Developers hoping to restart production at the underground, shuttered Nixon Fork gold-copper mine in central Alaska announced more high-grade drilling results from an underground drilling program this summer.

The best intercept from new drilling results measured 4.6 meters at 162.5 grams of gold per ton of rock, or 15 feet at 5.22 ounces of gold per ton of rock. Other intercepts ranged from 0.94 ounces to 1.6 ounces of gold per ton of rock.

Drilling work at the C-3300 Chute Zone, one of three being tested by underground drilling "has indicated a larger and higher-grade inferred zone of mineralization with the bifurcating of the mineralization into more than one mineralized zone," St. Andrew said in an Aug. 4 press release.

"Assays to date have returned high grade mineralization in 36 holes showing good continuity over a vertical length of over 180 meters (576 feet)," the company said.

Mothballed for the last five years, Nixon Fork is now owned by St. Andrew Goldfields, a Toronto-based mining and exploration company, and is being developed by its subsidiary, Mystery Creek Resources Inc.

While working with regulators to develop an operating plan and to obtain permits, the company in January began drilling from the existing underground workings to test three chute zones. So far, a total of 93 holes have been drilled, according to the company's Aug. 4 press release.

Capital costs to start production at Nixon Fork have previously been estimated at $10 million, according to Mystery Creek President Paul Jones, with cash operating costs estimated at $265 per ounce of gold.

High grade intercepts

Outlined in a schematic diagram showing holes drilled in 2004 in relation to existing workings and infrastructure, the company highlighted 31 holes with high-grade intersections. New drill results from the C-3300 Chute Zone include the following: DH 68, 4.6 meters at 35.1 grams per ton; DH 72, 4.6 meters at 162.5 grams per ton; DH 76, 2.3 meters at 50.9 grams per ton; DH 77, 4.3 meters at 44.5 grams per ton and DH 78, 3.7 meters at 29.5 grams per ton.

Assays are pending on another 11 holes in the C-3300 Chute Zone, the company said. The zone remains open at depth, with some of the better assay values occurring in holes drilled to the lowest elevation of the mineralized zone, the company said.

Additional drilling will continue through to the end of 2004, working to delineate the C-3300 and C-3550 zones and to test other underground targets in the vicinity of the existing underground infrastructure at Nixon Fork. A revised resource estimate will be released later this year, St. Andrew said.

In particular, the company plans to follow up on mineralization identified at depth in the C-3550 Chute, which has been tested with only one drill hole by previous operators. The zone has been developed to about 40 meters below the surface, at the 330-meter elevation, the company said.

Surface exploration begins

St. Andrew also said in its Aug. 4 release that a summer surface exploration program has begun, which consists of surface trenching and sampling in the Whalen/North Star area. The area has been previously sampled and skarn/gold mineralization exists in the area. That, coupled with "an improved geological understanding of the geological controls on mineralization" leads it to believe the Whalen/North Star area "has good potential for additional mineralized zones similar to" C-3000 and C-3300 Chute Zones already drilled, the company said.