Inco denies production decision imminent for Vault

“Right now we are discussing (with Inco) gold production scheduling on the Vault property, specifically the North Vein,” he stated in a recent company release. “A gold production decision is imminent.”

The company’s marketing and investor relations group, Strategic Relations Group of Florida, was even more optimistic, saying the project could be one of the lowest cost-producing underground gold mines in the world.

“Initial production of the North vein is projected to bring over $100 million(US),” stated Hal Katz of Strategic Relations. “This cash flow will enable Seven Mile and Inco to launch production on the Main epithermal deposit without any additional cost.”

But Inco spokesman Bob Purcell told The Northern Miner that a production decision is “definitely not imminent” at the Vault property.

“A considerable amount of further exploration will be necessary before the project even reaches the stage that warrants a feasibility study,” he stressed. Purcell also confirmed that an underground exploration program is not planned for the Vault property in the 1990 season.

According to Inco, recent diamond drill programs totalling 37,000 m have located epithermal gold mineralization in two east-west trending zones on the property: the Main zone and the North vein.

The Main zone is reported to contain numerous gold-bearing veins in a quartz stockwork, 600 m long, 40-125 m wide and 5-30 m thick. The top of the mineralization is 170 m below surface at the west end and 500 m below surface at the east end.

Inco stressed that although several “ore-grade” drill intersections were identified within these veins, the overall grade of the stockwork is less than 2 g (0.058 oz) gold per tonne.

In addition, the company said the erratic and discontinuous nature of the mineralization “does not allow a calculation of a mineral resource of possible higher-grade zones within the stockwork.”

But it is the North vein that Seven Mile believes to have the more immediate prospects for production. The vein is described by Inco as a discrete quartz-calcite-adularia vein 350 m north of the Main zone. The major company said drilling to date has indicated a mineral resource of 150,000 tonnes grading 14 g (0.4 oz) gold. (A cutoff of 3 g was used.)

The average true width for the intersections included in this tonnage calculation is 0.57 m. Inco also noted that the North vein has now been tested over a strike length of 1,050 m and a vertical depth 100-200 m.

Inco said exploration under consideration for 1990 is estimated at $325,000 and consists of surface sampling and further drilling on the North vein.

During the past several weeks, Seven Mile High has been a volatile and heavily traded issue on the Vancouver Stock Exchange. After having rebounded from a spate of short selling, the issue is trading at about $2.65 in a 52-week range of 65 cents to $3.95.

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