Queries Gordex Minerals no longer trading

Can you tell me what is happening with Gordex Minerals? I notice the shares have not traded since last summer and there has been no news from the company either. R.G., Montreal, Que.

Financial problems brought on by last year’s slump in the gold price left this once hopeful junior mining company fallen on hard times. It has been under a cease- trading order since July 28, for failure to file audited financial statements.

With the gold price moving upward again, Gordex’s property in southern New Brunswick might be worth a second look. But the company’s fortunes are likely to depend on whether it can attract additional funding to reactivate its small low-grade gold mining operation near the Bay of Fundy.

President Morton Gordon told The Northern Miner he has spent the last six months negotiating with the Ontario Securities Commission in an attempt to resume trading on The Toronto Stock Exchange, but he declined to speculate when the situation might be cleared up. “First, we have to clean up the company,” he said.

Gordex’s share price had fallen to a low of 10 cents before the cease trade order was issued during the gold slump last year. That price is down significantly from an earlier high of $2.05 in 1988.

“We have a cash problem and it’s a terrible thing when you don’t have any money in the junior mining business,” said Gordon. “In the meantime, we’re keeping the property on standby and I’m confident we can get back on the board again.”

He said the company’s Cape Spencer gold property in New Brunswick hosts open pit reserves estimated at about 400,000 tons grading 0.06 oz. gold per ton and a higher-grade underground zone (300-400 ft. deep) with preliminary reserves on the order of 300,000 tons grading 0.20 oz. gold.

After completing its due diligence studies last year (when gold was around US$360 per oz), Gordex’s potential partner Societe Miniere Sphinx (ME) opted not to pursue a deal with the company on the Cape Spencer project. Sphinx Vice-President Bouchard Britt said Gordex’s debt problems kept his company away. The deposit’s stripping ratio of 3:1 combined with the low gold price made the project unattractive at the time, he said. Its proximity to the shoreline of the Bay of Fundy could also hamper deep mining below the water table, he added.

A carbon-in-pulp processing plant at the site has been sold, but the exploration potential of the property is still believed to be significant. With an improving gold price, the project could get a second chance, once Gordex clears up its financial problems.