Rochester deals South Mercur

Several months after acquiring the South Mercur gold property from Dominion Mining and Ennex International, Rochester Minerals (VSE) has negotiated an agreement with Kennecott Corp. The deal gives Kennecott the right to earn a 60% interest in the Utah property in return for payments totalling US$600,000 and property expenditures of US$1.9 million over a 5-year period. Rochester’s agreement with Dominion and Ennex calls for payments over a 2-year period totalling US$550,000.

All of the paperwork on this original deal has not been finalized and Rochester is in the process of a 750,000-share private placement at 25 cents per share. The placement will raise the US$170,000 that is required to close the Ennex- Dominion agreement and will include 1-year warrants exercisable at 35 cents per share.

The South Mercur is at the southern end of the Oquirrh Mountains within the 50-mile-long Utah gold belt. The belt hosts numerous deposits including the giant Bingham Canyon copper mine, 20 miles to the north. The property also adjoins the southern boundary of the Mercur gold mine owned and operated by American Barrick Resources.

Rochester recently released the results of a small exploration program on the property including about 2,700 ft. of drilling and an orientation IP (geophysical) and resistivity survey.

The program cost about US$50,000 and was part of the regular assessment work required on the property. The drilling returned two significant holes; a 110-ft. intercept grading 0.060 oz. gold per ton; and a 145 intercept grading 0.027 oz.

Both holes were stepout holes from the property’s two known deposits. Reserves on the property were last reported at 1.4 million tons grading 0.059 oz. per ton.

Victor Erickson, president of Rochester, said the reserve was not presently economic because of its size and stripping ratio, estimated at about 4-to-1.

Erickson was more excited about the results of the IP survey which he said clearly show the signature of the two known deposits. He noted that prior to the recent program, no work of this nature has been done on the property and a wide scale geophysical survey was warranted.

Rochester has about 2.8 million shares outstanding and trades at the 20 cents level.