Princeton surveys potential for Similco reserve expansion

When a predecessor company to Princeton Mining (TSE) acquired the Similco open pit copper mine near this picturesque community in June, 1988, it was with a view to provide a much- needed diversification from asbestos fibre. Having accomplished that objective at a bargain basement price in time to benefit from a price upswing for the red metal, Princeton is turning its attention to expanding reserves at Similco beyond its current 5-year mine plan. At the same time, the company is continuing work to upgrade and refit the 30-year-old concentrator to increase its overall efficiency and availability.

Work on both fronts was in full gear when The Northern Miner visited the Similco property, 170 miles east of Vancouver, B.C., in late July. The 1990 exploration program, funded by a recent $2-million flow-through share issue, is largely focused on the Lost Horse Gulch project where definition drilling is continuing to return encouraging results from the Virginia and Alabama deposits.

“By the end of this year we should have a minable reserve in the Virginia deposit at a higher grade than we initially thought,” said Robert Hamaguchi, general manager at Similco. “We now see the kind of potential we need for a 10-year mine plan.”

The Lost Horse Gulch project is one of several exploration targets examined by Princeton since it acquired the Similco property from Newmont. Bill Epp, senior exploration geologist, said the targets were selected after a review of previous drilling and exploration work going back to the 1920s when Copper Mountain came to prominence as a result of high-grade copper discoveries.

Although Epp noted only minimal exploration work was done by Newmont during the 1970s, he said the historical review showed numerous areas where adits and shafts had been driven on 1% copper (or better) by earlier operators only to be abandoned when grades fell to roughly half this level.

“This left us with a tremendous opportunity to evaluate these targets with modern exploration techniques in light of the economics of the day and in view of the fact that our capital costs are paid off,” Epp said. (Princeton paid off the costs of its Similco acquisition in less than a year, with the exception of a concentrate return obligation to Newmont that was recently satisfied.)

The Virginia and Alabama deposits are currently reported to each contain possible reserves of 10 million tons grading 0.32% copper. This year’s program is focused on infill drilling to better define the geometry, grade and tons in these deposits, although some earlier stage exploration is under way or planned for promising targets elsewhere on the property. All are near or adjacent to existing operations.

The company recently reported that results from the initial 20 diamond drill holes on the Virginia definition drilling program “indicate significant potential to increase both grade and tonnage of the deposit.” All holes are vertical, drilled on 100-ft. centres, and average close to 700 ft. deep.

One of the more significant holes drilled in this series, VB90-10, encountered 228 ft. of near-surface mineralization (from 107-335 ft.) grading 0.44% copper, and an additional 306-ft. intersection (from 400- 706 ft.) grading 0.59% copper. The deeper intersection in this hole included 56 ft. of massive magnetite-chalcopyrite-pyrite mineralization (558-614 ft.) grading an impressive 2.21% copper, 0.031 oz. gold and 0.14 oz. silver. These intersections are expected to increase potential reserves in the northeast corner of the deposit which remains open.

As an interesting aside, Princeton plans to drill a deep hole (about 2,000 ft.) in this area later this year, after more geological information is compiled, to test a tantalizing theory that a large, deep-seated but higher-grade deposit might be associated with the Lost Horse intrusive, possibly acting as a plumbing system for mineralization in the Copper Mountain area.

Meanwhile, the company is also encouraged by “significant” results from several holes that opened the eastern end of the Virginia deposit, both near surface and at depth. Selected results here include 270 ft. grading 0.39% copper (0.48% copper equivalent after taking into account precious metal assays), 206 ft. of 0.35% copper (0.44% copper equivalent) and 183 ft. of 0.39% copper (0.52% copper equivalent).

“We could be looking at a grade increase from 0.32% copper to about 0.41% copper in the Virginia deposit,” said Hamaguchi.

Although precious metal assays are still pending from some holes, Princeton estimates that the average precious metal contributions converted to copper equivalent will add about 25% to the copper grades in this area. The increase in grade at depth noted in this area also prompted a decision to do deeper drilling to determine the extent of mineralization (some holes ended in mineralization), and a number of holes to about 800 ft. have already been drilled.

In addition, recent drilling is revealing a possible connection between the Alabama and Virginia deposits. Two holes drilled in this area, VA90-8 and VA90- 9, returned 139.5 ft. grading 0.36% copper and 180 ft. of 0.50% copper respectively.

Several stepout holes drilled on 200-ft. centres for mine planning purposes on the north end of the Virginia deposit also returned mineralization, including 130 ft. of 0.32% copper and 300 ft. of 0.2% copper. More drilling in this area is expected to result in increased reserves for the Lost Horse Gulch project area.

“The overall increase in copper grade and the elevated gold grades at depth are just two reasons why the Lost Horse Gulch project is such an important target,” Hamaguchi said.

Based on preliminary investigations, it is also projected that material in this area (Virginia deposit) will have a markedly lower work index and increased recoveries than the pits currently being mined. The strip ratio is also expected to be favorable, at less than 1-to-1.

Hamaguchi expects that the Virginia deposit could be ready for mining sometime in mid- 1991. In the meantime, mill feed is being blended from the new pit one and from pit three, which has been the source of feed for the past several years.

The introduction of feed from the new pit one was not without problems, particularly in the first quarter of this year. Recoveries were lower than expected because of oxidation levels in the upper benches, strip ratios were higher than anticipated, and the ore was found to be fine-grained and harder than originally estimated. After some modifications to the mine plan, including the introduction of a more desirable blend of ore feed, Princeton was able to report increased copper output for its most recent quarter ended June 30. Output totalled 14.9 million lb., up from 11.7 million lb. in the first quarter when production was affected by poor copper recoveries and by extra scheduled maintenance in the mill.

Work is still continuing to modernize the concentrator across a valley from the open pits. (Ore is delivered to the mill by a 2,370-ft.-long conveyor system and suspension bridge.) Mill superintendent Tim Smith, whose position appears to be one of the most challenging on site, estimates budgeted mill improvements will total $2 million this year. The concentrator has been averaging about 20,400 tons per day for the year to date. The long-term objective, however, is to increase daily throughput to 30,000 tons.

Princeton also owns a chrysotile asbestos mine near Cassiar, B.C., where a new underground deposit, the McDame, will replace production from open pits early next year. The new deposit will be mined by bulk tonnage, block-caving methods. Both operations generated net earnings of $4.1 million for the company’s most recent quarter ended June 30, compared with $10.5 million for the same period in 1989.