Homestake to option Eskay properties

A recent letter of intent sets the stage for Homestake Mining (NYSE) to earn a 51% interest in two properties held by Ecstall Mining (VSE) in the Eskay Creek region north of Stewart, B.C.

The two separate option agreements are for Ecstall’s Story 3-4 claim blocks (2.5 km southeast of Eskay Creek) and the Story 7 claim block (6 km south of Eskay Creek and adjoining American Fibre’s SIB claims).

Ecstall said its properties were not explored in any detail because of a series of property title challenges. The title problems were resolved in Ecstall’s favor last year with various orders from the Supreme Court of British Columbia, B.C. Court of Appeals, and the province’s minister of mines. Both claim blocks are reported to be underlain by several-kilometre-long belts of Mount Dilworth Formation-Eskay facies rocks which also host the Eskay Creek deposits. This year’s exploration will include property mapping and surface sampling to delineate gold mineralization-drill targets. The options can be exercised separately by Homestake completing a total of $2 million in exploration on the Story 7 by 1997, and $1.25 million on exploration on the Story 3-4 claims by 1996. The agreement also includes option payments totalling $245,000 (for both blocks) during this period.