Anzex Resources mired in litigation problems

A rift in management has mired Anzex Resources (AZX-V) in litigation, hindering its efforts to advance the Longwoods platinum-palladium property on the South Island of New Zealand.

In late November 1998, the president, Donovan Hoult was voted out of office after the directors accused him of acting against the advice and instructions of the board’s majority, as well as withholding material information regarding the company’s activities. He was also accused of attempting to release inaccurate geological information. He has since been replaced by James Kermeen.

By the time of the annual meeting, in March, a group of dissident shareholders, represented by Kevin Good, a former associate of Hoult, had acquired all of Hoult’s stock and intended to vote four new directors to the board. These votes were disallowed on advice of legal counsel. In response, Good filed a petition with the Supreme Court of the Yukon Territory to validate these voting rights. Anzex says it intends to oppose the action.

The company further states that the managerial rift is affecting its ability to raise capital.

“If there is a question about who is running the company, it affects any negotiation you might have with respect to financing or any other mater,” says Kermeen.

At Longwoods, Anzex has completed four holes in a diamond drilling program. Holes 1 and 2 were targeted on the basis of a structural model that assumed a favourable sequence of layered mafic rocks dipped gently to the west. The two holes were drilled vertically and remained within a single layer of unfavourable rocks. Assays returned insignificant platinum and palladium values. This indicated that, structurally, the layered igneous complex dipped steeply. Drill holes 3 and 4 tested this theory and encountered anomalous platinum and palladium values.

Hole 4 cut a series of four short, 1-metre intercepts. The first averaged 0.129 gram platinum and 0.125 gram palladium starting at a down-hole depth of 171 metres. The next intercept assayed 0.142 gram platinum and 0.005 gram palladium starting at a depth of 298.50 metres. At a depth of 301.50 metres, the third 1-metre interval assayed 0.145 gram platinum and 0.004 gram palladium. About 22 metres farther down-hole, the fourth interval averaged 0.143 gram platinum and 0.022 gram palladium.

Hole 4 was collared 125 metres south of the previously reported hole 3. The best interval in hole 3 averaged 0.81 gram combined platinum and palladium per tonne over 2 metres.

The company’s consultant, A.J. Naldrett, says that although the results collected to date do not represent economically significant mineralization, he believes the potential for economic mineralization remains high. “The conclusion at the end of the 4-hole drill program was that there would have to be a lot more surface work done prior to spotting more holes,” says Kermeen.

Surface geochemical sampling is under way in an area south of previous drilling, where an aeromagnetic survey has indicated a possible large zone of favourable strata. The surface program is attempting to establish optimum targets for the next phase of diamond drilling. Data indicate anomalous values ranging up to 810 parts per billion of combined platinum and palladium.

Meanwhile, Anzex has announced that six of its seven applications for prospecting permits have been granted. In addition to exploring for platinum and palladium, the company is investigating the potential for gold mineralization. Gravel from many of the streams that flow both east and west of the Longwoods range have been mined for gold in the past, and there is ample evidence of shafts and small stamp mills.

The gold zone of primary interest is Arethusa, which lies along the eastern flank of the mountain range. Previous claim-holder Sigma Resources reported assay results of up to 103 grams gold per tonne from gossanous boulders and 8.9 grams gold from vein quartz. The best of 23 grab samples collected by Anzex assayed 2 grams gold and 6 grams silver. A soil-sampling program over a 600-by-400-metre section of this zone has been carried out, and results are pending.

Another area of interest is the Merrivale zone, which is near the northern end of the Longwoods layered mafic sequence. Previous work here suggests that potential quartz-vein-hosted gold mineralization may exist in the Takituma Group sediments and a dioritic intrusion.

Anzex has $700,000 in working capital and 9.3 million shares fully diluted.