Exploration ’88 ROYEX

The Royex group, which includes International Corona Resources, Lacana Mining and Mascot Gold Mines, expects to intensify its search for exploration and acquisition opportunities in 1988 under newly- appointed senior vice-president, exploration, Christopher Jennings. Already, flow-through funding totalling $20 million has been arranged, $5 million each for Royex Gold Mining, International Corona, Lacana and Mascot Gold. Current exploration includes projects in Newfoundland, Ontario, Saskatchewan and British Columbia. Dolphin Explorations, controlled by Corona, is carrying out an underground exploration program on the Cape Ray gold project in southwest Newfoundland. In Ontario, Corona is involved in “Operation Wawa,” which has been investigating numerous gold showings on ground owned by Algoma Central Railway, especially in the vicinity of the former Murphy Lake gold mine. Lacana has a 17.1% interest in the Musselwhite project in the Snoppy Lake/East Bay area, 80 miles north of Pickle Lake. A $14-million underground exploration program will be started in 1988.

In Saskatchewan, Royex is the operator of the Jolu project and has a 30% interest. (Mahogany Minerals Resources holds the remaining 70%.) After a successful underground exploration program in 1987, the company elected to arrange production financing for the property and is moving ahead with plans for a 400-tonne-per-day mill.

Mascot Gold Mines continues with exploration on and around its Nickel Plate gold mine, brought into production last year. An underground program has been started beyond the limits of one of the operation’s open pits, and work will continue on the adjoining properties of Golden North Resource Corp. Other British Columbia properties that will receive attention are the former gold-producing Bralorne and Pioneer mines, 100 miles north of Vancouver, and the Giant Nickel platinum/cobalt/chrome prospect, near Hope. Underground exploration is also in progress on the Sulphurets project, a high-grade gold/ silver property operated and 60% owned by Newhawk Gold Mines (Lacana 43%). Commercial production is expected in 1989.

Lacana plans to be more active in the U.S. in 1988, working out of an office in Reno, Nev. The company announced last December it was going ahead with production on its wholly- owned Santa Fe gold property, 30 miles east of Hawthorne, Nev. Production is expected to begin in September, 1988, and the mine will produce 50,000 oz of gold and 150,000 oz of silver annually over five years.

Through Lacana, exploration will also be increased in Mexico, using the funds generated by the company’s 30% interest in the Torres gold- silver mining complex. Rather than receive some of the profits as dividends, Lacana will devote all its Mexico-generated earnings to further exploration in that country.

Precious metals in North America, capable of low-cost production, remain the primary focus of the Royex group’s exploration and acquisition efforts. Other opportunities, whether in other mineral resources or other parts of the world, will not be excluded if they meet the low-cost production criterion and are considered appropriate. With earnings from its Hemlo and Nickel Plate mines as well as its other operations, in addition to flow- through funding, the Royex group is expected to be much more aggressive than in past years.