Yellowjacket Project Report
Eagle Plains Resources Ltd (TSX-V:EPL) and Prize Mining Ltd. (TSX-V:PRZ) have announced the filing of an NI 43-101 compliant Technical Report on the Yellowjacket Project.
Barry J. Price, P.Geo., an independent geological consultant, was retained to review and compile previous drilling and current production data for the project with a goal of producing a formal valuation report and an NI 43-101-compliant inferred resource estimate for the property. In calculating the resource, Price noted the constraints imposed by the complexity of the historical drill pattern and the strong nugget effect of the gold mineralization.
Price noted the current resource is considerably smaller than the previous estimates by Homestake and by Canamera Geological. For the former study, drill spacing was much wider; recent drilling has established that the geology is erratic and it is difficult to trace the mineralization as far as originally thought and, for the latter, the estimate appears to be unreliable.
Based on the results of the exploration and development conducted to date on the Property, the Report concludes that the Yellowjacket Gold Zone represents a legitimate development target with the potential to host an economically feasible mineral deposit. The report also states that additional zones on the Property are legitimate early stage exploration targets and recommends a tentative budget of $520,000 for the next stage of exploration. Currently the Yellowjacket Zone is open along strike in both directions and to depth.
About the Yellowjacket Gold Project
The Yellowjacket Project is located 9 km east of Atlin, BC and is accessed by all-season road. The project received a Small Mines Act Permit in July, 2009 for the development and production of gold from the British Columbia Ministry of Energy, Mines and Petroleum Resources (see EPL/PRZ news release July 13th, 2009). The Permit allows for the development and operation of an open pit gold mine and onsite concentrator processing up to 75,000 tons per year of ore. The local Taku River Tlingit First Nation were active participants in the review and approval of the Permit. In October 2009, Eagle Plains and Prize announced the formal ratification of an Impact and Benefits Agreement with the Taku River Tlingit First Nation.
The Agreement recognizes that the Yellowjacket Project is located within the TRTFN Territory; and the YJV holds certain interests and rights granted by British Columbia to extract gold resources. Furthermore, the parties recognize that they have a mutual and beneficial interest in cooperating with each other to advance and complete the Yellowjacket Project in a timely, environmentally responsible and orderly manner.
Recent Work on the Yellowjacket Zone
Commissioning and test work on the mill facility was completed in June of 2009 and stockpiled material from the 2008 bulk sample work was processed for approximately two weeks. Due to unexpected lower grades of the bulk sample material, equipment problems and unforeseen circumstances that resulted from permitting of the Project, additional funding was required to keep the project moving forward and to maintain, as much as possible, a production schedule that was originally envisioned by the JV partners.
Excavation activity and expansion of the existing pit took place from mid-August to mid-September. Approximately 40,000 tonnes of material was mined, with approximately 9,000 tonnes of material stockpiled for processing. Milling at a peak daily rate of approximately 350 tonnes per day was achieved at times, but numerous breakdowns, equipment failures and permitting delays hampered production overall. Although some dore was produced onsite, the smelting furnace was not efficient which led to a decision to process the bulk of the concentrate offsite. Unfortunately, the processing of the gold concentrate into gold matte for delivery to the refinery has progressed much slower than anticipated and final results for the gold production for 2009 are not expected for approximately three weeks. However, based on the amount of gold delivered to the refinery to date and the results of fire assays on the gold concentrate it is believed that the 2009 production will be between 200 and 250 ounces of gold. A definitive quantity of gold recovered will be reported when final processing activity has been completed.
About the Joint Venture
The project is operated through the Yellowjacket Joint-Venture, jointly owned by Eagle Plains and Prize Mining and operated by Eagle Plains. Under the terms of the Joint Venture Agreement, Eagle Plains earned an initial 40% interest in the Project from Prize by making a $2,000,000 cash payment. EPL retains the right to increase its interest by a further 20% by making staged cash payments of $2,000,000 to PRZ over 6 years. Since commencing activities, Eagle Plains has advanced the JV an additional amount of approximately $2,600,000 to cover 2009 expenditures and to keep the underlying property agreement in good standing. Prize Mining subsequently agreed to accept dilution of its interest in the project in accordance with a formula established in the Yellowjacket JV agreement. The current JV ownership ratio resulting from this dilution will be announced as final figures are established.
About Eagle Plains Resources
Eagle Plains continues to conduct research, acquire and explore metal projects in western Canada. In addition to holding mining royalties on various projects, the Company controls over 35 gold, base-metal and uranium projects, several with third parties including Swift Resources Inc. (TSX-V:SWR), Prize Mining Corp. (TSX-V:PRZ), Waterloo Resources Ltd. (TSX-V:WAT.P), Touchdown Capital Inc. (TSX-V: TDW) and 99 Capital Corp. (TSX-V:WDG). In recent years, Eagle Plains has completed option agreements with Teck Limited (TSX:TCK.B), Alexco Resource Corp. (TSX-V:AXR), Billiton Metals, Rio Algom Exploration, NovaGold Resources, Kennecott Exploration and numerous other junior exploration companies, resulting in over 53,600m (163,370’) of drilling and over $28.3 million in exploration spending on its projects since 1998.
Expenditures during 2008 and 2009 on Eagle Plains’ projects were approximately $7,300,000, funded by Eagle Plains and third party partners. This work resulted in approximately 6,900m of drilling and extensive ground-based exploration work and facilitated the advancement of numerous projects at various stages of development.
Posted Feb. 02.10
