Highwood/Hecla project could be producing in ’87

A deal between Hecla Mining Co. and Highwood Resources could lead to construction of a specialty metals mine as early as next year, Highwood President D. G. Thomas says.

The deal, which was signed in September, gives Hecla the right to earn a 50% interest in Highwood’s Thor Lake beryllium-rare earth elements deposit located 65 miles southeast of Yellowknife, N.W.T.

To earn its interest, Hecla must complete a feasibility and marketing study within 18 months, reimburse Highwood for 50% of its exploration expenditures estimated at $8 million, and bring the property to production. Capital costs at Thor Lake are estimated at $30 million(US). Mr Thomas feels that pending a positive feasibility study, Hecla will accelerate the project; starting mine construction before the 18-month option period ends.

Mr Thomas notes that Hecla also took down 75,000 shares of Highwood at a price of $6 per share. The cash will enable Highwood to complete a 5-mile road to the property which will provide year-round access. Reserves at the property total 1.6 million tons grading 0.85% beryllium oxide. Included in this figure are 435,000 tons of 1.4% beryllium oxide and 0.26% yttrium oxide, in addition to appreciable levels of niobium and other rare earth elements.

Beryllium and the rare earth elements find applications in high technology electronic products. Beryllium is primarily used as an alloy of copper. Such specialty metals require more than just being mined and milled. They must also be processed into a saleable commodity and marketed. Hecla, Mr Thomas says, brings to the joint venture, mining, metallurgical and marketing expertise which will be valuable to the project.

At the company’s Bugow gold property near Russell Lake, N.W.T., diamond drilling has delineated a small gold deposit. Located 70 miles northeast of Yellowknife, the property is held equally by Highwood and affiliate company Aber Resources.

Four drill holes completed in the Bugow iron formation intersected several strong sections, including 29 ft grading 0.35 oz gold per ton, 15.5 ft assaying 0.24 oz and 26.3 ft grading 0.46 oz. A follow-up drill program is expected to start after freezeup in November.

Drilling will test not only the new discovery, but other sections of the iron formation which strikes for more than 20,000 ft along multiple fold limbs.