Committee Bay seals deal with Gold Fields

Vancouver — With the results from a 1,477-metre drill program in hand, Gold Fields (GFI-N) has elected to proceed with a joint venture agreement at Committee Bay Resources‘ (CBR-V) flagship gold property northeast of Baker Lake in Nunavut.

The companies first got together in February, when the major signed a letter of intent to pick up a majority interest in the large land package. First, Gold Fields bought 1.3 million units in the junior priced at 30 each. A unit holds one share and one warrant, which is exercisable at 40 for a year. The South African major can then take a 55% interest in the 2,023-sq.-km project by spending US$5 million over four years. Gold Fields can go on to earn a 65% interest by spending another US$5 million and 75% by completing a feasibility study. Committee Bay retains the diamond rights on the property, subject to a 1% royalty payable to Gold Fields on the sale of any diamonds.

So far, Gold Fields has spent $1.3 million on the property, the bulk of which went into a summer drilling program that tested the strike and depth extension of mineralization in the Three Bluffs zone, which was discovered in the mid-1990s.

Previous drill holes identified a 420-metre long gold-bearing iron formation that averaged 1.22 grams gold per tonne over 57.3 metres. Within this broad zone, two higher-grade sections yielded up to 4.8 grams gold over 6 metres and 9.3 grams gold over 2 metres.

The latest bout of drilling extended the zone to 700 metres in length, and to 50 metres below surface.

Holes 1 and 2 tested the down-dip extension of the known mineralization and returned narrow zones of up to 12.74 grams gold over 0.7 metre.

Hole 3 was collared 200 metres to the east and cut 12.8 grams gold over 2.8 metres.

The remaining three holes tested the zone along strike for an additional 240 metres starting 50 metres east of hole 3. The westernmost hole, no. 4, cut an impressive 19.93 grams gold over 5 metres.

The amount of sulphide and silicification increases moving east, with hole 5 returning 45.5 grams gold over 6.9 metres and hole 6 yielding 27.4 grams gold over 9.4 metres.

Mineralization is hosted in poorly banded-to-massive iron formation situated in the central part of the greenstone belt. The iron formation has been traced for 6 km along strike, with chip samples collected in the central and eastern portions of the 1.8-km-long zone returning 11.6 grams gold over 4.8 metres and 19.04 grams gold over 3.9 metres, respectively.

Moving 120 km northeast to the Inuk showing, where previous grab samples returned up to 1,893.6 grams gold and six holes were drilled in 1997, the partners drilled 5 holes.

The best results came from hole 1B, which returned 16 grams gold over 12.6 metres. This hole followed up the 2.6 grams gold over 40.1 metres, including a higher-grade section running 9.9 grams gold over 7 metres cut in an earlier drill hole.

Two of the holes tested the iron formation along the northern limb with hole 2 yielding 2.7 grams gold over 10 metres and hole 3 failing to cut any significant values.

Holes 4 and 5 targeted the southern end of the hinge returning a high value of 2.2 grams gold over 1.5 metres.

In the nearby Mist-Koffy area, where samples of silicified iron formation returned up to 31.3 grams gold, hole 1 cut 3 grams gold over 3.4 metres. Holes 2 and 3 were collared on either side of the hole at 60-metre spacing and failed to cut any significant values.

Overall, 40 gold showings have been discovered on the project area, with mineralization occurring in several lithologies, including iron formations, mafic and felsic volcanic rocks, and greywackes. During 2003, reconnaissance work has focused on 7 targets identified by airborne geophysics.

The Committee Bay project marks the northern extension of the rock units that host Cumberland Resources‘ (CBD-T) 3-million-oz. Meadowbank gold resource, 150 km to the southwest.

Committee Bay acquired the ground last July when Arta Enterprises, a capital pool company then listed on the TSX Venture Exchange, acquired all its shares in a deal that saw 2.3 Committee Bay shares exchanged for every Arta share. The transaction involved 4.7 million shares priced at 25 each, plus 1.4 million warrants to acquire 1.4 million flow-through shares that can be exercised at 25 per share for two years. Another privately held company, 895924 Alberta, had a 48.6% interest in Committee Bay. Shares in the new Committee Bay began trading in August 2002.

With the Gold Fields deal finalized, Committee Bay completed a $1.9-million financing comprising 2.5 million units priced at 75 each. A unit holds one share and half a warrant. A full warrant is exercisable at 85 for a period of 18 months. Insiders of the company picked up 196,666 units.

Committee Bay now has 18.7 million shares outstanding (22.1 million fully diluted) and trades at around $1.50.