Grouse Creek drilling cuts high-grade gold

Underground drilling by Hecla Mining (NYSE) has intersected several spectacular sections of gold-silver mineralization at the company’s joint-ventured Grouse Creek deposit in Idaho.

One of the most impressive results was from hole 38, which returned 15 ft. grading 48.244 oz. gold and 39.48 oz. silver per ton. Some of the wider intersections include 55 ft. at 1.87 oz. gold and 2.5 oz. silver in hole 43, and 90 ft. grading 0.88 oz. gold and 2.6 oz. silver in hole 44. Current drilling from underground stations is part of a US$1-million, 40,000-ft. program which began last summer and is designed to test several targets at Grouse Creek. The project is operated and 80% owned by Hecla, with junior partner Great Lakes Minerals (TSE) holding the balance (with an option to increase to a 30% interest).

Great Lakes reports that these high-grade sections were encountered in the B3 underground zone, which occurs at depth below the Main Grouse ore zone. This discovery is adding another dimension to Grouse Creek, which is on schedule to begin production later this year based on minable reserves of 15.1 million tons grading 0.055 oz. gold and 1.1 oz. silver. The partners expect to produce gold at an average cash cost of US$185-190 during an 8-year mine life. A 6,000-ton-per-day mill operation is targeted to produce an average 110,000 oz. gold and 400,000 oz. silver annually.

Mining will be by open-pit methods, supplemented with underground reserves from the high-grade A3 and B3 zones.

The A3 and B3 zones were previously reported to contain about 200,000 tons of probable reserves averaging 0.5 oz. gold. Both zones are flat-lying and accessible by adit.

The current drill program is aimed at testing the same stratigraphy that hosts the A3 and B3 zones, with a view to finding more high-grade pods of gold-silver mineralization.

“We hope to find more of these ounces because they are low-cost ounces,” Great Lakes President Nicholas Tintor says. “This is the first underground drilling we’ve done, and the results so far have been very positive.” Other significant intersections in the B3 zone included 14 ft. grading 12.883 oz. gold and 224.29 oz. silver in hole 34, 25 ft. of 3.177 oz. gold and 19.39 oz. silver in hole 37, and 5 ft. of 0.529 oz. gold and 0.67 oz. silver in hole 35.

Hecla is also carrying out surface drilling. A recent hole, drilled from surface through the Grouse open pit, intersected 15 ft. of 0.094 oz. gold and 25.47 oz. silver. This hole was near the B3 zone.

The section was within a wider intersection of 170 ft. grading 0.022 oz. gold and 4.37 oz. silver. This wide intersection of mine-grade, open-pit mineralization was drilled to follow up another hole spotted 75 ft. to the southwest, which intersected 100 ft. grading 0.032 oz. gold and 2.4 oz. silver last summer. Follow-up drilling is planned to test the area around these two holes, with the goal of expanding Grouse open-pit reserves. “We see potential for more discoveries on the property,” Tintor says. “We think we are dealing with a large, classic

epithermal system.”