Gunsteel reserves up at B.C. Nugget mine

Underground development work and diamond drilling have boosted reserves at Gunsteel Resources’ Nugget mine property in southeastern B.C. closer to the desired threshold for production. The company’s immediate objective is to block out 100,000 tons of economic reserves for a small milling operation, probably about 75-100 tons per day.

Gunsteel has raised approximately $1.2 million since going public last July and two-thirds of it has been flow-through. The 1986 program concentrated on the old Nugget mine workings which are located in the central part of the property. Mine workings were rehabilitated, allowing access to several prime targets which had been delineated by previous work and from old mine records.

An exploration tunnel, which was driven east on the No 4 level of the Calhoun vein, encountered one ore zone grading 0.56 oz gold over an average width of 2.7 ft. A drill hole intersected this same vein 100 ft below the working level and the grade was similar, notes President Stan Endersby.

Mine manager Gary Allen says there is generally good vertical continuity to the ore zones and they often extend some 900 ft or more in that plane. But the horizontal extent is usually only a few hundred feet, he adds. So exploring these zones up and down dip in a methodical fashion will be the key to meeting its threshold reserve requirements.

The main exploration thrust at the moment is on the Nugget and Calhoun veins which would be the main source of feed initially. The 100 sub-level now is being advanced in the Nugget vein to the west and Mr Allen claims the high grade material encountered so far has been as “good as expected or better.”

Twenty-one samples taken at various intervals in this sub-level drift averaged 1.1 oz gold per ton over an average width of 2.8 ft. Mining widths, of course, would be larger but this still represents a very respectable grade, even when averaged over 4-6 ft. Further exploration is planned at lower levels and also to the east as these workings advance. The 400 sub- level in the Calhoun vein is also being advanced to test the downdip extension of an ore zone located some 400 ft above. The continuity of this structure will be tested at various elevations as rehabilitation allows access to old mine workings.

There are several other vein systems which will be evaluated in a similar fashion, including the Fawn No 1 vein which is 1,200 ft north of the Nugget. This structure was developed in the 1930s and was mined to surface but not to depth. Development crews would probably tunnel below the vein and mine upwards. “There is no reason why this couldn’t be a paying proposition,” says Mr Allen.

Expenditures now are averaging $60,000-$70,000 per month and ore grade material is being stockpiled in dump raises for future processing. The company is not able to pull this material because of poor access to lower level ore chutes, but this problem will be alleviated after breakup. One drill is operating at present and he says the company is trying to “maintain an even flow” so that it can utilize its manpower efficiently.

The company has the option to send gold-bearing siliceous ore to Cominco’s Trail smelter which could represent a significant source of revenue. In general, the silica credit offsets the smelter charges, then the company is paid for 93% of the gold content in the flux. Mr Allen confirms Gunsteel will be looking at direct shipment to the smelter this year, but adds they would probably not be interested in custom milling any of their production. Installing a small mill on the property would enable them to return tailings underground as backfill.

Gunsteel has a number of other properties in the Sheep Creek mining camp and elsewhere in B.C. which it will be looking at this year.