Deka nears production for Minnova, Syngold

A production decision is still some time away for the Deka (Donalda mine) prospect in northwestern Quebec, but Syngold Exploration President Barry Simmons is confident the project will be developed.

According to the junior-mining company president, who was speaking at a Syngold information meeting in Toronto, preliminary estimates indicate reserves of 804,000 tons ore grading 0.25 oz gold per ton. Taking into account a dilution factor of 20% and a gold recovery rate of 90%, the company anticipates an operating cost of $286(C) per oz based on a gold price of $450(US) per oz. The mine is expected to have a daily production capacity of 500 tons ore.

Syngold, with a 35% interest, and partner Minnova Inc., with a 65% interest, foresee a mine life of 5 1/2 years. A feasibility study for the property, located near Rouyn- Noranda, is planned for 1988. Drilling on the property in 1986 led to discovery of an extension of the former-producing Donalda No 1 vein. A second mineralized vein was previously identified on the property.

Debt-free Syngold, which has issued about 8.4 million common shares and 94,088 Class A shares, has a working capital of $850,000. Based in Toronto, the company recently opened an exploration office in Chibougamau, Que. Exploration funds totalling $3.2 million have been budgeted for this year, and in 1988 the company expects to spend $7.5 million exploring its properties. Encouraging intersections

At the Owl Creek West prospect at Timmins, Ont., Syngold and Kidd Creek Mines report intersecting gold mineralization in nine of 10 holes drilled this year. The best intersections were 0.35 oz over 32.7 ft in Hole 48 and 0.3 oz over 16.4 ft in Hole 51.

The gold zone on the Owl Creek property has a minimum strike length of 500 ft and extends from a vertical depth of 500 ft to at least 1,700 ft, Syngold reports. Several additional exploration targets outside the main gold zone remain to be fully evaluated, the company reports, including near-surface mineralization intersected in Hole 55 which assayed 0.16 oz over 19.7 ft.

In other news, Syngold has acquired the right to earn a 100% interest in the 14-claim Lac David property located in Scott Twp, about 8 miles southwest of Chibougamau. The company reports this property hosts the high grade Ramsay gold prospect as well as a second gold zone situated 200 ft to the southwest.

Systematic channel sampling of the Ramsay prospect averaged 0.27 oz over 3.8 ft for a strike length of 95 ft, the company reports. The southern zone sampling yielded 0.14 oz over 2.8 ft for a 70-ft strike length. The company plans a $500,000 drilling program on the property during the next nine months.

Syngold currently has interests in 11 properties, including six in the Chibougamau area.