Newhawk, Granduc plan Bruceside exploration work

Field work is expected to begin shortly at the Bruceside portion of the Sulphurets property near Stewart, B.C.

Newhawk Gold Mines (TSE) and Granduc Mines (TSE) — 60-40 owners, respectively — plan to spend $1.5 million on the project this year. Work will include 26,000 ft. of drilling in two phases, as well as mapping and sampling of mineralized zones discovered last year.

The drilling will concentrate on three areas, including the Gossan Hill-Tommyknocker zones where deep drilling will be carried out at about 800 ft. Deep drilling will also test the West and Shore zones in open areas below previous significant intersections. The third area of drilling will test the updip extension of the R8 structure of the West zone at its eastern end. Previous work on the West zone outlined a geological resource of 826,000 tons grading 0.45 oz. gold and 18.8 oz. silver per ton. A feasibility study on the zone, completed in 1990, estimates diluted minable reserves at 550,900 tons grading 0.42 oz. gold and 18 oz. silver based on a 0.30-oz. gold-equivalent cutoff.

The study was based on a 350-ton-per-day operation producing 67,500 oz. gold-equivalent assuming a gold and a silver price of US$400 and US$5 per oz., respectively. The capital cost was estimated at $43 million including working capital, giving the project a marginal return of about 6.7% based on an exchange rate of 17%.

Newhawk hopes that, by boosting reserves, it can improve the feasibility of developing a mine.

The company remains well-funded, with more than $6 million in working capital and 13.3 million shares outstanding.