Zenmac building strong postion

Starting from scratch just two years ago, Zenmac Zinc has increased the value of its investment portfolio to over $17 million, a well-attended annual meeting here learned. It includes 1,342,500 shares of Madeleine Mines and 1,000,000 shares of Anyox Metals. (All three companies are in the J. P. Sheridan stable). But the company’s main asset continues to be its 20% participating interest in the high grade zinc- copper-silver-gold deposit 70 miles east of here which is being developed to production by Minnova Inc., the former Corp. Falconbridge Copper.

Tuning up of the 1,000-1,200-ton plant is expected to commence by year-end, with full production likely by the end of the first quarter of 1988.

The mine is in a healthy ore position, with something like a 10-year mill supply above the 2,000-ft level including a sizeable surface stockpile.

Underground development is well advanced, although there has been no official change in the previously reported ore inventory of 3,415,000 tons grading 15.9% zinc, 1.0% copper, 0.96 oz silver and 0.03 oz gold. This is after allowing for a 20% dilution of zero grade. Within this is a block containing 615,000 tons grading 27.77% zinc, 1.3% copper and 0.06 oz gold.

While two deep drill holes put down from surface last year to test the down-dip extension of the orebody were disappointing, subsequent underground drilling from the bottom level (2,000 ft) has been much more encouraging, President H. Alex Pearson, who visited the operation recently, told the meeting. For while this drilling indicates that the downward extension of the orebody is narrowing and apparently bottoming out at the north end, it has been picked up below the level at the south end where it is both wide (30-40 ft) and rich (better than 20% zinc).

Total cost of bringing this mine into production will be in the order of $75 million, of which $50-$55 million will have been incurred since Minnova’s firm decision to proceed to production.

However, there appears to be some dispute between the two companies relative to the terms of the joint venture agreement that could end up in the courts or arbitration. Has own exploration bet

With its much improved financial position, Zenmac is becoming quite active in outside exploration, and has been evaluating a number of property submissions.

Of particular interest at this time is a promising zinc property in Tuuri Twp., 25 miles southwest of the Winston Lake operation. This is held under option from Eldor Resources, the exploration arm of Eldorado Nuclear. Zenmac can earn a 50% participating interest in this prospect.

The property is a large one, stretching along a favorable strike length for five miles in which eight conductors associated with strong zinc geochemical values have been located. Prior drilling by Gulf Minerals on one of these intersected 13.24% zinc across 11 ft or 4.27% zinc across 41 ft. A second hole is reported to have cut 95 ft with an average grade of 6.67% zinc.

Drilling of these conductors by Zenmac is scheduled for this summer.

“We hold high hopes for this Tuuri property for both base and precious metals,” Mr Pearson, who is a professional geologist, told the meeting.

There are 3,927,895 shares of Zenmac issued and listed on the Alberta Stock Exchange. Plans are to get the shares listed in Toronto as well, the meeting was told.

Most of the issued shares are held within the Sheridan group, with 426,556 held by Mr Sheridan himself. Other large holdings include Anyox Metals with 549,800 shares, Cons. Maybrun Mines with 424,300 shares, Madeleine Mines with 313,000 shares and Boston Bay Mines with 39,000 shares.