Audrey’s Mobrun lens guarantees new mill

Partners Audrey Resources (TSE) and Minnova Inc. (TSE) have turned up yet another important discovery at the Mobrun polymetallic mine near Rouyn-Noranda, Que., The Northern Miner has learned.

Operator Audrey Resources (70%) says a massive sulphide lens located 240 m south-east of the existing mine workings was indicated by PEM geophysical surveys in three drill holes.

“Geophysical interpretation of the PEM anomaly shows that the new lens could be 1,000 ft long and 1,000 ft deep,” said Audrey President Guy Hebert.

According to Hebert, the new lens was discovered on the Dufresnoy claims which were part of the Mobrun leases before they were renamed for flow-through financing purposes.

Drill hole 88-42 intersected 120 ft of sulphides in the new 1,100 lens. From a depth 1,747 ft to 1,806 ft, 59 ft of semi-massive sulphides was intersected, while 61 ft of massive sulphides was encountered between 1,806 ft and 1,867 ft, Hebert says.

The results are as follows:

True Grades Length Width Copper Zinc Gold Silver

ft ft ozoz 59t 42 0.72% 8.20% 0.025 1.51 61 44 1.41% 4.52% 0.039 2.14 120 86 1.07% 6.33% 0.032 1.83

The latest discovery comes just three months after Audrey encountered three lenses (850, 870 and 930) inside the boundary separating the Mobrun and Dufresnoy claims. They now host 251,451 tons grading 2.02% copper, 4.27% zinc, 1.95 oz silver and 0.30 oz gold per ton.

As reported (N.M., Feb 1/88), Audrey recently set aside $650,000 for a surface drill program designed to increase its Mobrun tonnage. But after placing the Dufresnoy reserves in the proven, probable category two drill rigs are currently testing the 1,100 lens about 40 m to 50 m above the new intersections.

Combined with Mobrun reserves which add up to 1,375,000 tons grading 0.71% copper, 2.56% zinc, 0.91 oz silver and 0.075 oz gold, the new discoveries are sufficient to justify construction of a $17-million mill facility, Hebert says.

Audrey is currently processing Mobrun ore through the nearby Norbec mill, but since Minnova’s new Ansil copper mine will be up and running next year, the Rouyn- Noranda company must find an alternative.

After considering his options, Hebert says he can reduce the current cost of production ($40 per ton) by $6.26 by building a milling facility at the Mobrun mine site.

With construction scheduled to begin in May, Hebert says he will raise the $17 million needed to build a 1,000-tpd facility through a $6 common share private placement with a major mining company, a gold loan and a $2-million grant from the Quebec government.

Since the Audrey issue is currently trading on the Toronto Stock Exchange at $3.25 in a 52-week range of $5.75 and $2.15, financing through a convertible debenture appears to be out of the question.

“With eight million shares outstanding, we would experience too much dilution,” Hebert said. Minnova retains a 30% interest.

At current metal prices, payback period for the mill and developments costs of the new 850, 870, and 930 lenses is estimated at less than a year, Hebert says.

Audrey will access the new lenses via a 860-ft (part 2-compartment, part 4-compartment) shaft.