NEWS ROUNDUP (December 09, 1991)

New Legends Metals is commencing exploration on a 295-claim property near Casa Berardi, Que., held by Cross Lake Minerals (VSE) and Glen Auden Resources (TSE).

New Legends plans to trace the full extent of a 13-ft. wide drill intersection grading up to 0.19 oz. gold per ton using detailed geophysical (IP) surveys. The private company has the right to earn a 25% interest in the property by paying the partners $100,000, spending $250,000 on exploration and issuing 200,000 shares. A greater interest, up to 71%, can be earned with additional exploration spending.

A total of five drill targets have been outlined on the property based on results of geophysical (EM) surveys.

T&H Resources (TSE) has agreed to option a 15-unit claim block in Asquith Twp., near Shining Tree, Ont., from Strike Minerals (CDN).

Under the agreement, T&H has the right to earn a 50% interest in the property by paying Strike $42,500 and spending $100,000 on exploration over two years.

The claim block lies five miles west of Fort Knox Gold Resources’ (TSE) recent discovery and encompasses 11 airborne electromagnetic conductors. Strike says surface sampling in the vicinity of the conductors has established anomalous copper and zinc values.

Ground geophysics and diamond drilling will begin this winter.

An earn-in agreement between Dessir Resources (VSE) and A.T.& E. Mining on the Gibbs claims in Mariposa Cty., Calif., gave Dessir the right to earn a 50% interest by paying A.T.& E. a total of US$1.4 million and issuing three million free trading shares.

Previous reports stated the company had to fund US$1.4 million in exploration expenditures as well as issue the three million shares. Dessir recently completed payments totalling US$1.4 million and has issued a total of 200,000 free trading shares to A.T.& E.

As part of the earn-in agreement, project operator A.T.& E. recently supplied Dessir with an engineering report valuing the claims at a minimum of US$4.5 million.

The Vancouver Stock Exchange is now reviewing the report prior to approving the issuance of the remaining 2.8 million shares to A.T.& E.

Wabush Mines, with operations in Wabush, Nfld., and Sept-Iles, Que., will reduce its production by 25% in 1992. About 200 workers will be affected by the decision.

The Sully iron mine in Labrador, which has the capacity to produce six million tons per year, will produce at a new annual level of 4.5 million tons. Its estimated 1991 output is 4.6 million tons.

Wabush Mines, which also operates a concentrator and a pelletizing plant near Sept-Iles, is owned by a consortium of steel producers, including Stelco, Dofasco, Acme Steel, Finsider International, Inland Steel and Cleveland Cliffs.

The decision to cut back was attributed to reduced pellet demand by most of the mine owners, rising production costs and the bankruptcies of two U.S. steel companies.

Canuc Resources (TSE) says it is discussing a possible corporate merger, but has not named the other company.

“These discussions are encouraging, but it is premature to state whether an agreement will be reached,” said President Kenneth Murton in a written update to shareholders.

During the first nine months of the year, Denison Mines (TSE) produced 96,021 lb. uranium oxide in broken ore from Canuc’s royalty property. This compares with 162,066 lb. for the same period last year.

Canuc receives a royalty of $1.25 per lb. of uranium oxide in broken ore plus an annual allowance for inflation. The mine is scheduled to close in the second quarter of 1992.

Joint venture partners Jonpol Explorations (TSE) and T&H Resources (TSE) have resumed drilling on their Garrison Twp. gold property near Matheson, Ont.

At a cutoff grade of 0.15 oz., preliminary reserves on the property are estimated to contain 513,000 tons grading 0.28 oz. gold per ton. At a cutoff grade of 0.08 oz., the reserves increase to one million tons grading 0.18 oz. gold.

The current drill program will test the gold zone at depths of greater than 1,000 ft., says 35.7% owner T&H.

In Sonora, Mexico, Noranda Exploration has agreed to explore the partners’ property on behalf of Hemlo Gold Mines (TSE).

Noranda can earn a 71% interest in the property by paying Jonpol and T&H $2.2 million and spending $700,000 on the property. Target identification and drill site selection are under way.

In a bid to diversify from its resource focus, Toronto-based Arimathaea Resources (TSE) has agreed to acquire British company Merton Associated Corp., for a combination of cash and shares.

Subject to regulatory approval, Arimathaea will pay $1.02 million in cash and issue 500,000 common shares and an $8.1-million principal amount convertible debenture. The transaction is scheduled to close Nov. 27. Merton’s only asset is 73% of the issued and outstanding shares of Van Diemen’s Land, a publicly traded company listed on the Australian and London stock exchanges. Van Diemen’s assets consist of about 55,000 acres of agricultural land, mostly in Tasmania.

