Equity Silver to deep drill “Lupin-style” Argus project

Argus Resources (ASE) says it is becoming increasingly certain that sedimentary rocks at its Esker Lake project in the Northwest Territories are similar to those at Echo Bay’s (TSE) Lupin gold mine.

Argus and partner Equity Silver Mines (TSE) are planning to move a second drill on to the property to test a number of targets that Argus says display all the characteristics of a “Lupin-style” deposit.

The 200,000-acre Esker Lake property is 240 miles southeast of the Echo Bay mine, which last year produced 204,440 oz. gold.

Back in 1988, news that Lupin- style sulphides had been intersected at Esker Lake drove the price of Argus shares up to $1.40 on large stock-trading volumes.

Typically, these deposits extend to considerable depths and consist of gold associated with arsenopyrite, pyrrhotite and pyrite within a quartz-veined iron formation.

Since March, 1988 Argus shares have slipped back to 45 cents as investors waited for results from drilling financed by Equity Silver which can earn a 50% stake in the project by spending $2 million. Argus and privately owned associate Sirius Energy Corp. would each hold 25% of the project if Equity exercises the option.

With 17,000 ft. of drilling now complete, Argus says about 10 favorable targets have been identified including the Brandon Hill zone, which yielded economic grades in one of six holes.

Highlights include 8.2 ft. of grade 0.40 oz. gold per ton and 9.8 ft. of grade 0.12 oz. Those values were intersected above the 200-ft. level.

“The structure we are testing is extremely complex and folds in all directions,” said Argus President Michael Duggan, who believes that the joint venture is “knocking on the door” of a significant discovery. With a second drill on site, Equity Silver will probe down to the 3,000-ft. level and complete 10,000-20,000-ft. of drilling this year.

Meanwhile, Argus is preparing a rights offering under which each common shareholder of record will receive one right for each common share held. Under the offering, five rights can subscribe for one unit consisting of one common share and one common share purchase warrant.