Atna to review Finlayson

Atna Resources (ATN-T) has commissioned Kilborn Engineering Pacific to perform an independent, third-party review of the Finlayson project in southeastern Yukon.

The review follows a recent agreement between Expatriate Resources (EXR-V) and Cominco (CLT-T) whereby Expatriate will buy all of the Finlayson assets, which include the Kudz Ze Kayah and satellite GP4F zinc-lead-copper deposits.

Expatriate is Atna’s joint-venture partner on the nearby Wolverine project and has offered the Finlayson assets for inclusion in the Wolverine joint venture. Atna, which holds a 40% stake in the Wolverine zinc-lead-copper deposit, has two months to decide if it wants to participate in the purchase of the Finlayson assets and pay its 40% share of the acquisitions costs and other obligations, in accordance with Expatriate’s purchase agreement with Cominco.

Kilborn’s review will focus on the estimated capital and operating costs, metallurgy and anticipated economic return of a combined Wolverine/Kudz Ze Kayah operation.

The Wolverine deposit was discovered in 1995 and currently hosts a 6.2-million-tonne resource grading 12.7% zinc, 1.6% lead and 1.3% copper, plus 1.76 grams gold and 371 grams silver per tonne. The deposit contains high levels of selenium — a contaminant that, owing to concerns about the marketability of the metal concentrates, has stalled development.

Kudz Ze Kayah hosts an indicated resource of 11.3 million tonnes grading 5.9% zinc, 1.5% lead, 0.9% copper, 1.3 grams gold and 133 grams silver. Discovered in 1993, the massive sulphide deposit is gentle-to-flat- dipping, tabular and, like Wolverine, has a high selenium content.

The smaller, GP4F deposit is 6 km southeast of Kudz Ze Kayah and consists of two moderately north-dipping massive sulphide lenses. The inferred resource is estimated at 1.5 million tonnes grading 6.4% zinc, 3.1% lead, 0.1% copper, 2 grams gold and 90 grams silver.

Under the agreement, Expatriate will pay $11 million to Cominco, including: $1 million on closing; a $10-million convertible debenture, along with an additional $2-million payment, at production; and a sliding-scale net smelter return royalty.

Expatriate intends to develop and mine the upper part of the Kudz Ze Kayah polymetallic deposit as an open pit, cranking out 3,000 tonnes per day, whereas Wolverine is expected to produce 1,250 tonnes per day from underground. Both deposits would be mined over 13 years and make use of a 4,250-tonne-per-day concentrator at Kudz Ze Kayah. Average annual production from the two mines is estimated to be 204,000 tonnes zinc concentrate and 52,000 tonnes copper concentrate containing 4.5 million oz. silver and 32,000 oz. gold. Mine planning for Wolverine began in February, and Expatriate expects to complete a final feasibility study by late 2002.