Yellowknife (Mar 28/05) - The gold mine-free era in the NWT may be a short one if Tyhee Development has its way.

The company has filed applications with the Mackenzie Valley Land and Water Board for land and water permits.

These permits will allow construction and operation of a new mine and a mill on the $383 million resource Tyhee refers to as the Yellowknife Gold Project. The new mine will be located on the old Discovery mine property - some 6,265 hectares located 90 km north of Yellowknife.

The project focuses on a relatively new shaft drilled just eight years ago. Initially it only reached 100 metres when sunk by GMD Resources, but last year Tyhee extended it another half-kilometre.

Applications in hand, the next step for the board is to conduct preliminary screening to decide whether the project requires an environmental assessment, said board executive director Bob Wooley.

Because Tyhee's focus is the new shaft in the Ormsby zone - two kilometres from the former mine site - there are no grandfathering provisions exempting Tyhee from a full environmental assessment, he said.

Tyhee president and chief executive officer Dave Webb expects the land and water board will refer the project for an environmental assessment by June 2005 and said that puts the company on track to start building the new mine in late 2006.

"We've been spent the last 18 months doing $1 million in environmental studies," he said.

"At points there were more environmental people in our camps than exploration people."

The old Discovery mine produced 1,023,575 ounces of gold and Tyhee has high expectations for the new project.

"We have 120 metres of mineralization that extends and bulges out like a string of pearls," said Webb.

Over the last year Tyhee has put $6 million into an underground program.

"The information from that told us the zones were more continuous than we expected," said Webb.

One of the 300 drill holes punched by Tyhee is showing results of 20.8 grams of gold per tonne over 1.5 metres.

"Last year in March we released a resource estimate that showed 900,000 ounces of gold identified at about a 12 grams per tonne grade," he said.

The project is gaining momentum, thanks to the crack team of Northern gold gurus now on board, he said. Former Lupin mine executives, including chief geologist Ralph Bullis, mine manager Bill Burton and Echo Bay accountant Dennis Paschuk, are now part of the Tyhee family.

The company is now looking to raise $5.3 million with the help of Calgary's Clarus Securities to pay for a pre-feasibility study including mine designs as well as production and manpower estimates.