Jerome, Muscocho earmark $8 million for Jerome mine

Joint venture partners Jerome Gold Mines and Muscocho Explorations are making a big push this year to find out if the old Jerome gold mine in northeastern Ontario’s Swayze area can be revived.

The former producer, about 50 miles west of Gogama, turned out 57,000 oz of gold and 15,000 oz of silver when it operated from 1941 to 1943. Current reserves are estimated at 311,000 tons grading 0.20, but that does not include any tonnage from the South zone. In fact, established reserves come only from the developed section, or about half, of the known 4,000-ft length of the Main zone.

The two companies, with Muscocho acting as operator, are now spending $2.5 million in order to expand those reserves in the first phase of the program. If results are encouraging, they could spend another $4-$5 million on the project in 1988.

The plan is to dewater the existing 1,100-ft, 3-compartment shaft and six levels of lateral workings — a project that is already under way — and conduct detailed sampling. Drifting, test-holing and underground drilling will then be conducted from the existing workings to investigate extensions of the Main zone and the South zone which is only 400 ft from the Main zone.

Results from the first two surface drill holes of the current program on the South zone have been released. The first hole returned 6.9 ft grading 0.17 oz gold per ton. The second hole returned 4.8 ft grading 1.07 oz in the South zone, then continued on to intersect the Main zone at 762 ft returning 5 ft of 0.12 oz and 6 ft of 0.12 oz at 775 ft. A third zone was also cut at 860 returning 6.0 ft of 0.12 oz.

McNellen Resources is participating in Muscocho’s option to earn a 50% interest in the property. Jerome and Muscocho have the option to buy the 63-claim Jerome property from E.B. Eddy Forest Products for $2.5 million, which includes monthly option payments of $25,000, by the end of 1988. The joint venture has to spend $1 million in exploration on the property by July 1.

The partners expect to have spent about $2 million by the end of February on camp setup, dewatering and surface diamond drilling. Another $6.3 million is earmarked for further dewatering and underground work on the South zone including 2,700 ft of drifting, 200 ft of crosscutting, 400 ft of raising and 60,000 ft of underground diamond drilling.

The partners hope to establish an economic tonnage base in the South zone but also plan to use the newly created workings at the 500-ft level on the South zone to test the downward extension of the Main zone.

When all that is complete, and assuming the results live up to expectations, the partners will have to pay the balance of the $2.5 million payment needed to acquire the property outright, then consider ways to finance production.