Newfoundland’s biggest gold play Noront teams up with Noranda

With three diamond drills starting up this week, a major grass roots exploration program quietly under way over the past two years by Noranda Exploration on a huge spread of almost virgin ground in north-central Newfoundland is entering a highly interesting stage. It’s the biggest single gold play ever seen on that island province.

Known as the Grubline Joint Venture, Noranda’s exploration arm has chosen junior Toronto- based Noront Resources (VSE) as its full partner. And it’s quite a deal, for it could see that little company earning a 100% interest in close to 8,000 claims by spending $30 million over the next three years.

Significantly Noranda, which will continue as the operator, retains the right to buy back a 51% interest by providing senior financing and all production funding on any projects within the large defined area of mutual interest.

Noranda has already received 375,000 treasury shares of Noront at a deemed price of $2.65 per share as compensation for the expenditures it has already made. It has also been granted options on additional treasury shares at the rate of 1,000,000 per year over the next five years, starting at $3.50 per share and escalating to $10.50. If all are exercised, it would give Noranda an eventual 50.1% direct interest in the Noront company.

“This is a mega project. We’re going for elephants here,” says V. Noble Harbinson, Noront’s executive vice-president and one of that company’s co-founders.

While there is no orebody as yet, The Northern Miner senses an air of high expectation based on the widespread gold findings already made. And the conditions are certainly right.

“This project’s size and scope is often hard to appreciate, but it will take time and patience to fully realize its indicated potential. The next 12 months, at least, should be an exciting time,” says Dan MacInnis, manager of Noranda Exploration’s very active Newfoundland Division. A veteran geologist, he has been with the Noranda organization for the past 15 years, the past 4 of which have been in Newfoundland.

Traversed by the Trans-Canada highway, the area itself is approximately 150 km long and up to 40 km wide on which Noranda has carried out extensive glacial till and lake bottom geochemical work between 1985-88. This has revealed abundant fine, delicate and fresh gold grains in the till almost throughout this entire area. These have been traced back to gold findings in place, the first of which was made early this year. It is these actual findings that Noranda has been staking.

Follow-up work, particularly the prospecting and trenching that has been carried out this past year, has located gold showings of both the lode and epithermal types. The lode showings are hosted by quartz veins similar to the recently discovered occurrences along the Baie Verte belt, and display similarities to the lode deposits found along structural breaks within the greenstone belts of Ontario and Quebec as well as those of the famed Mother Lode belt of California.

And the epithermal findings, particularly the Aztec showing, looks more like the Hope Brook mine deposit in southwestern Newfoundland. Too, project geologists cite certain similarities to the gold deposits within the Carlin belt of Nevada.

Five specific targets have already been identified and readied for diamond drilling at this time. These are all quite separate joint venture projects, trenched, and with good gold values in place. Further targets are expec ted to be outlined as the exploration programs continue. The drilling itself will continue through the winter.

Noront, which recently raised $900,000 in flow-though financing, has budgeted $500,000 for the current year’s drilling on the Newfoundland project just now starting. It is further committed to an expenditure of $2.5 million for next year’s big drilling program there, for which funding has already been firmly arranged.

Noront has also budgeted $400,000 for drilling on its Mishibishu gold properties in Ontario, now under way under the wing of Noranda’s Hemlo Gold Inc. (TSE) which company has been participating in Noront’s financing.