Timmins Report Moneta to restart drilling

Diamond drilling will resume in June on the Michaud Twp. property of Moneta Porcupine Mines (TSE) in the Harker-Holloway area east of Timmins, says Vice-president Francis Yungwirth.

A diamond drilling program is scheduled for the 40 owned claims and 86 optioned claims in the Michaud group. The diamond drilling program will cover 10,000 ft and will be completed by the end of the summer.

Three of the Moneta Porcupine claim groups are joint ventures with Noranda Explorations and Canamax Resources (TSE) with Canamax as the operator. The other two hot Harker-Holloway properties are the Michaud claim group and the Nahanni Mines (TSE) claim group, adjacent to the Michaud group.

Moneta Porcupine has an option to earn a 50% interest in the Nahanni property by spending $1 million on exploration by March, 1990. A further expenditure of $1 million will earn Moneta a 100% interest in the property, plus 80% of the net profit after payout.

Regarding the scheduled programs on the Michaud and Nahanni claim groups, a program of induced polarization will be undertaken on the northern portion of the claims, north of the Porcupine- Destor fault, during the summer, and toward the fall a reverse- circulation drilling program will be started to fill in some of the gaps where drilling has not yet taken place on the Nahanni and Michaud claims.

Yungwirth said Moneta’s geologist is now in the process of calculating reserves on the Michaud claim group. The recently-completed drilling program on the claim group came up with some startling grades — in places grades were from 0.4 to 1.0 oz gold per ton — but for the most part, grades have been in the area of 0.08 to 0.10 oz.

Immediately adjacent to the Michaud claim group, to the east, are groups of Noranda Exploration and Destiny Resources claims. To the west are the Falconbridge Ludgate claims, while to the north are claims held by Lacana Mining Corp. Also nearby, about half a townsite away, are claims of Jonpol Explorations.

The closest of Moneta’s properties to having a production decision made is the Michaud group of claims. “The target date for underground exploration is 1990,” said Yungwirth. “For the moment, our money is better spent proving up reserves.”

In the immediate Timmins area, Moneta Porcupine has three groups of interesting properties, including the former-producing Moneta Porcupine Mines, one of the highest- grade producers in the history of the Porcupine camp. Nearby are the Mace group of claims, but both of these properties are sitting idle for the moment.

The Porcupine Prime group of claims is at the centre of Tisdale Twp. In 1987, Moneta undertook a program of trenching and diamond drilling and Yungwirth says the property looks “extremely interesting.” He adds it’s possible Moneta will be working the property with a joint venture partner by the summer of 1988.

Finally, in the Timmins area, there is what is known as the Pit group of claims, north of Timmins, in Murphy Twp. There are two distinct potentials in the Pit group, said Yungwirth. “Not only is there the potential for mineralization, but we have gravel inventory on that ground as well, discovered because we undertook a program of overburden drilling which began last summer and just concluded this past February. The whole area looks interesting, but it will take a lot more work.”

But for the lack of a paltry $1.3 million, a little development on the shores of Porcupine Lake in Timmins is on hold as far as a production decision is concerned. That’s all it would take to bring the Hunter gold mine of Wabigoon Resources (COATS) of Toronto into production, says the project consultant. “The big thing for this organization is just getting money,” says Dr John Kirwan, a New Hampshire native who spends most of the year in Timmins. “Last year we formed a joint venture partnership with Master Resources and Development (VSE) of Toronto. They have already put up $1.5 million out of a committed $2.8 million in order to earn a 50% interest in the property.

“But now we’re not sure that they can raise the other $1.3 million, so if alternative financing could be arranged, I’d be delighted.”

Proven, probable and possible reserves were calculated in 1940 at 160,000 tons at 0.237 oz gold per ton. Last year’s funding was enough to pay for the erection of a headframe and a hoist on the property, said Kirwan. He added the mine has been dewatered to 400 ft and 4,000 ft of diamond drill holes have been drilled from underground.

“We previously did our drilling from the ice on the late over the winter,” he said, “but this year ice conditions just weren’t good enough.”

One of the difficulties the company has had in raising money, said Kirwan, is that Wabigoon will not relinquish control of the site. “It turns out that most joint venture partners want to take control of the property, but Wabigoon won’t let them.”

Plans are to drive a drift at the 400-ft level in order to explore a 1,450-ft ore-bearing zone which grades 0.26 oz gold per ton over a width of 5 ft, said Kirwan. He added drills were set up to explore below the level at which the mine was worked before, so it is all new ground that is being explored. For example, there have been grades returned from 950 ft of 0.36 oz.

Despite the current shortage of capital, the Hunter property is in good shape financially, said Kirwan. He says all the infrastructure has been paid for by flow-through shares, so there is no payback required.

No figure has yet been released as to ore reserves on the property, which was a producing gold mine from 1933 to 1940. Part of the reason is that so far drill crews have drilled only one row of holes.

During its three years of production, the Hunter mine workers mined 10,000 tons of ore at an average grade of 0.18 oz. The property was originally staked in 1907, the first of the mines of the Porcupine to be staked.

At least one Timmins investment analyst is expressing a certain reservation of the federal government’s new Canadian Exploration Incentive Program, a program of paybacks designed to replace the scrapped Mining Exploration Depletion Allowance, which winds up Dec 31.

Bob Peters, manager of the Timmins office of Midland Doherty, agrees there is a definite advantage to having the incentive payment made to exploration companies every three months, as is stated in the terms of the new plan. “But in the market, flow-through shares still have to be marketed,” he said, “and there still may be some resistance to flow-throughs as an investment.”

Peters is doubtful exploration levels in Canada will reach the same feverish levels they reached in 1987. “Always, when you interrupt a program then start it up again, there is some loss of continuity,” he said. “Up to now, there has been little interest in flow-throughs because of the uncertainty about what the government was going to do.”

Still, he said, the bottom line is that the incentive program is not quite as good as it was with the Mining Exploration Depletion Allowance but, when compared with other tax-saving methods, he feels the new program will still be marketable.