Imperial Metals active on many exploration fronts

Since spinning off its gold assets into Cathedral Gold, a Toronto-listed 22%-owned subsidiary, Imperial Metals has had exciting exploration results.

Highlighted in its 9-month interim report is the Sterling heap leach gold mine near Beatty, Nev., which produced 8,090 oz of gold in 1987 and is expected to produce 12,000 oz in 1988. Cathedral plans to double this to 24,000 oz by year- end. A second 1,700-ft access decline will be developed during the year and a major drilling program is aiming to triple the reserve base of 260,000 tons grading 0.26 oz gold per ton.

A new zone, the Burro North was discovered in the last quarter with proven reserves of 28,000 tons of 0.25 oz open pitable ore. Cathedral has a 52% interest in the mine.

Another Cathedral drilling success is on the Porcher Island property 35 miles southwest of Prince Rupert, B.C. A 27-hole drill program confirmed the presence of several new zones away from previously established ore-bearing quartz veins. The new zones range up to 50 ft in thickness and offer potential for major tonnages, the company says.

Results from the first 10 holes include a 33.6-ft interception grading 0.287 oz; a 77-ft interception grading 0.205 oz and 33.3 ft grading 0.119 oz. Some smaller widths had high grades, including 1.5 ft grading 1.453 oz and 6 ft averaging 0.418 oz. The company plans to spend up to $1.2 million on the project in 1988.

In total Cathedral has earmarked $2.1 million for its exploration budget in 1988, Imperial President Pierre Lebel reports.

Turning to base metals, Imperial has two projects at advanced stages of exploration located in Wales and California.

The Blue Moon project in California was acquired by Imperial through its subsidiary Colony Pacific Explorations. Imperial has an 18% equity interest in Colony which recently repurchased Westmin’s share of the project. Westmin now has a 26% interest in Colony and retains a 10% net profits interest in the property. A $1.1-million program is planned to complete exploration and final feasibility work leading to shaft sinking. Probable and inferred reserves total 4.l million tons grading 0.061 oz gold per ton, 2.53 oz silver, 1.18% copper, 0.44% lead and 9.57% zinc.

Another promising project is at Parys Mountain in North Wales, owned by Imperial’s wholly-owned subsidiary Anglesey Mining. Imperial expects to reduce its equity position in Anglesey to 50% following completion of a 5 million pounds sterling financing currently being arranged on European equity markets to cover phase one costs. Mineable reserves are 5.2 million tons of 1.46% copper, 3.03% lead, 6.04% zinc, 2.02 oz silver and 0.013 oz gold.

In the United States two uranium prospects are proceeding on schedule. The Crow Butte uranium project in Nebraska, in which Imperial has an 18.7% beneficial interest, will be on stream late 1989. Initial production is expected to be 800,000 lb per year. Permitting procedures and pilot plant operation are proceeding and recent drilling has shown potential to increase reserves up from the 44 million lb already established on the primary Crow Butte trend.

At the neighboring Big Red project, drilling has increased reserves to 18 million lb. With virtually identical geology to Crow Butte, this project has the capacity for further expansion of both production rate and mine life for the Nebraska operations.

Imperial Metals reported net profit of $766,000 on revenues of $2,727,000 for the nine months ended Dec 31, compared to a loss of $54,000 on revenues of $1,973,000 the year before.

The final quarter’s results will be boosted by sale of 169,000 shares in Western Goldfields to Australian- based Western Mining Corp. in March. The sale, which realized gross $1.9 million and a profit before tax of $809,000, was in response to Western Mines’ recent $100-million takeover of Western Goldfields.