Skyline improvements should increase recoveries by 16

Now that mill improvements have been completed at the Johnny Mountain gold mine in northwestern British Columbia, Skyline Gold (TSE) is expecting a 16% increase in gold production and lower unit production costs.

According to Skyline Chairman Ron Shon, the recent installation of additional grinding capacity in the mill will mean an additional 8,000 oz gold per year. Gold recoveries improved to 91% from 85% as a result of the mill improvements. Throughput increased to 350 tons from 320 tons per day.

The increased grinding capacity improves the ability of the mill to reduce ore processed to a smaller and more consistent size fraction. This increases the efficiency of both the gravity and flotation separation systems used in recovering gold, silver and copper from the ore.

Skyline also noted that silver production is expected to increase 13% to 88,800 oz per year, and copper is expected to increase 10% to 1.8 million lb per year.

“The increase in gold production is expected to have a significant impact on earnings as 45% of the increased production will be obtained at no increase in operating costs,” Shon said.

Skyline owns 100% of the air- accessed Johnny Mountain mine which is the first producer in the Iskut River district. The British Columbia government is expected to announce a decision for road access into the area shortly. -30- Mixed results from Calpine drilling

VANCOUVER — The latest assays released by Calpine Resources (VSE) for the Eskay Creek gold project north of Stewart, B.C., reveal intersections of varying grades for both precious and base metals.

Results for base metals are yet to be received for some of the new drill holes. The results (uncut) released to date are as follows: 0104,0200,0106,0108,0105,0107,0200,0000 LengthGoldSilverLeadZincCopper Holeftoz/toz/t%%% 16165.60.05 1.92 9.80.13 0.38 9.80.33 0.97 16216.40.5431.126.4720.56 1.55 9.80.10 2.95 164 6.60.15 6.221.16 1.85 0.15 16.40.1713.91 16.40.12 0.430.33 1.0310.01 16513.11.2697.69 16616.40.8126.37 59.10.0714.33 16719.70.03 5.95 19.70.17 9.12 23.00.06 1.214.66 6.51 0.04 168 3.30.14 6.45

Calpine also released base metal assays for several holes that were previously reported for precious metal values. In addition to 4.15 oz gold and 133.82 oz silver, hole 159 returned 3.93% lead, 10.78% zinc and 1.44% copper. Another 32.8-ft interval from this hole assayed 1.85% lead, 7.96% zinc and 0.04% copper, in addition to values of 0.04 oz gold and 0.82 oz silver. Hole 160 returned low base metal values over 23 ft grading 0.23 oz gold per ton and 0.94 oz silver.

Although the company’s stepout drill program on the Central and North zones is shut down for the Christmas break, work is expected to resume with four machines in early January. -30- Drifting produces impressive results at Sulphurets

VANCOUVER — Project operator Newhawk Gold Mines (TSE) is continuing to report encouraging results from raising and sub-drifting on the R-8 structure at the Sulphurets project north of Stewart, B.C.

Newhawk owns 60% of the advanced gold-silver project while partner Granduc Mines (TSE) owns the remainder. Crews have now completed a raise from the 1,150-m level up to the 1,200-m level in the R-8 structure. In addition, a 14.7-ft sub-drift was driven from the raise across the R-8 at about 1,178 m elevation.

The average uncut grade for the raise was 2.86 oz gold and 31.73 oz silver along a length of 170.6 ft. Values of 2.02 oz gold and 41.04 oz silver were returned along a 13.1-ft length for the sub-drift.

In addition, a crosscut on the 1,150 level averaged 0.294 oz gold per ton and 4.99 oz silver across 38 ft. Newhawk noted that the raise and sub-drift “identify a very high- grade lens within the R-8 structure of considerable size,” and with the sub-drift establishes a width of at least 16.5 ft.

The face of the sub-drift is reported to have remained in mineralization. A further advance is planned to test the true width of the structure at this location.

This work is part of a 15,000-ft underground diamond drill program to confirm reserves in the R-8 structure by close-spaced drill holes and also to expand reserves by stepout drilling. Newhawk said broader widths than expected were encountered, particularly in the upper section of the R-8 structure. — 30 — File: LENCOURT GP xp-lenco.g Dec 21 Lencourt signs $1.16 million financing deal

A financing agreement has been made between Lencourt Ltd. (TSE) and Bruce McDonald of Noramco Capital for a private placement worth $1,162,500.

The placement will consist of 3,531,250 units of Lencourt with each unit priced at 40 cents . A unit will comprise one share and 1-share purchase warrant exercisable at a price of 50 cents for one year.

The Toronto-based consulting firm of Watts, Griffis and McOuat, which controls Lencourt, will also invest $250,000 in the junior company.

Funds from the private placement will be used as part of Lencourt’s option payment to acquire control of the Sominki tin and gold properties in Zaire, Africa. The Toronto company has an option to acquire a 71.7% stake in Sominki for $5 million(US) from Billiton International Metals.

The private placement, subject to regulatory approval, is conditional upon Lencourt obtaining a firm commitment for the rest of the funds necessary to exercise the Sominki option.