Recent diamond drilling on the Ester property near Fairbanks, Alaska, has returned some encouraging results. A unit of Inco (TSE) is earning a 70% interest in the property from Silverado Mines (VSE) by spending US$1 million on exploration. Development of the property dates back to the mid-1980s when Silverado built a 300-ton-per-day mill and developed a small underground mine on the site along with partners Aurex and Tri-Con Mining. The Grant gold mine was operated for about 15 months and produced about 12,000 oz. of gold, but was forced to shut down in July, 1989, because of high operating costs.
Gary Anselmo, president of Silverado, said the mining could not have started “in a worse area” and he tied the operating losses to the extremely complex structure in the initial mining area. He noted the structure of the O’Dea vein appears to be continuous below the 200 level where past mining took place.
Silverado still owes Aurex about US$7.3 million in development cost as a non-interest bearing loan to be paid out of operating cash flow. Silverado has worked out a deal with the company to cancel the debt. To earn its 70%, American Copper & Nickel, the Inco unit, must also pay Silverado US$2 million over a 30-month period. These funds will be paid to Aurex in return for cancelling the liability.
Anselmo said American Copper & Nickel has spent about US$800,000 to date and plans to spend about US$1.2 million on the property in its current program.
Results to date are as follows: Inter- From section Gold Hole (ft.) (ft.) (oz./ton) 80112 594.0 15.6 0.44 80112-1 594.0 18.6 0.45 (wedge right) 80112-2 605.5 10.1 0.58 (wedge left) 80120 608.5 4.5 0.60 80120-1 600.0 15.5 0.057 (wedge right) 80120-2 578.0 2.5 0.32 (wedge left) 589.0 25.1 0.50 80122 599.6 5.0 0.64
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