Skyline to extend Snip on to Bronson Slope

Junior International Skyline Gold (SK-V) and Homestake Canada, a wholly owned subsidiary of San Francisco-based Homestake Mining (HM-N), have inked a deal on the exploration and possible mining of a portion of Skyline’s claims neighboring the Snip gold mine in British Columbia.

Skyline will conduct underground drilling and drifting on to its High 1, 2 and 3 claim group from the nearby Snip mine workings. For its part, Homestake will perform the mining and drilling that will be funded and directed by Skyline. The two companies have agreed to share the net operating profit from any ore mined from Skyline’s ground on the basis of 55% Skyline and 45% Homestake.

Any ore mined will be processed at Homestake’s Snip mill. Skyline’s High claims are also subject to a 3% net smelter return royalty in favor of Homestake.

The High claims target area is interpreted to represent the strike extension of the Snip deposit on to Skyline’s Bronson Slope property.

Exploration will focus on intersecting a previous drill intercept, which cut 15.77 grams gold per tonne across a 2-metre interval. The mineralization is adjacent to a quartz-calcite-sulphide stringer zone containing 4.9 grams gold across 1.6 metres. The intercept occurred 195 metres from the eastern end of the Snip mine and 75 metres inside the Skyline claim boundary.

About 400 metres up-dip of this target area, Skyline has traced a near-surface structure of disseminated and stockwork gold mineralization known as the Highwall zone. The zone can be followed along strike for about 800 metres on Skyline’s property. Skyline’s geologists believe the zone represents the easterly continuation of the deeper, high-grade structure being mined at the Snip deposit.

The initial exploration program has been budgeted to cost a minimum of $250,000 and is expected to begin as soon as financing is completed.

The Snip mine has produced more than 1 million oz. gold since it was commissioned in 1991. The mine is scheduled to close in the second quarter of 1999, when reserves are expected to be exhausted. The Snip mine is in the Iskut River region of northwestern British Columbia.

International Skyline, which has 32 million shares fully diluted, is negotiating financing for its adjoining project.