Novamin targets $8m. for Ontario/Quebec bets

Following the completion this month of a $12.4-million share offering by Novamin Inc., the mineral explorer will be essentially debt free and busy with an $8-million exploration program.

A large part of the offering will be used to pay off debt of $6.5 million owing to Sulpetro Ltd., an oil company which sold its mineral assets to Novamin in 1985. The purchase price was $13.2 million, of which $6.5 million is due by the end of April. Following that payment, Novamin’s only outstanding debt is a $1.5-million debenture held by Sulpetro on the Canadaka silver properties near Cobalt, Ont.

A large portion of the underwriting, $4.2 million, consists of a flow- through share offering which will fund part of the company’s exploration effort. The largest allocation of funds is for Novamin’s Cadieux zinc property. Located near Renfrew, Ont., the Cadieux property hosts probable and possible reserves of 997,370 tons grading 9.6% zinc per ton.

A production decision will require at least 1.2 million tons grading 11% zinc, the company says. In order to improve tonnages and grade, Novamin has budgeted $3 million for the Cadieux property. Work will include underground exploration and a feasibility study. Eldor Resources holds a 15% participating interest in the project.

Another $2.3 million will be spent on Novamin’s Rundle gold property, approximately 25 miles south of Foleyet, Ont. Drill-indicated reserves total 275,000 tons grading above 0.2 oz. Recent drilling has discovered another ore shoot 600 ft east of the shaft. Some of the better intersections from the new zone include 14.1 ft grading 0.23 oz and 14.1 ft assaying 0.2 oz. Both sections are reported as true widths. If sufficient tonnage can be outlined, Novamin will progress to an underground exploration program. This, the company says, could begin by year-end.

Encouragment is also coming from the Tonawanda property, which is one of the 30 properties within the 40,000-acre Darius project in Quebec. Novamin with 51% is the project operator. St. Joe Canada holds the remaining 49%. Novamin plans to spend $1.5 million this year on the Darius grounds. This will include more drilling on the Tonawanda, located five miles east of Cadillac. Since January, 10,500 ft of core has been drilled which has traced the gold- mineralized zone for 2,460 ft. The zone averages 0.23 oz across 9.9 ft.

GEOGRAPHICAL LOCATION: Ontario; Quebec