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Gold/Mining/Energy : Winspear Resources -- Ignore unavailable to you. Want to Upgrade?

To: teevee who wrote (12038)	1/15/1999 1:53:00 PM
From: Gord Bolton	Read Replies (1) \| Respond to of 26850

October 5th, 1998--How soon we forget--the size of the resource has since been increased significantly. Canada NewsWire Give us your message. We'll give you the world. Canadian Quotes from Telenium WSP. (VSE) Attention Business Editors: Winspear Resources Ltd. Announces Preliminary Results Of Scoping Study On The NW Kimberlite Dyke Located At Snap Lake VANCOUVER, Oct. 5 /CNW/ - Winspear Resources Ltd. (WSP-V) is pleased to report on preliminary results of the scoping study conducted by MRDI Canada - a Division of H.A. Simons Ltd. (''MRDI'') on the NW kimberlite dyke located at Snap Lake, Camsell property, NWT. The Camsell Lake property is operated by Winspear on behalf of a joint venture in which Winspear's interest is approximately 67%. The NW kimberlite dyke subcrops on a peninsula on the NW shore of Snap Lake. The strike length of the NW dyke as established by drilling is approximately 850 metres. This kimberlite dyke dips gently eastwards under the peninsula and extends below Snap Lake where it has been intersected a distance of 1.8 km east of the sub-crop in drill core along one section established by widely spaced holes. The NW dyke remains open in both directions along strike and is also open down dip. The scoping study is based on 13 drill holes intersections obtained in 1997 and an additional 65 holes (4025 metres) that have been drilled this season on the peninsula that is underlain by the NW dyke. The area drilled measures approximately 850 metres along strike and between 200 - 400 metres wide. In this limited area, 46 holes were drilled this season on a regular pattern on approximately 70 metre centres. The remaining 19 holes were drilled within this grid on approximately 20 metre centres in an area proposed for the next stage of bulk sampling. These closely spaced holes are designed to provide information on local variations in the kimberlite. With the exception of those holes drilled to define the up-dip edge of the dyke, all holes intersected kimberlite approximately as expected. Over significant areas, the kimberlite has a relatively constant thickness and, as presently interpreted, shows only broad warps in overall attitude. Hypabyssal kimberlite as previously encountered in both drill holes and bulk sample material comprises the bulk of kimberlite in drill core intersections. The main dyke averages about 2.6 metres estimated true thickness but it locally splits into two dykes separated by up to two metres of country rock. In other restricted areas, drill holes encountered kimberlite breccia in which the breccia components comprise material similar to the immediately adjacent host rocks. These intersections of kimberlite breccia tend to be thicker than those of hypabyssal material and range from approximately 1.3 to 9.4 metres estimated true thickness. In the area of close-spaced drilling, four holes intersected breccia while two other widely separated holes also intersected this material. MRDI has prepared a geological solid model of the NW dyke using drill data provided by Winspear. From this model, MRDI estimates that 1,348,000 tonnes of NW dyke kimberlite underlie the NW peninsula area of Snap Lake. This tonnage estimate is presently being examined by MRDI using conditional simulation techniques that will permit error margins to be placed on this estimate using thickness variations from hole to hole. This information will also help define drill hole spacing in future drill programs on that portion of the dyke that extends under Snap Lake. MRDI has also proposed that the NW dyke kimberlite as presently understood can be satisfactorily mined using a combination of open pit and underground techniques. MRDI concludes that a small open pit that conforms to existing NWT mining regulations could be considered on the NW peninsula from which approximately 670,000 tonnes of kimberlite could be mined. They also conclude that by employing standard underground mining practices, 100% extraction of mineable reserves could be achieved, except for safety crown pillars, on that portion of the NW dyke that extends under Snap Lake. MRDI has applied their extensive knowledge of mining costs in northern climates to a hypothetical range of ore values and estimated tonnages for the NW dyke to help evaluate for the joint venture the possible economics of mining this structure. Two models, both of which assume an ore value of $Can 400, are reported below. The first model considers possible economics of only an open-pit mine established on the peninsula in accordance with existing mining regulations. The second model incorporates the first and also assumes that the NW dyke continues under Snap Lake in a similar manner as has been documented by drilling on the peninsula. The area considered to supply the additional kimberlite required by the second model measures 1000 metres along strike and 500 metres down-dip from the eastern edge of the open pit. << Model 1: Assumes Open Pit only: (Processing rate equals 1000 tonnes per day) Assumed Tonnage of Kimberlite Mined: 667,000 tonnes Mine Life 25 months Assumed Ore Value(x) $Can400 / tonne Assumed Diluted Ore Value $Can380.95 / tonne Assumed Capital Costs $Can 61.0 million Assumed Total Operating Costs $Can 49.2 million Total Cash Flow After Tax (Current NWT Tax Structure) $Can 99.5 million Discounted Cash Flow Rate of Return (After Tax) 54.3% Model 2: Assumes Combined Open pit and Underground Operation (Processing Rate equals 1000 tonnes per day) Assumed Total Tonnage of Kimberlite Mined: 3,500,000 tonnes Mine Life 10 years Assumed Ore Value(x) $Can400 / tonne Assumed Diluted Ore Value $Can380.95 / tonne Assumed Total Capital Costs $Can 103.8 million Assumed Total Operating Costs Over Mine Life $Can 305.0 million Total Cash Flow (Assuming Current NWT Tax Structure) $Can 572.4 million Discounted Cash Flow Rate of Return (After Tax) 55.6% (x) Diamonds recovered from a 200 tonne bulk sample taken from the NW kimberlite dyke previously have been reported as being valued at the equivalent of $US343 / tonne (approximately $Can 500). >> For both alternatives outlined above, positive cash flow is achieved within the first 12 months of operation. Alternatives outlined above are based on assumed ore values and tonnage available to be mined. Considerable work must yet be done on the NW dyke to verify ore values and to establish mineable reserves. However, based on results to date, potential project economics are robust. Studies to date have identified no insurmountable technical issues. Work is presently in progress to outline the next work program on the NW dyke that is anticipated to include additional bulk sampling and diamond drilling. The purpose of additional work programs will be to advance the NW dyke project towards a pre-feasibility level. Winspear Resources Ltd. ----------------------- Randy C. Turner, P.Geo. President and C.E.O. The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release. -30- For further information: Randy C. Turner, P.Geo., President and C.E.O., (604) 687-6644, Toll Free: 1-800-686-7744, Fax: (604) 687-1405; or Web Site: www.winspear.com, Email: randgrp@helix.net WINSPEAR RESOURCES LTD. has 40 releases in this database.