Mishibishu is hotter area that ever

Hemlo Gold Mines (TSE), which is heavily involved in the promising Misibishu area of northwestern Ontario, reports it has an agreement with Caribbean Resources (VSE) and Exmar Resources(VSE) for the exploration and development of the Pukaskwa River property in the Mishibishu area.

The agreement covers 274 claims in which Caribbean, Exmar and Mishibishu Resources each hold a one-third interest.

Under the agreement, Hemlo will pay the vendors $1.2 million and spend $5 million on exploration over a 4-year period to earn a 51% interest in the property.

The deal includes an initial payment of $125,000, payable in Hemlo shares, and spending of $750,000 on exploration in the first year. After Hemlo earns its interest costs will be shared 49-51% for the next $15 million, after which the vendors will be carried through production. The vendors, thus, would pay a maximum amount of $7.35 million to maintain their 49% interest, or $2.45 million per company.

The Pukaskwa property covers a 13-kilometer strike length along the favorable metasedimentary-metavolcanic sequence in which the Mishibishu Lake gold deposits occur.

A total of 5,868 ft were drilled in 16 holes this past winter to investigate seven of the surface showings and soil gold anomalies. Though no commercial grade intersections were obtained results were reported to be “very encouraging” with all holes returning anomalous gold values up to 0.140 oz gold per ton, across 2 ft.

Caribbean, Exmar and Mishibishu have retained 36 claims covering an additional two km of this zone adjoining claims held by Central Crude and Joutel, (under option to Hemlo Gold). A major exploration program including diamond drilling will be done by the three companies on this property,

Hemlo Gold, has also announced it has acquired 151,500 shares of Central Crude (VSE), of which 62,500 were by way of purchases on the Vancouver Stock Exchange, and 89,000 shares from treasury through exercise of warrants.

These shares, together with 492,900 previously held, bring Hemlo Gold’s holdings up to 644,000, representing 14.1% of Central Crude’s 4,561,702 issued and outstanding shares.

Not content with its high level of participation at Mishibishu in Ontario, Hemlo Gold as well has concluded an agreement on a property 75 miles south of Las Vegas, Nev., where it will explore the Hackberry Mountain property of Channel Resources , and will earn a 50% interest by spending up to $5 million over a 5-year period.

Hemlo has already drilled four holes on a 15-hole program designed by Channel to test the northeast-southwest extension of the Hackberry Mountain fault zone.

Noranda is preparing to move in a third deeper drill to probe the No 8 zone, where most of the action has centred, below 500 ft. Recent results from the No 8 zone, which strikes for 3,300 ft across a dioritic intrusive include 26.2 ft grading 0.28 oz, 21.6 ft grading 0.11 oz, 15.5 ft grading 0.30 oz gold per ton, 8.2 ft grading 3.22 oz and 6.2 ft grading 0.57.

According to Richard Nemis, president of Central Crude, the geological environment is similar to Muscocho’s Magnacon property.