San Andreas Resources (VSE) has updated preliminary reserves at the Prairie Creek project to about 3.2 million tons grading 13.4% lead, 15.6% zinc and 6.2 oz. silver per ton.
San Andreas can earn a 60% interest in the project, about 300 miles west of Yellowknife, N.W.T., by spending $1.8 million by August, 1995. However, that arrangement is set to change following a recent agreement whereby San Andreas would acquire all of the property from current owner Nanisivik Mines. San Andreas expects to complete the transaction by June 1 through payment of $1.25 million cash as well as a $2-million debenture convertible into common shares at $3.50.
The new reserve estimate incorporates drill results to the end of 1992. It includes both vein and stratabound lead-zinc-silver mineralization up to hole PC-92-22.
Previous reserves, which covered only the steeply dipping vein zone, were about two million tons grading 11.8% zinc, 10.8% lead, 0.42% copper and 5.3 oz. silver.
The new estimate does not include two recent holes drilled 160 ft. and 500 ft. southeast of the reserve area. Those holes represent almost a doubling in the length of the high-grade, flat-lying, stratabound mineralization. Summer drilling is to further delineate the southeast-northwest-trending zone.
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