New silver producer likely at Cobalt 5 million spent to date

(Staff) — “A nice little mine with big potential” is the way Mine Manager Richard LaPrairie currently sees what is known here as the Hellens Eplett operation — a joint venture of Silverside Resources Inc. and International Platinum Corp., the former Silver Lake Resources.

With at least 500,000 oz of silver already confirmed by limited underground work, this mine will almost certainly be brought into production this year. But at just what rate will depend on the results of a renewed and vigorous exploration-development program now entering its most interesting stage, The Northern Miner found on a visit to the property, located at the north end of this rich camp, which has yielded over 750 million oz of the white metal since its discovery in 1905. This, incidentally, works out to an average of about 9 million oz per producer — a target that Mr LaPrairie does not lose sight of. (A graduate of the Colorado School of Mines, he is a third generation mining engineer).

Despite its proximity to no less than five former producers, this is a brand new find that was missed during previous rushes because of the heavy clay overburden (50- 200-ft thick) that covers most of the 12-claim property on which there are no old workings.

Close to $5 million has been spent on this project to date, including a 3,000-ft decline ramp from which detailed drilling and sampling has been carried out on five separate veins, as well as limited drifting and raising. A 690-ton composite bulk sample from this work averaged 26 oz silver per ton, while the development muck itself has averaged 34 oz to the ton. In fact there have been some very rich pockets, reminiscent of those mined in the camp’s heyday.

A prelude to production, a 300-ft vertical raise, has just been completed through to surface using an Alimak raise climber. This is now being timbered for a manway and hoisting compartment and a small headframe erected. This will not only be used to hoist all ore and waste rock, but will also serve both as a ventilation raise and a second escape-way. However, the miners’ entry and exit will be via the rampway.

All work to date has been concentrated in the immediate discovery area which lies on the east side of what is known as the McKenzie fault. However, probing of the west side of the fault where the ore- bearing conglomerate is thicker, is just about to start. This is all virgin and considered highly potential ground. Commencing this week, l,000 ft of exploratory underground diamond drill holes will be pushed out in a search for additional vein systems.

“I expect some exciting results from this new drilling and from exploration drifts and raises now approaching high grade drill intercepts on the east side of the fault,” says Mr LaPrairie. Production decision soon

A production decision will likely be made by the end of March. “We have a number of options open,” Silverside’s president and chief executive officer, Leith Hellens tells The Northern Miner. But for starters, it is likely that custom milling facilities will be used, although the joint venture companies involved are hopeful that sufficient ore can be found to warrant its own mill construction. Target is a 150-ton plant financed from revenues from the custom ore shipments.

Including contractors’ crews, there are 20 employees on site at this time, with 500 ft of drifting and 500 ft of raising scheduled monthly, in addition to the rather heavy underground diamond drill program. Cost of this program to the commencement of ore shipments is not expected to exceed $500,000.

Because of the good grade of the ore, management projects operating costs of $4(C) per ton. McCarthy Securities’ mining analyst James Macintosh g oes this figure one better. “Ore reserves are expected to be proven in excess of 100,000 tons grading 32 oz by March, 1987…. At a cost of $3.80 of silver produced, this property would generate $1.7 million in pre- tax cash flow per year to each company at a price of $5.50(US) per oz for silver, or 21 cents per share to Silverside,” he says.

The shares of both Silverside and International Platinum are listed on the TSE. Both have other interests, especially in the precious metals field, and both have healthy working capital positions in excess of $1 million.