Expatriate tables plans for Wolverine-Kudz Ze Kayah

With the deal to buy certain interests in southeastern Yukon from Cominco (CLT-F) set to close May 5, junior Expatriate Resources (EXR-V) is preparing to launch an aggressive work program. All the interests are in the Finlayson Lake district.

The junior intends to mine the upper part of the newly acquired Kudz Ze Kayah polymetallic deposit as an open-pit operation, cranking out 3,000 tonnes per day, whereas the Wolverine deposit would produce 1,250 tonnes per day as an underground operation. Both deposits would be mined over a mine life of 13 years, making use of a 4,250-tonne-per-day concentrator at Kudz Ze Kayah.

Average annual production from the two mines is pegged at 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.

In addition to extensive metallurgical work and mine planning, Expatriate intends to intensify exploration in the area over the next two years. The junior hopes to add at least 7 million tonnes of minable ore, constituting an additional five years of reserves.

The company’s initial target will be the downdip extension of the Wolverine deposit, followed by drill-testing of the Kudz Ze Kayah mineralization at depth, drill-testing of the lateral extent of the GP4F deposit. It also plans to follow up previous drill intercepts cut at the Sable zone. This summer’s drill program is scheduled to begin in early May and is budgeted at $3 million.

Also, a $400,000 budget has been allotted for initial drilling on four of Expatriate’s wholly owned properties in the Finlayson district. Targeting the Red Line and Goal Net properties, the junior plans to test for near-surface mineralization that could be amenable to open-pit mining.

Expatriate has $2.2 million and intends to raise a further $2 million. In the longer term, the company intends to raise $2 million in flow-through financing and complete a $10-million equity financing, all for the purpose of advancing the Finlayson projects to final feasibility.

To acquire Cominco’s interests in these projects, Expatriate must pay the major $11 million, including $1 million on closing, plus a $10-million convertible debenture, along with an additional $2-million payment at production and a sliding-scale net smelter return royalty.

Expatriate has offered the Finlayson assets for inclusion in the Wolverine joint venture. Atna Resources (ATN-T), which holds a 40% stake in Wolverine, has until April 30 to assume 40% of the acquisition costs and obligations.

Discovered in 1995, the Wolverine deposit 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 has stalled development owing to concerns about the marketability of the metal concentrates.

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 deposit is a gentle-to-flat-dipping, tabular, massive sulphide body. Mineralogically, it shares many similarities with the Wolverine deposit, including a high selenium content.