Investment Comment Cortez acreage makes Coral a buy

Despite its prominent land position in the Carlin and Cortez gold trends near Elko, Nev., little has been heard lately from a Vancouver- based exploration company called Coral Gold.

While American Barrick Resources and Newmont Gold were announcing around one and a half million oz in new reserves at their Carlin gold mines last month, Coral was quietly building up its Carlin land position before resuming exploration on six Nevada projects.

Since Coral is now one of the few companies with mineral holdings in both the Carlin and neighbouring Battle Mountain/Cortez gold trends, it is likely that the investment community will be keeping a close eye on this company.

With six projects in its portfolio of Carlin and Cortez area acquisitions, Coral now has a Nevada land position of approximately 9,000 acres according to a research report by Pacific International Securities (a member of the Vancouver Stock Exchange).

Published just a month before the infamous stock market crash, the report rates Coral as one of the leading juniors in the Cortez/Carlin trend and an excellent buy.

As if to support that recommendation, Coral recently attained unofficial producer status in a region where estimated reserves are reaching South African proportions. Rain Mine As reported (N.M., Nov 16/87), in a 45-mile stretch of land bounded by Newmont Gold’s Rain mine to just below Rayrock Yellowknife Resources’ Dee mine to the north, some 27 million oz of gold is known to lie in 21 deposits.

After outlining around 5 million tons of 0.05 oz gold per ton in two main zones at its 6,000-acre Robertson gold project 30 miles southeast of Battle Mountain, Coral is conducting a heap leach test on a 10,000-ton test pad.

With mid-1988 slated for a commercial production start-up, project manager Dave Arnold said he expects the 100%-owned (less royalties) project to operate at an initial rate of 3,000 tpd before gearing up to around 5,000 tpd.

That adds up to annual production of 55,000 oz annually from the Robertson project where a drill rig is attempting to connect the 2,000 x 800-ft Gold Pan and Gold Quartz zones.

Tests at Robertson show that heap leaching of uncrushed ore produces a 70% recovery rate over a 3-month period while crushing to — 5/8 indicated a recovery of 78.8%. Goldstrike Mine

However, since the project lies on a 300-mile fault which hosts a number of Carlin discoveries including Barrick’s Goldstrike mine (460,000 oz by 1991) the potential exists for increased production.

Analyst Paul Wilkman says Gold Pan could be part of a much larger and possibly higher grade orebody than previously expected. “It appears that this zone lies some 150 ft below the surface in the Gold Pan zone and angles upward as it extends westward,” he said.

According to a Nov 5 report, drilling to test one of the previously unexplored areas of the property produced a 25-ft intersection grading 0.09 oz 3,000 ft from the Gold Pan and Quartz zones. Coral says this confirms the presence of three large and previously unknown ore zones to be tested this winter.

While the Robertson property makes Coral Gold Nevada’s latest gold producer, the company has a number of other exploration plays. In the Nevada area they include:

* The 2,000-acre Swales Mtn. property hosting a “window” in the upper plate of the Roberts Mtn. overthrust.”These openings in the thrust contain most of the deposits now in production along the Carlin belt,” said Wilkman. Exploration so far includes trenching and channel sampling. Colorback Property

* The 550-acre Colorback property which Coral acquired earlier this year. Located three miles north of the Robertson project, it contains anomalous gold values which Coral has yet to release.

* The 1,560-acre Modoc property located three miles from Battle Mtns’. Fortitude gold mine. Operated in a joint venture with Orion Minerals of Nevada, Modoc has showed significant values in gold, silver, copper, lead and zinc.

Coral also retains an option to earn a 60% interest in the Love Oil joint venture property in British Columbia’s Bridge River Valley. Samples from recent surface trenching yielded an average grade of 2.30 oz over a width of 9.4 ft.

The Love Oil property adjoins the former Bralorne and Pioneer gold mines which produced over four million oz gold between 1897 and 1970.

With a cash position of $1.4 million (which doesn’t include a $1.9 million private placement completed in April) and 6.6 million shares outstanding, Wilkman says Coral Gold is well managed and able to raise the funds needed to pursue the potential of the Robertson project.

Coral shares were trading recently on the Vancouver Stock Exchange at $5.50 in a 52-week range of $2.60 and $9. .N13

** Northfield cancels plan to drill Queenston bet **

Northfield Captial Corp. and Canadian Ore Milling have cancelled a $50-million agreement to earn a 50% interest in Queenston Gold Mines’ Kirkland Lake West property, The Northern Miner has learned.

Northfield had tentatively agreed to spend $1 million and later $3 million on surface exploration by Dec 31, 1988, before bringing the Kirkland Lake, Ont., property to a positive feasibility stage in 1994.

But after requesting an extension to the Oct 1 closing deadline, Northfield has informed Queenston that the deal if off.

“The majority of new flow- through issues aren’t going to grass roots exploration projects,” explained Northfield President Robert Cudney. “That was the stumbling block.”

With Northfield now out of the Kirkland Lake west picture, Queenston is now considering a number of options for the wholly-owned Kirkland Lake gold prospect located beside Lac Minerals’ Macassa mine site.

While Chairman Hugh Harbinson refused to speculate on what his company will do, a street rumor has suggested that Queenston is involved in discussions with an Australian group.

But Queenston has denied that any such discussions are taking place.