Gunsteel program enhances potential at Nugget mine

Exploration work at Gunsteel Resources’ Nugget property continues to enhance its production potential. Because the geology and mineralogy of the various gold-bearing structures are quite complex, the current program has understandably been very methodical in nature.

Gunsteel has the property under option from Nugget Mines, a family- owned company headed by Stanley Endersby, who incidentally is also president of Gunsteel. He confirms that Nugget will eventually go public, presumably to advance the property to production. Under the present option agreement Gunsteel can earn a 50% interest for $2 million; after that level has been reached each partner will contribute its pro-rata share of costs.

Nugget basically acts as a contractor for the project, something Endersby says is cheaper than hiring outside contractors. The company has infrastructure and equipment in the region which has kept costs down and enabled it to maximize the impact of its public financings.

Reserves now stand at 73,000 tons grading 0.45 oz gold per ton which represents a gross value of $20 million. This compares to past production of 430,000 tons grading 0.54 oz which yielded 233,000 oz.

Recent exploration, which has included diamond drilling and development drifting, has encountered encouraging values, particularly in the Fawn vein structure. Drilling has indicated that gold- bearing values in the Fawn structure extend at least 355 ft below one hole which returned 3 ft of 0.2 oz and 3.5 ft grading 0.26 oz.

Cuttings from this hole averaged 0.95 and 1.9 oz respectively and Gunsteel feels the average is probably somewhere in between. This portion of the vein is now being accessed from the No 5 level in the old Motherlode mine, a distance of about 1,200 ft.

There are a few other vein structures which could be encountered along the way, says Endersby. Drifting is under way on several of these veins including the Calhoun, North Motherlode. This winter he estimates they will be working on 11 veins.

Endersby believes they have close to 100,000 tons of reserves although he sees the potential at around 500,000 tons or better. He still views Nugget as a small high grade pro- ducer where tight grade control procedures would be required to maintain desired head grades.