Hot hole at the Goldstrike for Am. Barrick/ Fr.Nevada

A terrific hole, all in sulphide ore, of 620 ft grading 0.3 oz gold per ton has been pulled on the Goldstrike property in the Carlin gold belt area of Nevada by operator American Barrick Resources.

This hole which intersected gold continuously from 1,110 ft to 1,730 ft and averages 0.3 oz is the prime cause of American Barrick’s share price to race up $3.13 to $39.25 a new high on the Toronto Stock Exchange in the past several days. At press-time the shares were at the $38 level.

This hole has meant good news also for Franco Nevada Mining Corp. which receives a 4% net smelter royalty and a 5% net profit interest on the property, which has been in continuous operation since 1979 at a rate of 44,000 oz of gold a year. Franco shares ran up $3.38 to $8.38, a new high. At press-time Franco Nevada was trading at $8.25.

The hole is part of an exploration drilling program at depth at the property. The drilling has indicated a number of significant intersections of sulphide gold mineralization below a depth of about 1,000 ft. Shallower oxide deposit

Above that depth, “we are dealing with an oxide deposit close to the surface which has proven and probable reserves in the area of 12 million tons grading 0.05 oz gold per ton,” explains Robert M. Smith, chief operating officer for American Barrick.

Barrick has budgeted between $4 and $5 million on drilling the Goldstrike property this year. The funds will go towards fully outlining the shallower oxide reserves, as well as the deeper sulphide gold mineralization between the 1,000 ft to 1,700- ft depths. “After that we may go deeper,” says Mr Smith.

There are currently four deep drilling rigs in operation on the property.

“Right now we’re just getting our feet wet,” he says, adding “obviously these results warrant considerable more work.”

American Barrick came on as 100% owner and operator of the Goldstrike property in January after its acquisition of Western States Minerals, a private company based in Minneapolis, and Toronto- listed Pancana Minerals. (N.M., Dec 22/86). Gold production up 60.5%

The Goldstrike is one of six gold mines in which American Barrick has interests. The company’s gold production for the year ended Dec 31, amounted to 186,072 oz of gold, a whopping 60.5% increase over the 115,952 produced in 1985. And annual gold output is expected to more than double by mid-1988 to about 400,000 oz, says Mr Smith.

Looking at year-end financials, Barrick netted a profit of $15.1 million or 74 cents per share, a very healthy increase over the $4 million or 21 cents per share in the year earlier period. In 1985 the company incurred a loss for the year after extraordinary items of $22.4 million. There were no extraordinary items in 1986.

Revenues from gold sales in 1986 amounted to $89.8 million compared with 448.5 million in 1985.