Black Hawk bids to become diversified metals company

Former Sherritt-Gordon Mines mine manager Garry Hughes, has been hired as president of Black Hawk and at least $500,000 will be spent this year on a graphite and nickel prospects in Timmins, Ont., and Manitoba respectively. Hughes will also take a look at possible gold and nickel acquisitions as he bids to build a portfolio of metal projects that he says “will cover the ups and downs of the mining cycle.”

“I like the nickel end of things,” he said at the company’s recent annual meeting in Toronto. He was referring to his previous experience with Sherritt Gordon, but he also feels that Black Hawk’s graphite property should not be discounted.

With about 100,000 tons of grade 8% to 10% graphite in drill-indicated reserves already delineated, Hughes said one million tons of proven ore would be enough to justify an open pit mining operation.

Known reserves have been outlined to a depth of 120 ft, along a 300 ft strike length with a waste-ore ratio of 2:1.

Under an agreement with Vancouver-based Lodi Metals Inc. (VSE), Black Hawk can earn a 55% interest in the property by making staged payments of $1.25 million by September 1991.

So far, Black Hawk has spent $500,000 on a trenching program designed to test anomalies identified by induced polarization survey and a 13-hole drill program. A self potential geophysical survey and a 13-hole diamond drill program are planned for later this year.

“Graphite has little sex appeal, but if prices remain at 45 cents per lb the property could generate some cash flow,” said Hughes.

Meanwhile, Black Hawk has until June 17 to decide whether it will go ahead and purchase Canamax Resources’ (TSE) option on the Minago nickel property near Wabowden, Man.

The property is located within a stone’s throw of the highway connecting Thompson to Winnipeg.

In return for a $250,000 payment to Canamax, Black Hawk can earn a 75% interest in the property where 13.5 million tons of grade 0.98% nickel is hosted in five zones at depths of 250 ft to 1,800 ft. Of that amount, four million tons of 1.28% nickel is contained in the “main zone.”

Tests conducted on behalf of Canamax by Outokumpu of Finland indicated that the property should be capable of producing a 20% concentrate and achieving recoveries in the 75% to 80% range. “They didn’t do a lot of test work but we can improve on that,” said Hughes who is planning a 4-hole drill program to probe the property to a depth of 1,200 ft.

“After confirming that the deposit is continuous to 1,200 ft, we would consider putting in a ramp and doing some underground drilling,” he said.

Recently Black Hawk arranged a private placement of $214,286 with DCC Equities at 29 cents per share. The placement included a Canadian Exploration Incentive Program (CEIP) grant of $64,286.

“We believe we have added value to the company and we will try to add more in the future,” said Hughes.

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