Aur takes on U.S. sulphide deposit owned by Savanna

Under an agreement with Savanna Resources (ASE) of Calgary, Aur is planning to earn a 51% stake in a massive sulphide deposit in southern Oregon. Savanna will retain a 49% stake in the project.

The deposit is located on Savanna’s Turner Albright property where 60,000 ft of drilling in 60 holes has outlined 3.3 million tons of grade 1.46% copper, 3.32% zinc, 0.44 oz silver and 0.114 oz gold per ton.

According to Savanna, grades in several deeper holes have been substantially higher, ranging up to 14% zinc, 4.8% copper, 1.6 oz silver and 0.365 oz gold. The deposit remains open at depth.

To earn its interest, Aur must spend $2.25 million on an exploration and development program scheduled to begin this summer. Aur is also required to purchase 1.3 million Savanna shares for $800,000.

“We have had the property for a number of years and we needed someone to carry it to the mining phase with some authority,” said Savanna President John Alston. In addition to its Val d’Or massive sulphide project, Aur expects to produce 24,000 oz gold this year from a new gold mine which is also near Val d’Or.

The United Bank of Commerce, a Caribbean merchant bank with a 12% stake in Savanna, has agreed to provide free trading shares to Aur. In return the bank is being granted a private placement of 1.8 million Savanna shares and a warrant to purchase an additional 1.8 million shares at 65 cents each for a total consideration of $900,000. Scheduled to expire June 15, 1991, the offer could increase United Bank’s stake in Savanna by about 4%.

As reported (N.M., May 1/87), in-fill drilling at the Savanna property has already cut wide sections of sulphide and gold mineralization. They include a 284-ft intersection from a depth of 305 ft to 589 ft which averaged 1% copper, 2.1% zinc, 41% sulphur, 0.82 oz silver and 0.184 oz gold.

“A deep pulse EM survey clearly indicates the mineralization extends to at least 600 ft beyond the deepest intersection,” said Alston.

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