Sudbury Contact drops Tonkin Springs (September 24, 2001)

Denver — Sudbury Contact Mines (SUD-T) has withdrawn from the Tonkin Springs joint venture in central Nevada, citing poor exploration results.

The company, which was earning a 60% stake in the project from partner U.S. Gold (USGL-O), drilled 107 holes, totalling 63,575 ft., and was not able to increase the known resource of 1.4 million oz. gold.

Sudbury Contact focused its exploration on three objectives: identifying targets within the resource area where significant expansion could be accomplished, identifying and testing new targets, and re-evaluating the existing resource.

The company also conducted geologic mapping, geochemical sampling, geophysical surveys, additional metallurgical testing and a scoping study. The previous resource stood at 30.7 million tons averaging 0.045 oz. per ton.

Sudbury Contact acquired its option for the property from Globex Mining (GMX-T) and now intends to write off the $2.4-million carrying value of the project in the third quarter.

“In the present gold environment, it was difficult to justify additional expenditures on the property,” says Sudbury Contact President Sean Boyd. “However, we remain committed to Nevada and its potential. We have opened up a new regional exploration office in Reno, headed by our exploration manager, Mark Abrams, and have since acquired three new properties.”

The company picked up a 100% interest, subject to a 1% net smelter return royalty, on the 87-claim Snowbank Canyon project, north of Ely. The previous operator identified large jasperoids, arsenic, antimony, mercury and a disseminated gold system on the property. Sudbury Contact expects to carry on the field work before moving ahead with drilling.

At the southern tip of the Carlin trend, it acquired 200 claims in the Pony Creek property. Drilling by a previous owner identified mineralization around a rhyolite porphyry.

In western Nevada, the company has leased the Fondaway Canyon property, covering 130 lode claims with gold and tungsten occurrences in the Stillwater range. Gold mineralization occurs as quartz-sulphide-calcite veins up to 20 ft. thick. The veins, numbering as many as 15, sit in a 2-mile belt trending 3,000 ft. from east to west.

Although Sudbury Contact pursues opportunities in Nevada, it also maintains interest in two properties in Canada. In northwestern Quebec, the Fenton property consists of 214 claims in the Chapais region. The property contains a resource of 470,000 tons grading 0.14 oz. per ton.

The company drilled 15 core holes, totalling 12,623 ft., to test for downward extension of the zone. Highlights include 9.5 ft. of 0.29 oz. per ton, and 2.6 ft. of 0.29 oz. per ton.

Recent work consisted of further geologic mapping followed by magnetometer and induced-polarization surveys. Results are pending.

Meanwhile, in Newfoundland, the company is earning a 60% stake in the Moosehead gold property from Altius Minerals (ALS-V). An 8,200-ft. drilling program is under way.