Golden Sitka busy at Chichagof

Old mines have a habit of coming back to life and the Chichagof mine property 50 miles northwest may prove to be an example of that adage.

The property is owned by Golden Sitka Resources (VSE) a Vancouver- based company headed by Harold McKenzie, past president of Hudson Bay Mining & Smelting. Golden Sitka is 70%-owned by three companies, Queenstake Resources (TSE) with 26%, Exploration Ventures with 22% and Vector Mining with 22%.

When The Northern Miner visited the property a phase one exploration program was under way in the Hirst-Chicagof mine which included some 3,500 ft of drilling. The program is designed to test for any down dip extension to the Kay vein from the main level.

Existing reserves in the Kay vein total some 12,380 tons (probable and possible) at an estimated grade of 1.0 oz gold per ton. An additional 18,000 tons of similar material is inferred between the 500 ft level and the 1000 ft level which hopefully will be verified by the drill program.

The company’s holdings include two past producers: the Hirst-Chichagof and the Chichagof mine. While the actual tonnage mined from these operations was relatively modest, the grade was not. Between 1906 and 1942, they produced about 800,000 oz gold and the historical average was better than 1.0 oz. One ore zone, the Temby-Rust ore shoot, yielded 76,000 oz of gold annually over a three-year period with 2.1 oz head grades. (An ore shoot like that would pay back capital costs in no time).

Rehabilitation work is under way in the nearby Chichagof mine and the Golden Gate No 4 adit will be used to test the lower extensions of the Big Croppings vein. A 5,000 ft drill program is planned this September. The Big Croppings vein is estimated to contain about 75,000 tons of reserves (probable and inferred) averaging 0.5 oz gold.

Base line and environmental studies have been carried out along with metallurgical test work and tailings disposal for the Chichagof mine. In 1987, Golden Sitka raised $2 million(US) for the project through a public offering of two million shares. Sufficient funds are on hand to complete the Chichagof and Hirst-Chichagof work programs but continued exploration and feasibility studies will require additional funding, the company says.

The project would probably be developed at a modest production rate with the emphasis on grade rather than actual mill throughput. The location is actually quite good and the site is accessible by barge which should make it easy to bring equipment in.