Cathedral puts Sterling gold mine on hiatus

Low levels of minable oxide reserves and the current gold price have induced Cathedral Gold (CAT-T) to suspend mining at its 90%-owned Sterling gold mine near Beatty, Nev.

The remaining 10% interest is held by Imperial Metals (IPM-T), which also owns a 40% share of Cathedral.

The underground mine will continue to process a stockpile of low-grade material through 1997 and 1998, with gold production for 1997 projected at 6,500 oz.

The Sterling mine recovered 14,674 oz. during 1996 at a cash cost of US$282 per oz. Last year was the mine’s best in terms of production since start-up in 1980.

On the strength of its production, Cathedral recorded a net income of $259,000 (or 2 cents per share) in 1996, compared with a loss of $2.1 million (16 cents per share) in 1995.

As of Jan. 1, 1997, proven and probable oxide reserves at Sterling stood at 91,010 tons grading 0.22 oz. gold per ton, equivalent to 20,487 contained ounces. Cathedral intends to continue exploration work at Sterling with the objective of defining additional reserves near the current mine workings.

During the past year, the U.S. subsidiary of Placer Dome (PDG-T) carried out a geological review of the mine, including underground and surface mapping, along with geophysical surveys.

Placer drilled three deep holes — as deep as 1,500 ft. below the mine’s workings. Results are being compiled.

Placer can earn a 65% interest in the mine by presenting Cathedral with a positive bankable feasibility study on an economic deposit of at least 750,000 oz.

In related news, a second phase of drilling was completed on the Porcher Island gold property, situated off the British Columbia coast near Prince Rupert. Assay results are expected to be released shortly.

Porcher Island Gold (PIG-V) can earn a 65% interest in the property from Cathedral by spending $2 million on exploration and paying $175,000 over four years.

An aggressive drill program is aimed at expanding the geological reserves at Porcher. Based on the previous drilling of 66 holes totalling 40,000 ft., the main AT zone contains 600,000 tons of indicated reserves grading 0.2 oz., plus an additional 900,000 tons of inferred reserves at the same grade.

During the fall of last year, Porcher Island Gold tested the potential of several zones outside of the AT zone with 13 holes comprising 6,845 ft.