The convertible debenture will bear interest at the Lloyd’s Bank prime rate plus 1.5%.

After completing a first-phase program of geophysical surveys and data evaluation, FMC Gold (NYSE) is about to begin a core drilling program on the Vera Cruz project in Lincoln Cty., N.M.

FMC optioned the project earlier this year after property owner Vera Cruz Minerals (VSE) reported some impressive gold and gold-copper assays over good widths from a reverse circulation drill program.

Vera Cruz said the IP results in the area of the breccia pipe indicate a southeasterly strike (the angle of the plunge is yet to be determined), with the anomaly still open 800 ft. to the south.

The junior said the program also led to the identification of two additional IP anomalies which indicate the breccia pipe area is not an isolated occurrence of sulphide-bearing mineralization.

Field evaluation of the geophysical anomalies is progressing along with geological mapping, and this work will be followed by the drill program.

Drilling is under way on Orient Resources’ (ME) Nelligan project, which falls within the same deformation corridor that hosts the Lac Shortt and Bachelor Lake mines in northwestern Quebec.

The program will test the depth extension of an outcropping gold zone identified along a strike length of one mile by geophysical (IP) surveys and mineralized outcrops.

The first hole has been collared next to a gold showing, where silicified and chloritized boulders assayed up to 0.13 oz. gold per ton.

Soquem, which is financing the $500,000 program, has the option to earn a 50% interest in the project.

For $40,000, KWG Resources (ME) has acquired the surface rights to a 14-sq.-km peat moss property in Lotbiniere Cty., near Val-Alain, Que.

The property hosts estimated reserves of more than 20 million tonnes. KWG, an affiliate of St. Genevieve Resources (TSE), plans to supply the raw material to produce activated carbons from a combination of altered peat moss and crystalline graphite.

Through its affiliate, Stratmin Graphite (ME), St. Genevieve has access to a 23 million ton graphite deposit near Mount Laurier, Que. The mine produces up to 1,150 tons of ore per day.

Activated carbon is used to make both cigarette and industrial filters. It also plays a significant role in gold extraction techniques.

A 100% interest in the Pistol Lake gold property in the Northwest Territories is being acquired by Leeward Capital (VSE).

Under the agreement, which is subject to regulatory approval, Leeward will pay $130,000 in cash and issue 200,000 shares during the next two years to an unnamed seller, who retains a 3% net smelter return interest. The agreement also includes a $1.5-million buyout provision.

Pistol Lake is 180 km northeast of Echo Bay’s Lupin gold mine. The property has undergone some exploration, eight gold occurrence have been uncovered, Leeward said.

Leeward is proposing a $1.4-million exploration program, including drilling, for 1992.

A deep drilling program consisting of ten 2,000-ft. holes is planned for the Ivanhoe joint venture in Nevada.

Partners Galactic Resources (TSE) and Cornucopia Resources (TSE) plan to spend up to US$1.7 million on the program with the first hole planned for January.

Depending on results, the 10-hole program may be expanded with an additional four 2,000-ft. holes.

Galactic and Cornucopia operate an open pit heap leach mine on the Ivanhoe property and produced about 18,253 oz. gold at the mine during the first nine months of this year.

The companies expect to drill at least one hole in the vicinity of a number of deep high-grade intercepts encountered last year. One of the 1990-holes intersected over 20 ft. grading 0.73 oz. gold at a depth of about 1,740 ft.

Production of crystalline flake graphite was recently increased from 10 tons per operating day to more than 16 tons, Cal Graphite (VSE) reports.

The company, which mines and concentrates graphite from a deposit north of Huntsville, Ont., is aiming for eventual full production of more than 60 tons daily.

The company says it has acquired property in Huntsville for warehousing purposes and to address its strategy for product finishing and carbon upgrading.

A writedown of about $2.9 million was announced, “to reflect diminution in the value of the assets which are not expected to provide future economic benefit,” Cal Graphite says.

American Reserve Mining (ME) has used raw data from Placer Dome’s (TSE) recent exploration program to calculate a “gold resource” of 584,381 tons grading 0.33 oz. gold per ton (cut) for the Paymaster gold mine project near Timmins, Ont.

American says it used a minimum mining width and a cutoff grade of 0.15 oz. per ton to calculate the resource between the 6,000-ft. and 6,700-ft. levels of the old mine.

Hosted by deformed and altered mafic volcanic rocks, the deposit contains two major zones of mineralization, No. 36 and No. 37. Both zones remain open to the east and to depth below the 6,700-ft. level.

The Paymaster project is on standby and maintenance status while Placer Dome completes an economic analysis of information to date.