Eurus options Columbia’s spectrum

A recently completed agreement between Eurus Resources (VSE) and Columbia Gold Mines (VSE) will allow Eurus to earn a 50% interest in Columbia’s Spectrum/Hawk property in return for a total of $8 million in expenditures.

The property is in the Iskut River area of northwestern British Columbia.

Earlier this year, Columbia announced it had renegotiated a previous agreement on the property with owners Northair Mines (TSE) and Calnor Resources (VSE). The agreement allowed Columbia to earn a 100% interest in the property (up from 70%) by spending a total of $2.95 million on the Spectrum portion of the property by the end of 1997, and $1 million on the Hawk area by the end of 1995.

Calnor and Northair have sliding scale royalties on the property ranging from 1% to 3% after the first 100,000 oz. gold are produced.

As part of the recent agreement, Eurus has committed to spend a minimum of $1 million on the property prior to Dec. 31, 1991.

The companies have also granted options to buy one million shares to each other. Eurus can buy up to 500,000 shares of Columbia at $2 each to Dec. 31, 1992, up to 750,000 shares at $3 each to Dec. 31, 1993, or up to one million shares at $4 each to Dec. 31, 1994.

Columbia in turn can buy up to 500,000 shares of Eurus at $4 each to Dec. 31, 1992, up to 750,000 shares at $6 each to Dec. 31, 1993, or up to one million shares at $8 each to Dec. 31, 1994.

The companies plan to start a 15,000-ft. drilling program in the third week of June with the objective of outlining a minimum preliminary reserve of five million tons grading in the order of 0.3 oz. gold per ton.

The drilling will concentrate on testing both the strike and depth extent of two mineralized zones, the QC and Porphyry, discovered in last year’s drilling program.

Of 15 holes drilled on the QC zone, 12 intersections averaged about 16 ft. in thickness and graded in the order of 0.36 oz. gold. The zone has been traced over a strike length of about 1,800 ft. and to a depth of about 300 ft.

The Porphyry zone lies about 300 ft. to the west and has been traced for about 1,000 ft. in a roughly parallel strike to the QC. Grades encountered were somewhat less, intersected up to 0.20 oz. gold per ton over 25 ft.

John Brock, president of Columbia, said this year’s program would also include some drilling on the 500 Colour zone. Five of 10 holes drilled on the zone last year cut an average of 0.45 oz. gold over about 16 ft.

Columbia Gold has about 8.7 million shares outstanding and trades at the $1 level.