San Paulo optioned the former producing Leitch mine property from Teck in 1987. San Paulo has spent $2.4 million on exploration out of a total of $3 million required to earn a 50% interest.
In the Mishibishu Lake area west of Wawa, Ont., San Paulo’s property has been returned to the company by Noranda (TSE). Noranda spent $700,000 on exploration which failed to yield results of any significance. San Paulo says another mining company has shown an interest in the claims. At the Gaffney project near Dryden, Ont., drilling by Teck has outlined modest reserve s of 300,000 tons grading 0.15 oz gold per ton to a depth of 775 ft.
As a result of the company’s poor exploration results combined with weakness in the junior exploration market, San Paulo’s low share price has precluded the completion of a financing. “This decline (in the share price) has made funding virtually impossible and brought our exploration programs to a standstill,” Walker said in a report to shareholders. At the end of the company’s fiscal year, June 30, San Paulo had cash of $5,217.
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