LAC to gain from BIG’s exploration potential

According to broker Shearson Lehman Hutton, the exploration team of BIG and its predecessor St. Joe Gold have “one of the most successful records in the industry.” Three of Bond’s newest gold mines — Richmond Hill, Golden Patricia and Bullfrog — were all “in house” discoveries, notes Shearson.

Last month, LAC agreed to buy a 65% stake in BIG for $373.8 million(US). While the Toronto- based company said it has no immediate plans to buy the remaining 35% of BIG it does not already own, some analysts have sugges ted LAC will soon expand its holding.

With a neutral price outlook for precious metals prevailing, however, investors greeted news of the planned marriage between LAC and BIG with a yawn. Posting only minor gains on news of the acquisition, LAC’s share price has been firm at the $12.75-level in active trading recently.

Tom Walthier, vice-president of exploration for Bond Gold, said: “Of our more than 100 advanced exploration projects, seven have world-class potential.”

Among BIG’s top exploration bets in Canada are its Muskeg Lake project, which covers ground contiguous to the 77,000 oz-per-year Golden Patricia mine near Pickle Lake, Ont. Two other promising projects are the Shoal Lake deposit near Kenora, Ont., and a recent discovery at Red Mountain near Stewart, B.C. The Muskeg Lake project comprises claims to the northwest and

southeast along the Meen- Dempster greenstone belt which hosts the Golden Patricia mine. Although no major new discoveries have yet been announced, several gold targets are being drilled, and much of the exploration potential is still largely untested.

The company is also exploring the Shoal Lake property near Kenora, Ont., in a 50/50 joint venture with Kenora Prospectors & Miners (COATS), a Toronto-based junior firm controlled by Susan Green. To date, surface drilling has outlined geological reserves of 850,000 tons grading 0.35 oz gold per ton with a cutoff grade of 0.15 oz. Financing plans for the next phase of exploration are under discussion by the joint venture partners.

In British Columbia, BIG recently announced a significant new gold discovery on its 100%- owned Red Mountain property, nine miles east of Stewart. Drill intersections of up to 216 ft grading 0.28 oz gold were reported from one zone. An aggressive exploration program is planned next year to follow up the discovery.

Toronto-based consultant Watts Griffis & McOuat is conducting an independent review of BIG’s Mahoma gold project in Uruguay, where a production decision is pending for a 30,000 oz-per-year gold mine. BIG controls prospecting rights on 310,000 acres covering greenstone terrain in southern Uruguay.

Other exploration properties given a high priority by BIG are its Rye project in north-central Nevada, and several areas around the company’s El Indio mine in northern Chile. At the Rio del Medio area, three miles north of the main El Indio complex, underground exploration and surface drilling have outlined a “major new vein system” which is parallel with the El Indio veins. A resource of 200,000 oz of gold has been outlined, and appears to be open along strike and at depth, according to BIG.

Over-all, the company says, it will be spending about $19 million(US) on exploration worldwide in fiscal 1990.

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