Tyhee’s Nicholas Lake shows promise (November 05, 2007)

Tyhee Development (TDC-V, TYHJF-O) is one step closer to deciding whether it can mine its Nicholas Lake deposit, in the Yukon, as an open-pit resource, now that it has hit significant gold intersections and economically viable tungsten values at the Nicholas Lake Main zone.

Assay results from Tyhee’s re-sampling program at Nicholas Lake demonstrated both narrow high-grade zones and broader lower-grade gold zones.

Gold assays revealed 26.98 grams gold per tonne over 2.7 metres in Hole N059, 9.22 grams gold over 5.5 metres in N066 and 3.71 grams gold per tonne over 17.5 metres in N063.

“I was expecting it — if it wasn’t there, I would have been surprised,” Tyhee’s president and chief executive Dave Webb says.

Tyhee has spent the last year re-logging and re-sampling core from 120 drill holes on the Nicholas Lake Main Zone. The majority of the core is historic. Of the 120 drill holes, only six holes were drilled this year and eight in 2005.

The last batch of assay results from the re-sampling and re-logging exercise is due within weeks.

“We have found a lot of gold values that hadn’t been detected because they had never been sampled,” Webb says. “We should have the final drill hole assays soon. We’ll see whether we have an open-pit resource hopefully by no later than the end of the year.”

An open-pit mine at Nicholas Lake could be combined with the existing open-pit resource at the company’s Ormsby zone, 8 km south, resulting in a much more cost-effective mining operation, the company says.

The Nicholas Lake deposit has 300 metres of strike and is 350 metres deep. Webb says the company is looking for 1 million oz. gold, which it would get if the deposit averaged 30 metres of 3 grams gold per tonne.

Now Tyhee — which says it is already the largest property owner in the area — is “tying up the belt” — snapping up as many properties as it can.

“We want to get all the deposits in the Yellowknife Gold Belt,” Webb says. “We’re looking for everything.”

The Nicholas Lake Main zone is one of two zones on Tyhee’s Yellowknife gold project, which consists of 62.6 sq. km of mining leases located 90 km north of Yellowknife. The property hosts the Nicholas Lake Main, Ormsby and West zones.

A report filed on SEDAR in July 2006 put the measured and indicated gold resource at the Yellowknife project at 1 million oz.

Webb has had a long history with Nicholas Lake. As a student, Webb worked as a replacement geologist every summer in Yellowknife and came across surface showings of mineralization in the Nicholas Lake area. He staked 4 sq. km. of the land himself, later optioning it to Chevron (CVX-N).

Chevron eventually sold the project to Athabasca Gold Resources, with Royal Oak Mines picking it up in the late 1980s. But Royal Oak ran into trouble and didn’t maintain the original option agreement on the property.

The project reverted to Webb, who still had a royalty on the property, in 2000 under an order by the Superior Court of Ontario.

Webb sold his property to Tyhee for a quarter of a million dollars in January 2001.

Meanwhile, the latest assay results show signs of economically significant tungsten. The results showed concentrations such as 0.625% tungsten over 4.5 metres in N066 and 0.131% tungsten over 35.2 metres in N064.

The value of tungsten is about $250 per metric tonne per unit, Webb says; that works out to be about $25 per kg. And if 70-80% of that can be recovered, he argues, then tungsten might be of some economic value.

“The tungsten values are going to be dug up (along with the gold) whether we like it or not,” Webb says.

“If you’re getting an additional ten or fifteen dollar value in recovered tungsten per tonne of rock, that’s almost like an additional gram of gold per tonne,” he points out. “No one would build a tungsten mine at those values, but since we’re crushing the rock anyway. . . it’s worth looking at.”