Stepout drilling expands Kemess reserves

Stepout drilling on the South Kemess property in north-central British Columbia during 1991 added significant reserves to what was already a large copper-gold deposit.

A preliminary estimate of reserves on the property, owned 60% by El Condor Resources (VSE) and 40% by St. Philips Resources (VSE), was recently increased to 252 million tons grading 0.23% copper and 0.019 oz. gold per ton. The estimate is based on a cutoff grade of 0.40% copper-equivalent. The latest reserve increase is one of a progression of increases resulting from successful stepout drilling on the property. Reserves at the start of the 1991 program were 78 million tons grading 0.30% copper and 0.018 oz. gold, increasing at mid-program to about 140 million tons grading 0.23% copper and 0.017 oz. gold.

The zone of porphyry mineralization is described as blanket-shaped, measuring 4,600 ft. in an east-west direction, 2,000 ft. north-south, and ranging up to 800 ft. in thickness. The zone lies very near the surface in the eastern half of the deposit while its depth increases toward the west, lying up to 600 ft. below the surface.

The north, south and eastern limits of the deposit have been delineated, while the zone remains open to the west, extending on to claims owned by El Condor to the northwest and claims under option to Rio Algom to the southwest. Lakefield Research has completed a first phase of metallurgical test work which El Condor says returned excellent results. Details of the findings have not been released, although the company reports that standard flotation techniques returned excellent recoveries for both gold and copper to a conventional copper concentrate.

With a 40,000-ton-per-day operation, El Condor estimates yearly production would be in the order of 200,000 oz. gold and 58 million lb. copper over a mine life in excess of 15 years.

El Condor has drilled 44 holes on its adjacent, 100% owned Kemess North project. Preliminary estimates put reserves at about 128 million tons grading 0.19% copper and 0.011 oz. gold at a cutoff grade of 0.40% copper-equivalent. Kemess North remains open in all lateral directions and a number of other exploration targets have been identified. Douglas Forster, a director of El Condor, said further drilling on the north property will have to wait until the spring since the company plans to focus its attention on bringing the South Kemess deposit to feasibility.

El Condor is now completing budgeting and planning for the feasibility program.

Forster said funds for the work will likely be raised through the exercise of existing principal warrants to net about $1.1 million. He added that Rio Algom (TSE), through a purchase agreement entered in mid-1991, has the right to maintain its common-share interest at 9.9% which would add an additional $700,000 to the company’s coffers.

Forster said the $1.8 million will be enough to cover the company’s 60% share of initial feasibility work, although more funding will be needed later in the year.

Rio Algom’s indirect interest in the project also extends to St. Philips through a purchase option entered last year. Under the agreement, Rio can purchase shares to bring its interest up to about 48% of the company’s outstanding shares.