The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
St. Andrew considers liquidation of Nixon Fork to raise capital for Ontario flagship property; drilling defines 'irregular geometry'
Seven months after putting the Nixon Fork Mine on the block, St Andrew Goldfields Ltd., an Ontario-based exploration and mining company, may be weighing competing purchase offers for the property.
Potential purchasers have expressed interest in the project, according to Mining News sources. But St Andrew has signed no agreement so far to sell the asset.
Located in the Interior near McGrath, the Nixon Fork Mine came on line in January 2007.
During nine months of production through September 2007, workers ran 18,105 metric tons of ore extracted from the upper portion of the 3300 zone of the Crystal deposit through the mill with an average head grade of 17.1 grams per metric ton gold. The ore grades came in at substantially less than those outlined in an independent technical report prepared for the mine in October 2006. It envisioned a proven reserve of 47,000 metric tons at 34.05 g/t gold and a probable reserve of 137,500 at 18.05 g/t gold.
In October shortly after Jacques Perron joined St Andrew as president and CEO, the company suspended production at Nixon Fork and said it would concentrate on an underground drill program to better define the geometry of the gold resource on the property. St Andrew said it encountered production problems at Nixon Fork due to what engineers described as the irregular geometry of the mineralized zones of the 3300 ore-body.
Drilling aimed at challenging target
Since the suspension St Andrew has completed 6,930 meters of underground core drilling. The majority of this program was infill drilling on the 3300 ore-body. According to St Andrew representative Steve Teller, a few exploration holes also were drilled toward the J5A ore-body and intercepted the downdip extension of the known mineralization.
"The Nixon Fork gold skarns are a challenging target, but the reward is high grades. During this winter's drilling program, we had 109 intercepts that exceed 1 ounce per metric ton, including 61 intercepts in excess of 2 oz/t and 19 intercepts in excess of 5 oz/t," Teller said.
The results from the infill drilling will represent a better picture of the mineralization in the ore-body. Teller said assay results are expected in June.
Since the completion of drilling in late March, Nixon Fork has been placed in care and maintenance. Teller said he will continue to oversee the project during this phase.
St. Andrew will focus on flagship property
Since the third quarter of 2007, St Andrew has focused on advancing exploration and mine development activities at its flagship asset, the Holloway-Holt gold mine, which is located at the eastern end of St Andrew's land package in the Timmins Mining Camp in northeastern Ontario.
St Andrew said it plans to divest all none-core assets to finance exploration and mine development activities at the Holloway-Holt mine.
"2007 has been a disappointing and a frustrating year," Perron said in Statement earlier this year. "Since I joined St Andrew in October 2007, we have adjusted our business plan to focus our efforts on the development of the Holloway Holt mining camp financed by the diveStitures of non-core assets and/or equity and/or debt financings.
"We can assure you that we are as confident and committed as ever to developing the Holloway Holt mining assets into production and ensuring that the long-term benefits it will bring to all Stakeholders are realized."
The most recent of these non-core assets that St Andrew has liquidated is the company's 33,000- hectare, or 9,677-acre, land package in the Eskay Creek area of British Columbia. Kenrich-Eskay Mining Corp. has entered into an option agreement with St Andrew to acquire up to an 80 percent undivided interest in St Andrew's mineral tenures. The agreement would provide St Andrew with more than C$2 million in Stock and cash, and nearly triple Kenrich's land holdings to 46,400 hectares, 13,607 acres, of the Eskay Rift belt.
St Andrew also raised capital by selling off a portion of its Stock in New Zealand-based Glass Earth Gold Ltd. as well as other properties and assets owned by St Andrew in Canada.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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