High grade Orex results dispute original drill assays

Orex assayed six sections of core from a total of 108 holes which were completed by Onitap Resources (TSE) on the Goldboro property in Guysborough Cty., N.S. Orex holds an option to purchase the Goldboro property from Onitap for $8 million.

Each sample of core was tested at the Centre de Recherches Minerales du Quebec (CRM), a metallurgical testing laboratory. Following milling and cyanidation, CRM obtained assays of 0.531 oz gold per ton across 367 ft in hole BR-60, 408 ft grading 0.819 oz in hole BR-62 and 316 ft assaying 0.367 oz in hole BR-48. Another hole, BR- 61, assayed 0.124 oz in a 236-ft section of core.

Not only are the results the richest ever encountered in Nova Scotia, a province with a poor record for gold mining, but represent an enormous discrepancy over those assays obtained by Onitap. For example, a review by The Northern Miner of data from the drill log for hole BR-62 revealed o nly a few intersections of any significance — none which would support the grades and widths indicated by Orex.

From 60 ft to 100 ft, a 3-ft section assayed 0.24 oz gold per ton. Wide sections of arenite, a type of sandstone, are barren of gold. Other low grading assays of less than 0.1 oz were encountered in small quartz veins crosscutting sections of drill core. A lower shale unit carried marginal gold values ranging up to 0.049 oz Again, all the values are across narrow widths.

From 150 ft to 177 ft, several 5-ft sections assayed 0.005, 0.024, 0.02 and 0.026 oz gold. A 2-ft section from 199 ft to 201 ft assayed 0.16 oz. In total, 50 sections of core were sent out for assay by Onitap — assays which showed this particular hole to be barren of any economic gold values over mineable widths.

Michel Roy, vice president of exploration Orex, defends his company’s results. “Onitap’s numbers were not reality. We took the entire core and passed it through the test mill (at CRM). The bigger the sample the more accurate you get,” Roy explained. Before the assaying was performed, the mill was stripped and cleaned, Roy says, thereby eliminating the possibility of contamination.

Gold mineralization is associated with a series of stacked anticlinal folds. The best concentrations of gold are found within the apex of these folds.

Based on a reassessment of Onitap’s results, Orex calculates a reserve of 5.5 million tons grading 0.199 oz gold per ton for the property — a figure that Roy says will increase significantly. Onitap estimated reserves of 1.35 million tons grading 0.2 oz.

When queried by The Northern Miner about his method of calculating reserves, Roy agreed that many in the mining industry would question his technique. “Our method (of estimating reserves) would not be accepted by everyone, but it works here,” he explained. “The thicker the apex, the more tons. I took belts already identified and only drilled to 800 ft,” he added.

As a result of a nugget effect, Roy says that a very large bulk sample would be required, up to 500,000 tons, to properly assess the grade. Since such a program would be economically prohibitive, Orex is planning to build a mill on site beginning by November with the intent of placing the property in production sometime in 1990. A bulk sampling program of 5,000 tons to 10,000 tons — normal industry practice for underground projects of this size — might fail to correctly determine the actual grade of the deposit Roy told The Northern Miner.

Although there is widespread skepticism concerning the high assay results, market activity in Orex has been racing at a fever pitch. During the first three days of trading following the company’s announcement, more than three million shares exchanged hands. The company’s share price whip- sawed wildly from a new high of $3.65 on July 18 to $2.25 a day later. The issue recovered to $3.15 at presstime. Orex was trading around a $1.40 prior to the announcement.

Additional samples have been sent to Lakefield Research, Roy says. Results from this work are expected shortly.

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