High River, Nor-Acme to develop Snow Lake

Underground exploration is expected to start shortly on the Snow Lake gold property, following the completion of an agreement between Nor-Acme Gold Mines and High River Resources. The latter company has acquired the right to earn a 60% interest in the former producer, located in northern Manitoba.

High River must spend a total of $6 million during a 4-year period on exploration. A minimum of $2 million must be spent by April 15, 1989. During the option period, High River must also complete a feasibility study and a mill facility capable of processing ore at a minimum rate of 650 tons per day. Any additional costs to production are also to be funded by High River, leaving Nor-Acme with a carried 40% stake in the project.

If placed into production, the first 85% of production will accrue to High River until payback is achieved. After payback, the partners will share revenues as to their respective 60%-40% interest.

During its operating life from 1948-1958, the Snow Lake mine produced 5.3 million tons of ore grading 0.15 oz gold per ton. An independent assessment of the property suggests indicated reserves total 842,300 tons grading 0.16 oz gold per ton. Inferred reserves are estimated at 3.2 million tons of similar grading material. The inferred reserves are based largely on two deep drill sections from 2,400 ft. These cut 75.2 ft grading 0.19 oz gold and 27.1 ft grading 0.227 oz gold. Previous mining took place above the 1,200-ft level.

The option deal also brings considerable mining expertise to the Snow Lake project. High River’s chairman is Brian Mountford, who was formerly chairman of Brohm Resources. Under his leadership, Brohm acquired and is bringing to pr oduction the Gilt Edge gold mine in South Dakota. Mr Mountford was also president of Centennial Minerals which developed the Montana Tunnels project in Montana. That mine was placed into production this year by operator Pegasus Gold.