Wait for assays sends Fort Knox on frantic ride

Speculation over a second batch of results from Fort Knox Gold Resources’ (TSE) base metal play in Fawcett Twp., near Shining Tree, Ont., boosted the stock over the $3 mark during the first week of December.

Responding to heavy promotion, investors pushed Fort Knox to the top of The Toronto Stock Exchange’s most active mines list before the exchange issued a temporary halt trading order Dec. 4.

But since core from two recent holes on the company’s nickel discovery was just in the process of being split, Fort Knox said assays cannot be expected until mid-December. Hearing this, disenchanted investors began to unload stock as quickly as they had scooped it up, sending it spiralling down to $2.35 before closing at $2.72.

On site, a third hole is probing the nickel discovery while a second rig tests a strong off-hole conductor from hole NG-1. Completed in early autumn, NG-1 intersected a 200-ft. interval of interlayered sediments and pyroclastics containing anomalous copper, zinc and lead mineralization (T.N.M., Oct. 7/91). The best assays within the interval were 619 parts per million (0.06%) for copper, 1.3% for zinc and 0.3% for lead. After several inquiries about the Fort Knox play, Richardson Greenshields analyst Ray Goldie issued what could be construed as a sell recommendation on the stock. Although Goldie believes Fort Knox has an interesting prospect, he says the shares of Timmins Nickel (TSE) and Black Hawk Mining (TSE) “offer better value as nickel exploration plays.”

“They’ve (Fort Knox) got a couple of good-looking holes, but I think the market’s paying too much for it,” Goldie told The Northern Miner. Although Inco (TSE) has a 40.9% interest in Fort Knox and is available to the junior for consultation and sample analysis, the nickel producer is not directing Fort Knox’s exploration program.