Crown Butte’s New World hottest play in Montana

One of the more active projects this year is Crown Butte Resources’ (TSE) New World gold-silver-copper property in an old mining camp near Cooke City, Mont.

The company took on the project in 1987, with a view to expanding reserves of about 800,000 tons contained in two small, open pit deposits. As a result of this work, and the discovery of several significant new deposits, Crown Butte was able to double reserves in each of its 1987, 1988, 1989 and 1990 programs.

Preliminary reserves are now reported as totalling 10.4 million tons “containing over 2.2 million oz. gold,” although an updated estimate will be announced later this year once all results from the 1991 program are taken into account.

With over US$15 million spent on exploration, the New World property now hosts five deposits. The two largest, Miller Creek and Homestake, are now estimated to have preliminary reserves of 7.18 million tons grading 0.26 oz. gold per ton. The bulk of current reserves on the property (85%) will require underground mining methods.

Crown Butte and its largest (60%) shareholder, Hemlo Gold Mines (TSE), envision a 1,000- to 1,500-ton-per-day operation that would produce over 125,000 oz. gold annually, plus silver and copper. The project is now in the permitting and feasibility stage, and could be in production in 1995. Not far from New World is the Emigrant Gulch property held by Fischer-Watt Gold (NASDAQ). The junior optioned the promising gold-silver-copper prospect to Pegasus Gold (TSE) this summer after a unit of Kennecott dropped an earlier option.

Near Lincoln in western Montana, Canyon Resources (NASDAQ) and a unit of Phelps Dodge (NYSE) are exploring a land package encompassing 44 square miles. Phelps Dodge has a 72.4% interest and is funding 100% of this year’s US$5.2 million joint venture budget aimed at determining the size and grade of the McDonald and nearby Seven-Up Pete gold deposits.

The Seven-Up Pete was previously reported to host preliminary reserves of 14 million tons averaging 0.06 oz. gold. In mid-August, Canyon reported a 50% increase in the size of the McDonald project which is now estimated to contain preliminary reserves of 27.3 million tons averaging 0.029 oz. gold. This deposit is considered amenable to heap leach processing methods.