Exploration ’88 RIO ALGOM

Rio Algom, operating through its wholly-owned subsidiary Rio Algom Exploration, plans to increase its Canadian exploration activities in 1988, especially in its search for gold and massive sulphide base metal deposits. Total exploration expenditures for 1988 are budgeted at $6.5 million, of which $2 million is targeted for U.S. projects and $1 million for Chilean plays. Total expenditures in 1987 were about $4 million.

In 1987, Rio Algom, in a 50/50 joint venture with Calgary-based Varna Gold (formerly Marker Resources), completed a preliminary geophysical and drilling program on a gold and base metal prospect at Huxter Pond in central Newfoundland. Also in Newfoundland, under an option agreement with Esso Minerals, drilling started on two claim groups in the Tally Pond area, near the Noranda/bp discovery.

Aided by funding supplied by flow- through shares, exploration activity for gold has been intense over the past several years. As a result, competition and acquisition costs for gold properties have increased significantly. In 1988, Rio will be looking at a number of opportunities to participate in gold properties that are in an advanced stage of exploration or development and that have a large tonnage potential.

Canadian operations are directed from the Toronto head office, although the company has an exploration office in Fredericton, N.B. Rio participates in exploration in British Columbia and the Yukon through its interest in Lornex Mining.

In the U.S., Rio has consolidated its exploration effort into a single office in Reno, Nev. Exploration will focus on gold in Nevada and the Great Basin. One property has been defined as an attractive drill prospect for 1988.

Rio has maintained a presence in Chile since 1980, primarily in connection with its Cerro Colorado copper project. In 1988, the company intends to increase its exploration effort, particularly for gold, in this mineral-rich country.