Queries Kennco can earn 30% of Dundee/N.A. bet

I am writing to enquire about the Dundee-Palliser/North American Rare Metals’ Vezza property near Matagami, Ont. According to rumors, upwards of two million tons grading 0.25 oz gold per ton are contained on the property.

However, it is a little confusing as to who owns what in this venture. Dundee and N.A. Rare share a 50-50 ownership but your Canadian Mines Handbook indicates that Kennco Explorations can earn 30% in the joint venture. Kindly advise. R.P., Amos, Que.

We can confirm that Dundee- Palliser Resources (TSE) and North American Rare Metals (VSE) each have a 50% interest in the Vezza properties south of Matagami in Northwestern Quebec.

After spending $1,340,000, Camindex Mines (TSE) held a 71.6% interest in the Dundee-Palliser properties. But the property interest was recently converted to 1.5 million Dundee shares. As a result, Camindex holds a 41.8% interest in Dundee-Palliser.

Located about 20 miles east of Joutel, the property comprises 203 claims and about 100,000 ft of diamond drilling has been completed to this point.

As you say, reserves have recently increased to 2,243,000 million tons grading 0.15 oz gold per ton (using a cutoff grade of 0.08 oz) and with drilling still in progress, the latest results extend the deposit’s strike length to 3,300 ft, at a depth of 1,000 ft.

The reserves are hosted in a gold- bearing alteration zone which the partners are testing via a 120,000-ft fill-in drill program which is schedule to finish later this month. Dundee-Palliser and North American Rare are currently contemplating a 1,200-ft vertical shaft but no decision is expected until August.

“When we complete the current program we are just going to sit back for a couple of months and look at the situation,” Dundee- Palliser President Richard Brissenden told The Northern Miner recently.

As reported (N.M., Feb 15/88), the shaft is likely to cost about $8 million which would bring total expenditures at Vezza Twp. to about $11 million since 1986.

Kennco Explorations has an option to earn a 20% to 30% interest in the project during a 2-month period beginning Sept 30, 1989. To earn a 50% interest, Kennco must put up 2.85% of the amount spent on the property at that point. According to Brissenden, that amounts to $6 million to date.