Lower-than-expected head grades and tonnage from the Heino Money zone at the Tillicum property near Nakusp, B.C., have prompted Goldnev Resources (VSE) and Bethlehem Resources (TSE) to drop their option on the property.
The joint venture had an option to buy the deposit from Columbia Gold Mines (VSE) for $1.25 million.
A total of 6,067 tons grading 0.71 oz. gold per ton were mined from the Heino Money zone. The ore was processed at the Goldstream mill, near Revelstoke, for an estimated recovery of 3,294 oz. gold and 5,275 oz. silver. The concentrates were shipped to Japan for smelting.
The companies had expected to mine 9,000 tons at an average of one ounce gold per ton.
Bethlehem President Brian Kynoch said the 6,000 tons were mined from two stopes. The joint venture had planned to mine a third stope, containing about 3,000 tons, but unconformities forced mining to be postponed while confirmation drilling was done.
The work did not add to reserves, however, and Bethlehem does not see enough potential for additional
high-grade reserves to justify retaining the option.
The original $1.25-million purchase price included cash payments of $200,000 plus a further $1.05 million in production payments of US$60 per oz. of gold produced.
Kynoch said $100,000 in cash payments have been made and the gold royalty will add another US$200,000, which should enable the joint venture to break even.
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