Teryl Resources: Going for the gold

John Robertson, president of Vancouver, British Columbia-based Teryl Resources, is focused on raising funds for his company's Fairbanks-area exploration properties.

The company offered a private placement of 2 million units at 55 cents per unit in a Feb. 25 release, with a treasury share and a half-warrant attached for every one unit purchased. One warrant is exercisable at 70 cents for one year for additional treasury shares. There is a four-month hold on the treasury shares.

The goal is to raise a little more than $1 million for exploration and working capital.

Initial spending will go to Teryl's 100-percent owned West Ridge property just south of the True North Mine operated by Kinross Gold.

Teryl plans to drill up to 15 reverse-circulation holes on the property, as soon as a drill rig can be moved to the snow-covered property.

"We were expecting to be drilling on the property before now," he told Mining News on March 8.

All holes will be relatively shallow, with a maximum depth of about 300 feet, he said. Mineralization encountered at the property is close to the surface, within three to four feet in some places, he said.

"That's the most economical way to produce gold - to not move too much overburden," Robertson said.

Past trenching, soil sampling and a geophysical survey revealed some "pretty exciting drill targets," he said. "The drill holes will test the intrusive targets on West Ridge."

The property's proximity to True North, which has been supplying ore to the Kinross-owned Fort Knox gold mill for almost four years now, is a leading attribute. "Our interest is to come up with enough ore to make available with Kinross to feed into their mill," Robertson said. "They could use additional ore for the mill, and it looks like True North will be running out of ore soon, so it's perfect timing." (See Fort Knox operations story, page 3.)

Gil plans pending

Teryl's other involvement with Kinross includes the Gil exploration project, within the large Fort Knox claim block about 10 miles to the east of True North and West Ridge. Kinross, the operator of Gil, holds an 80 percent interest, while Teryl holds 20 percent.

Robertson budgeted $300,000 for Gil spending this year, outlined in the private placement terms. But he doesn't know yet the actual amount Teryl will be asked to contribute to the project's budget.

"I'm not sure what their plans are … it's up in the air," he said. "I'm still waiting for the year end report (on the exploration property)."

Rather than pushing forward on Gil, Kinross' attention is focused on plans to construct another lift on the Fort Knox tailings dam and to start Phase-6 stripping, Robertson said, information he received during a recent conference call.

"It seems like it will require quite a bit of manpower and equipment. After they are done with that, they will do more work on Gil," he said.

The $300,000 Robertson outlined for Teryl's share of Gil is based on exploration spending of about $1.6 million during 2003 for the gold exploration property.

Most of that spending went to drilling. The joint venture completed 27,590 feet of reverse circulation drilling in 127 holes and 7,917 feet of diamond core drilling in 28 holes.

Initial drilling results continued to advance the project, according to a Jan. 20 press release. One hole hit some significant intercepts of higher-grade material, including 105 feet grading 0.170 ounces of gold per ton of rock.

Results from that press release showed that four other holes produced assays of 0.1 ounces of gold per ton or higher, with intercepts ranging from 20 to 40 feet.

Fish Creek auger drilling

Robertson also plans to spend about $75,000 on the company's Fish Creek property, which also neighbors Fort Knox. In fact, construction of the mine's tailings dam impoundment revealed some "very rich" placer gold mineralization back in the mid-1990s, Robertson said.

Geophysical work conducted in November and December revealed two anomalies, very close to those placer gold sources, he said.

The next step is to conduct auger drilling, sampling soils up to 12 feet deep. "We'll get a large sample and have a good idea of the values of gold there," Robertson said. "Placer mining is easy to go into production to generate some good cash flow if it's economic."

Should that plan pan out, Teryl could get a double value from mining at Fish Creek. Tailings generated by placer mining could be used in road construction to Gil, should that deposit ever be put into production.

"One of the biggest costs of building a mine at Gil is the six-mile road," Robertson said. "If we can use tailings to reduce costs it could save millions. The situation kills two birds with one stone."