Imperial extends 114 zone at Sterling

The latest 13-hole drilling campaign by Vancouver-based junior Imperial Metals (III-T) on its 12.5-sq.-km Sterling gold property in southwestern Nevada has lengthened the 114 zone by 107 metres to about 230 metres.

Imperial reports that three of the holes cut high-grade intervals:

— Hole 24 encountered 42.4 metres (from 205 metres below surface) grading 9.1 grams gold per tonne, including 25.3 metres (from 209 metres) of 13.4 grams.

— Hole 28 cut 13.7 metres (from 215 metres) running 8.7 grams gold, including a 6.1-metre section of 17.1 grams.

— Hole 33 yielded 17.4 metres (from 230 metres) averaging 3.8 grams of the yellow metal, including a 4.5-metre section at 10.6 grams.

The remaining holes generally cut between 1 and 10 grams gold over intervals from 1-20 metres. Previously, the discovery hole, no. 7A, intersected 11 grams over 6.1 metres.

The 144 zone lies about 100 metres below the deepest underground workings at the past-producing Sterling mine. The zone is centred along the Tertiary-aged, high-angle Reudy fault.

Mineralization is hosted in north-dipping, brecciated, silicified, silty carbonates 210-250 metres below the surface at the contact between the Bonanza King dolomite and underlying Carrara limestone.

The highest grades are associated with steep, iron-oxide-rich gouge zones and an altered dyke contact. Quartz latite dykes cut the Reudy fault and may be related to a hydrothermal event.

Between 1980 and 2000, an open-pit and underground operation at Sterling churned out 194,996 oz. gold from 854,200 tonnes of ore with an average grade of 7.4 grams gold.

Imperial recently tabled a first-quarter net income of $939,000 (or a nickel a share) on revenue of $13.4 million, compared with a year-ago net loss of $2.7 million (17 per share) on $13.4 million. Cash flow dove to minus $576,000, down from the $9,000 provided during the corresponding period of 2002.

The company’s main asset is a non-recourse half-interest in Huckleberry Mines, situated 123 km southwest of Houston in west-central British Columbia.

Imperials’ quarterly cut from Huckleberry was $1.3 million, including a $4.4-million foreign exchange gain on long-term debt.

During the quarter, the operation squeezed out 8,047 tonnes of copper and 49 tonnes of molybdenum from the 1.7 tonnes of ore milled, well off last year’s pace. The drop is due to lower recovery rates, particularly for molybdenum (25% versus 68.2% a year earlier).

As operator, Imperial warns that Huckleberry’s mine life might have to be shortened in light of continued low copper prices and the recent strengthening of the Canadian dollar.

At the end of March, Imperial had cash and equivalents of $1.6 million; working capital was $900,000.