator of the mine. Of this, $1.05 million must be spent over the next four months, ensuring an active drilling and underground program through the winter.

SB ore will be treated at the Premier mill at a guaranteed minimum rate of 330 tons per day and will have preferred mill costs estimated at around $22 per ton. Importantly, the SB property is road accessible.

McLeod, who is also president of Tenajon explains that Westmin hopes to be able to permit the SB deposit under existing permits.

Cash flow to Tenajon will begin immediately with a $572,500 cash payment of which $400,000 is considered an interest-free loan repayable from future production revenue.

Reserves are 308,000 tons of 0.505 oz gold and 1.02 oz silver per ton.

Tenajon, along with others in the Northair group, have optioned and staked additional ground in the vicinity of the recent gold discovery by Bond International Gold (TSE), 15 km east of Stewart. Tenajon has optioned 80 units and plans prospecting, mapping, trenching, geophysics and possible drilling on the property next season.

McLeod is working to stake or option additional property in the area for other companies in the group. He notes that Newhawk, Tenajon, Northair and Calnor have all acquired leases in Minnesota, close to the Ontario border. An airborne geophysical survey is planned in 1990 looking for base metal and gold.

Gold mines often have a habit of bouncing back, and the Northair group has mothballed a former producer which McLeod says could produce again if gold prices rise significantly.

Royal Scot (formerly Scottie Gold Mines) suspended operations at its Summit Lake gold mine near Stewart in 1985. The mine was closed because of falling gold prices. McLeod is confident that the operation will be re-opened when gold prices warrant it.

Northair’s Willa gold-silver- copper project in southwestern British Columbia was put on the backburner late in 1988 due to insufficient reserves. The company is looking at dismantling parts of the Northair mill that was moved onto this property several years ago in anticipation of more positive results. The equipment would then be moved to the Sulphurets property.

The main exploration target for Calnor Resources is its 65.3%- owned Spectrum gold property located 15 miles west of the Stewart- Cassiar Highway near Kiniskan Lake. Cominco can earn a 60% interest in the property by spending $1.7 million on exploration over four years and paying $50,000 cash. Results are expected shortly from a 4,000 ft drill program completed on the project.

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