Deak expands production plans at Magusi based on new copper zone

Encouraged by recent results at the Magusi zinc-copper property, Deak Resources (TSE) is examining the possibility of incorporating deep copper mining into its current production plan for the site.

The company says its drill program extended the footwall copper zone downdip by about 800 ft., outlining an additional preliminary reserve of 500,000 tons grading 4.5% copper. Of the 12 holes drilled, all but three cut heavy sulphide mineralization, including 18.5 ft. grading 5.5% zinc in hole 6.

Magusi lies about 25 miles northwest of Rouyn-Noranda, Que., and due south of the Porcupine-Destor fault zone. Although the footwall copper zone has been faulted down by about 100 ft. and displaced laterally at 1,800 ft. below surface, Deak believes there is good potential for further copper-zinc reserves along the structure.

“The concentration of these massive sulphide and alteration zones warrant expediting the exploration possibilities at depth along these two miles of strike length,” the company said in a press release.

Deak’s vice-president of Exploration, George Archibald, is currently developing a “large-scale” exploration program for the property. Originally, Deak intended to exploit only Magusi’s high-grade zinc-gold deposit to a depth of 600 ft., using ramp access. A new feasibility study will evaluate copper and copper-zinc mining to a depth of 1,800 ft. combined with an open pit/ramp operation at the Hebecourt copper deposit 5,000 ft. to the east.

“We will still develop that zinc-gold zone with a ramp, but the workings will be extended to the east,” said Douglas Hume, a company director. Preliminary reserves for all zones include:

The company’s new mining plan at Magusi calls for a combination of open pit and ramp mining at a rate of 1,000-1,500 tons per day. A raised bored shaft from the bottom of the ramp would provide access to reserves below 1,000 ft. and a low-cost base for definition drilling.

Ore would be shipped to Deak’s expanded concentrator at Virginiatown, Ont., or other area mills, over the operation’s 10-year mine life. Initial production would come from the Hebecourt open pit and already developed underground mine. But Deak will need further financing before it can proceed with development or deep exploration, Hume said.

The company is currently discussing potential joint ventures with several interested parties. Meanwhile, a previous private placement at 20 cents per share has angered some shareholders. The 15-million share placement was completed last month, shortly after Deak’s share price hit a high of 87 cents on the strength of drill results from Magusi.

But Hume defended the financing, saying the company was under extreme pressure from its creditors to satisfy a $1.85-million convertible debenture. Under the circumstances, he said, Deak got the best possible market price for its shares. Deak recently traded at 24 cents.