CHESBAR STARTS UNDERGROUND ON MURGOLD’S SWAYZE BET

Chesbar Resources has dropped an option on proven oil reserves in the Beaufort Sea and has put Murgold Resources’ gold property in Ontario’s Swayze area at the top of its property list.

The oil venture, which looked attractive when initiated just before the sudden collapse of oil prices about a year ago, was really a departure for Chesbar. Its expertise lies more in mineral exploration and concentrating on gold exploration appears to make more sense. What’s more, the company was finding it difficult to finance further work given its previous objectives — potential investors were bullish on the gold prospects but bearish on the oil play.

Now the company is focusing on its option to earn a 60% interest in 60 of Murgold’s 290 claims in Chester and Benneweis twps. about 60 miles south of Timmins. A $1.2-million contract to drive a decline ramp to about the 200-ft level and do exploration work will bring it just short of the $2 million it must spend by the end of 1988 in order to earn its interest.

Chesbar, a company under the same management as Muscocho Explorations and Flanagan McAdam Resources, has already started work on the ramp. A contract has been signed with Canadian Contract Miners for a 1,600-ft ramp measuring about 16 ft wide and 10 ft high.

The main target is the central zone of the No 3 vein system which has been traced along 2,800 ft. A 656-ton bulk sample taken from the system in 1981 averaged 0.34 oz gold per ton. The ramp is expected to be completed by the end of the year.

Work on the No 3 zone will include crosscuts into the zone from the bottom of the decline. Bulk samples to assess the grade over mining widths will also be taken. Plans also include driving along the ore zone in both directions to establish the tonnage and grade of reserves.

As well as the ramp, Chesbar will be be working on at least two other gold zones on the property. It has already drilled 12 holes on the No 20 zone about three miles to the north of the No 3 zone. Eleven of the holes intersected gold values with the best being 13.5 ft grading 0.305 oz gold per ton or 52 ft grading 0.105 oz.

Ore on the No 20 zone has been delineated to surface over sufficient widths for an open pit operation. Chesbar’s latest 12 holes probed to a depth of 400 ft. Further drilling will likely be directed to test the depth potential of the No 20 zone.

Murgold President Charles McAlpine says the property’s location close to services is an important factor in its development. Highway 144 connecting Timmins and Sudbury runs through the property, almost cutting it in half. Hydro is similarly accessible and the nearby community of Gogama can provide housing and other services for the work crews.

Any property that has easy access to such services stands to benefit in lower initial capital costs and in lower operating costs as development and, potentially, production goes on.