Pacifica to shell out $10m for Howards Pass

Vancouver — Pacifica Resources (PAX-V) has signed a letter of intent to earn a 100% interest in the Howards Pass zinc-lead project in the eastern Yukon. The property is currently held by Placer Dome (PDG-T) and Cygnus Mines.

Pacifica, which was spun off by Expatriate Minerals (now Yukon Zinc [YCZ-V]), already holds a significant land position in the region. The letter of intent allows Pacifica to acquire the land held by Placer Dome and Cyprus in return for $10 million to be paid over seven years and exploration expenditures totalling $3.5 million over two years.

The joint venture retains a 2% net smelter return royalty on production and would receive $10 million from the net proceeds of production.

Considered one of the world’s largest undeveloped deposits of its kind, Howards Pass is a sedimentary exhalative-style deposit. The lead and zinc mineralization is layered and contained in sediments that are gently folded and offset by faults. It was discovered in 1972 by Placer Development.

In 1983, Placer Development estimated that the so-called XY zone had an indicated reserve of 60 million tonnes grading 5.51% zinc and 2.38% lead based on 137 diamond drill holes and underground work. The Anniv zone was found to have 55.5 million tonnes grading 5.29% zinc and 1.79% lead.

Pacifica plans to carry out definition and expansion drilling, which it will fund with $8 million raised from a recent equity financing.

Pacifica will be picking up where Vancouver-based Copper Ridge Exploration (KRX-V) left off at the end of 2000.

Copper Ridge was keen on the bulk minable resource at Howards Pass and had considered using Billiton Metals’ proprietary hydrometallurical processing method.

Copper Ridge completed 2,000 metres of diamond drilling in eight holes that year. But after Billiton backed out of a joint exploration program, the company failed to come up with the initial purchase payment, and so the project reverted back to Placer Dome.