Pacific Trans-Ocean predicts higher gold output at Ketza

Mill feed at the Ketza River gold project of Canamax Resources (TSE) and Pacific Trans-Ocean Resources (TSE) near Ross River, Yukon, could include refractory sulphide ores in 1991, one of the partners predicts. Canamax is operator for the project.

The study by Pacific Trans- Ocean projects over 60,000 oz of gold production for its own account in 1991, assuming the sulphide material is economically viable.

The current milling rate is 370 tons per day and gold recovery is estimated to be 87% which should improve to over 91% after the tuneup phase is completed. Mill throughput is expected to climb to 400 tons per day.

In the past year, Pacific Trans- Ocean arranged cumulative financings of $29.5 million. Of that amount, $7.2 million represented flow-through funds, $4.2 million was raised to acquire one-half of an outstanding 20% net profits interest in the Ketza property, $7 million was arranged through DCC Equities of Toronto to fast track the Ketza project, and three months ago it secured an $11-million gold loan from Lloyds bank. This provided the long-term financing for construction and development work at Ketza and replaced the DCC interim financing.

The principal of the gold loan will be repaid in 16 equal quarterly instalments beginning Sept 30, together with interest calculated at 3% per annum. Pacific Trans- Ocean and Lloyds have also entered into a revenue protection program; for a small premium, the latter will receive no less than $429(US) per oz for gold but it will be able to participate in future price increases.

Management at Pacific Trans- Ocean expects Ketza’s cash operating costs will be approximately $210 per oz in 1988, declining to $200 thereafter. Geological reserves in three of the 20 mineralized zones located to date at Ketza are estimated at 1.3 million tons grading 0.4 oz gold per ton. Additional reserves are expected to be found which could support an expanded milling rate and possibly a separate sulphide mill.

A $1.75-million exploration budget has been approved this year for metallurgical test work on sulphide material, underground exploration of the Break deposit, and reserve development of other oxide and sulphide zones.

Separately, Pacific Trans-Ocean will be spending $750,000 in 1988 on its Mount Skukum properties 40 miles south of Whitehorse, Yukon. This property is the subject of a joint venture agreement with AGIP Resources. Three zones of gold-silver mineralization have been located to date with values up to 0.58 oz gold over 6 ft reported from channel samples. Two of the zones will be drilled this season.

The company has outlined three gold zones on its Gordon Lake property, 60 miles northeast of Yellowknife. A 16 hole diamond drilling program completed two months ago yielded visible gold from two holes in the North zone. Assay results are pending. South zone results included 14.8 ft of 0.92 oz gold, 10.4 ft grading 0.38 oz, 14.4 ft averaging 0.11 oz, and 5.4 ft grading 0.05 oz. This year’s $750,000 exploration budget will include reconnaissance and detailed mapping, trenching and sampling, and further drilling.