High River buys out Russian partner at Prognoz

High River Gold Mines (HRG-T, HRIVF-O) is snapping up the remaining 50% stake in the Prognoz silver project in the Republic of Sakha in Russia, about 444 km north of the capital city of Yakutsk.

Under an arms-length agreement, High River will issue 34.1 million shares representing 9.9% of the issued capital of the company and will assume about US$16 million in debt related to past exploration on the property.

High River currently owns an indirect 50% interest in the silver project, with the rest owned by a private Russian company, Gazteck Industry.

The announcement comes just a couple of months after cancelling a plan with Roscan Minerals (ROS-V, ROSFF-O) and Gazteck to spin the project out into a silver-focused company.

The 56-sq.-km property hosts more than 30 high-grade epithermal silver veins and High River describes it as “one of the largest and highest grade undeveloped silver projects in the world.”

In June, High River released an updated National Instrument 43- 101-compliant resource estimate on the deposit.

In the indicated category, Prognoz contains 4.49 million tonnes grading 704 grams silver per tonne for total contained silver of about 102 million oz. In the inferred category, Prognoz hosts 4.87 million tonnes grading 659 grams silver for total contained silver of about 103 million oz.

Mineralization is epithermal in origin and regionally, the Prognoz property is within the Verkhoyansk mobile belt, a major fold-and-thrust belt that forms part of one of the Earth’s great orogenic systems, High River says.

The district where the Prognoz deposit is located covers the areas of the Sartang sinclinorium at the west with the Adychan fold-and-block dome to the east. The boundaries of the majority of the mineralized deposits on the property are determined by the intersection of longitudinal and lateral faults.

More than 30 veins have been identified on the property. Many of the vein sets are multiple kilometres in length, and on average 2-4 metres wide and more than 200 metres deep.

The veins are moderately to steeply dipping. Mineralization occurs as quartz-carbonate-sulphidesulphosalt cement within fault breccia, veins and stringers. Host rocks are largely sandstone and mudstone.

During 2006 and 2007, High River’s 85%-owned Russian subsidiary drilled more than 650 diamond- drill holes (over 59.5 km), completed 4 adits for a total of 187 metres and extracted a 17-tonne bulk sample for metallurgical test work. Historical work has consisted of 89 diamond-drill holes (for 17.8 km) and 317 trenches (totalling 17.8 km).

Apart from Prognoz, the company is bringing two new open-pit gold mines into production.

In Burkina Faso, its Taparko- Bouroum mine poured its first com- mined first, to enhance project economics.

During The Northern Miner’s recent site visit it was evident how near-surface the rock is. There are a number of outcrops, and shallow trenching can uncover the rock elsewhere. Besides assaying, initial metallurgical test work is also in progress, and moly recoveries will be reported once tests are completed.

Linear Metals holds a 100% interest in KM61, subject to a 0.5% net smelter return (NSR) royalty, half of which can be purchased for $250,000. Other areas of the property are subject to a 3% NSR royalty.

On a 10.5 by 7.5-km land package, Linear’s claims total 48 sq. km, and they cover a number of other prospective targets that the company is investigating. The three highest priority targets were discovered during an airborne geophysics survey using resistivity and induced polarization. Rees is looking for molybdenum in lake sediments, and one indication of possible mineralization is the presence of potassium-thorium anomalies, which may point to biotite or sericite alteration, and potentially porphyry rock. So far, Linear has discovered two potassium-thorium anomalies for follow up.

Road and rail infrastructure in the area is good. A paved road, highway 527, leads from Thunder Bay north to the small town of Armstrong, a distance of about 250 km. Jackfish Road, an unpaved logging road, leads east-northeast from Armstrong, and a short bush road leads to the project from Jackfish Road. A 12-km logging road connects the project with the main CN railway line.

Currently there is no electric power in the area. However, the company says that Ontario Power Generation is planning to construct a generating station on the Jackfish River, scheduled for completion in 2014. This would make power available within 10 km of the property. Should the project go into production earlier, diesel generators would have to be used.

The company rents space from the McKenzie Lake Inn, a few kilo-metres south of Armstrong on highway 527, and uses it as a base. The facility has accommodation, two saw shacks, two logging shacks, and core storage. Basic provisions, including fuel, are available at Armstrong, but any other supplies must be brought from Thunder Bay. A drillers’ camp, with mobile homes and a diesel generator, is located next to the project.

Linear has signed a memorandum of understanding with the Whitesand Ojibway First Nation, located near Armstrong. It also employs First Nations people on the project.

Aside from KM61, Linear holds the Cobre Grande polymetallic project in Oaxaca state, Mexico; a scoping study on the project is expected next year.

There is about $4 million in Linear’s treasury, and the company has 46.8 million shares fully diluted.