Armistice taking on partner at Virginiatown gold bet

GSR Acquisition, which wants to revive the Kerr property’s bankrupt owner, Golden Shield Resources, and its operations, has been granted an option to acquire a 49% interest in the Armistice property by spending $5.5 million on exploration work within 18 months.

The plan calls for GSR to explore the Kerr 21 zone from the 3850-ft level of the Kerr mine. The company proposes rehabilitating an abandoned drift on the 3850 level which enters the Armistice property about 1,500 ft north of the Armistice shaft.

GSR hopes to extend this drift by 1,900 ft parallel to the Kerr 21 zone uncovered by deep drilling earlier this year by Armistice. Drilling totalling 17,000 ft on the Armistice property would be undertaken.

After GSR earns its 49% interest, a milling agreement may be negotiated between the company and Armistice, should GSR succeed in acquiring the Kerr mill.

The Armistice property lies immediately west of the Kerr mine, a prolific gold producer which went into production in 1938. Armistice is hoping to prove the main Kerr deposit down-faulted at the Kerr property’s western boundary, and continues on to the Armistice side.

Armistice deepened an existing shaft and drove a 1,200-ft-long drift at 2,250 ft to allow for drilling of both the deeper Kerr zone and the shallower Sheldon zone.

Armistice officials are confident they have found the Kerr zone, which Guy Hinse, vice-president of exploration, said starts at a depth of about 2,400 ft and may continue to 7,000 ft. Drill holes into the zone to date have been widely spaced.

The Kerr mine was closed this past summer when Golden Shield declared bankruptcy. GSR began negotiating with the trustee shortly thereafter to take over Golden Shield.

While the Armistice exploration program had not been started by presstime, Frank Smeenk, GSR secretary-treasurer, said a leasing agreement has been reached with the trustee to allow the work.

First secured creditors, joint owners of a $3-million debenture, are three officers of Golden Shield: A. D. G. Reid, R. J. Mongeau and J. G. Tait.

Proposed by GSR is a revival of Golden Shield with different operators and a new board of directors.

GSR is also negotiating with Deak Resources (TSE) for the milling of ore from four base metal deposits in the Rouyn-Noranda, Que., area. Proposed is the daily treatment of 1,500-2,000 tons at the Kerr mill. Deak and Noranda Exploration have been negotiating a mining agreement for the Quebec properties; Deak would be the operator.

Planned by GSR is the modification of one of the Kerr mill circuits to treat the base metal ores, the work to be part of a $10-million rehabilitation package for the mill. GSR is asking the Ontario government for a loan guarantee to cover the expenditure.

]]>