St Andrew, Holmer team up at Timmins

St Andrew Goldfields (SAS-T) says it intends to earn a majority interest in the Timmins gold project in Ontario’s Bristol Twp.

Property owner Holmer Gold (HGM-T) reports that the deposit contains a resource of almost 2 million tonnes, within 350 metres of surface, grading 7.97 grams gold per tonne. The estimate is based on 68 core holes and a cutoff grade of 3 grams over 1 metre.

To acquire the interest, St Andrew must show it can generate a minimum operating profit of $10 per ton by mining the upper 100 metres, in which case it would reap 40% of the ensuing profits, leaving Holmer with the remainder.

The company has four years to achieve production and plans to spend no more than $1 million doing so. Ore is to be trucked 70 km to St Andrews’s Stock mill and equipment will be provided by the nearby Hislop project, which is expected to be mined out next year.

St Andrew has the right-of-first-refusal on developing resources below the 100-metre level. The cost of drilling of that portion is pegged at $100,000.

Environmental studies and other permitting programs are under way.

In related news, Exall Resources (EXL-T) has cancelled its custom-milling contract with St Andrew in favour of the Macassa mill of Kinross Gold (K-T) (T.N.M., Sept.20-26/99)

Exall operates and owns a majority interest in the Glimmer mine, near Matheson, Ont., with Glimmer Resources (GME-V) holding the minority interest.

Since early 1997, Exall has trucked mined ore to St Andrew’s nearby Stock mill, but now, the company says, economic and other considerations make it more beneficial to send the material to Kirkland Lake.

For its part, St Andrew is replacing the lost tonnage with its own ore and new custom-milling contracts. The company is considering its options with respect to Exall.