EXPLORATION ’94 — Yukon coal play gives boost to Cash share

Excitement is not an emotion normally associated with the coal sector, the average investor being more susceptible to the lure of precious and base metals plays.

However, Robert Dickinson, Robert Hunter and Jeffrey Franzen would seem to be exceptions to this rule. The trio of well-known Vancouver-based promoters has invested $1.6 million in Cash Resources (VSE), a company with rights to the Division Mountain coal project in the southwestern Yukon. Interest in the project is reflected in Cash’s share price, which, at presstime, was trading near its high of $3.30, up from a 52-week low of 71 cents.

The company’s objective is to develop a coal-fired power-generating facility, which would provide additional capacity — and a cheap alternative — to the Yukon’s current diesel-powered generating plants.

The Yukon’s generating capacity approaches 100% use during peak winter months, and the prospect of additional power requirements for Cominco’s recent polymetallic discovery, as well as the planned resumption of operations at the Faro zinc-lead mine, only adds to the Territory’s future energy needs.

The Geological Survey of Canada originally mapped and sampled three coal seams on the Division Mountain property in 1907, and a small amount of work (including some trenching and drilling) was carried out in the early 1970s. Cash acquired the coal licences in 1992 and performed further work on the known showing before tracing the horizon to a more prospective area, about 3 km along strike to the south.

Trenching this past summer exposed six seams, with an average aggregate true thickness of 25 metres, along a 1.5-km-long zone. Eight holes, drilled on six sections 300 metres apart, intersected an average aggregate thickness of 20.7 metres on the five northerly drill sections. The drilling tested the zone to a depth of about 100 metres; by projecting trenching and drilling results to a depth of 200 metres, Cash estimates the resource contains 12.1 million tonnes.

The coal measure is gently folded, and geophysical evidence indicates potential for additional near-surface reserves in the dip direction to the west, as well as along strike to the north and south.

Further drilling and trenching are planned before a winter shutdown in mid-December.

The coal at Division Mountain compares favorably with Alberta’s highly volatile bituminous material. Average values from a 1993 analysis are as follows: 2.86% residual moisture, 26.99% ash content, 25.05% volatile matter and 0.47% sulphur, with a calorific value of 5,391 cal/gram.