Sikaman focus on North America

Although Sikaman Resources (TSE) has concentrated its activities primarily in Ghana in the past, the mining company now intends to shift its focus to North American ventures.

The company recently sold its interest in the Bogosu gold project in Ghana for $8.1 million. Sikaman currently has about $4.5 million in working capital, long-term debt totalling $6.8 million and about 13 million shares outstanding.

Despite the shift in focus, Sikaman does plan to keep its 34% interest in the Goldenrae alluvial gold mine in eastern Ghana. The operation processes about 50,000 cubic metres of material per month, for a monthly production of 1,000-1,500 oz. gold.

President Thomas Griffis said the operating cost was expected to average just over US$200 per oz. He added that the company is studying the possibility of expanding the operation to handle one million cubic metres of material per year.

The cost of the expansion is estimated at about US$1.5 million and Sikaman is now waiting for a final bankable document from its consultants.

Griffis said the company is also looking at adding a third plant to boost production to about 1.5 million cubic metres per year at a similar capital cost.

As part of its North American move, Sikaman plans to exercise an option to acquire a 100% interest in the Blue Ledge mine in northern California about 40 miles southwest of Medford, Ore. Sikaman can purchase the interest for US$600,000 in cash plus 1.15 million treasury shares.

Previous work on the property outlined a narrow deposit, about five feet wide, extending over a strike length of about 4,000 ft. and a vertical extent of about 1,000 ft.

Preliminary estimates put reserves at about 1.7 million tons grading 3.5% copper, 3% zinc, 2 oz. silver and 0.07 oz. gold per ton.

Sikaman plans to upgrade existing information on the property as well as conduct surface work on an adjacent area.

Griffis hopes to fund further work on the property by optioning it to a third party. He noted that this follows a general corporate philosophy of funding development through joint ventures wherever possible in order to minimize the financial burden and risk.

Sikaman recently optioned its Greenhorn property 22 miles west of Redding, Calif., to Cyprus Minerals (NYSE). Sikaman acquired an option earlier this year giving it the right to buy the property for US$50,000 plus 1.5 million treasury shares.

Cyprus can earn a 75% interest in the property by funding it to a bankable feasibility study. Previous work outlined preliminary reserves of over one million tons grading 2.3% copper, 0.50 oz. silver and 0.07 oz. gold.

A drilling program budgeted at US$225,000 is planned for early July to test a target to the south of the deposit area.

Sikaman has a 100% interest in the Shoshone mines project in California, about 70 miles west of Las Vegas, Nev.

Anaconda Copper, the previous owner of the property, recorded production of 440,000 tons grading 14.1% lead, 5.64% zinc, 7.57 oz. silver, and 0.12 oz. gold prior to the mine’s closure in 1957. A subsequent evaluation estimated the deposit could contain up to 1.8 million tons of similar grade material.

Additional potential is seen for the discovery of disseminated gold deposits within the lower carbonate stratigraphy.

Sikaman is now working on an airborne survey and geological mapping program on the property.

At the 90% owned Pulacayo property in southern Bolivia, Sikaman plans to start a US$200,000 program to upgrade reserves to the proven category. Preliminary estimates put reserves at about 700,000 tons grading 7.7% lead, 7.8% zinc and 14 oz. silver.

The mineralization is contained in three parallel vein systems which have been traced on surface for over 4,900 ft. and to a depth of over 800 ft.

Prefeasibility estimates put the capital cost of a 400-ton-per-day operation at about US$8.5 million. Direct operating costs were estimated at US$33 per ton, equivalent to US$2.36 per oz. silver produced, excluding zinc and lead credits.

Following the current program, Griffis said the company will look at having a joint venture partner to fund further development of the property.

Sikaman also has an option to acquire a 50% interest in the Thor group of claims in Nye Cty., Nev., in return for US$75,000 in cash and 250,000 shares.

Griffis noted that very little work had been done on the property. Drilling data from the 1970s include a 30-ft. intersection grading 0.71 oz. gold and 0.37 oz. silver but apparently no follow-up work was done.

The company plans to proceed with a US$100,000 program on the property including an airborne survey, surface sampling, and a limited amount of drilling in the area of the high-grade intersection.