Athabaska drills at Nicholas Lake

With financial backing from Royal Oak Mines (TSE), Vancouver-based Athabaska Gold Resources (TSE) has begun drilling at its 60% owned Nicholas Lake gold project north of Yellowknife, N.W.T.

Royal Oak has agreed to invest between $855,000 and $1.16 million in Athabaska via private placements of options and warrants and may acquire up to 33% of Athabaska’s 8.5 million issued shares.

The product of an amal-gamation of Royal Oak Re-sources and the Pamour group of companies, Royal Oak can also appoint 50% of Athabaska’s board positions, if the latter company’s shareholders agree to the deal. As a result, Royal Oak would have the right of first refusal on any future financings arranged by Athabaska Gold.

Proceeds of the agreement will be used to finance a 10,000-ft. drill program at Nicholas Lake where preliminary reserves in the Main Showing stand at 473,000 tons grading 0.46 oz. gold per ton.

Athabaska has the right to acquire Chevron Minerals’ 40% interest in Nicholas Lake where prefeasibility studies indicate that current reserves can sustain a 350-ton-per-day operation (grading 0.38 oz.) for five years. Extensions of the mineralized zone existing below 1,000 ft. are expected to allow mining to proceed beyond five years. Before she became president of Royal Oak, Margaret (Peggy) Witte gained extensive experience in the Arctic via her association with Neptune Resources and its Colomac gold project.