Fort Knox play reminiscent of market activity in the ’80s

It was just like the good old days — back in the mid-1980s — when a successful run on the junior mining market could finance a new Porsche or pay down part of the mortgage.

Those who had seen their Fort Knox Gold Resources stock (TSE) jump to record highs on news of a nickel-copper discovery in the Shining Tree area west of Cobalt, Ont., were celebrating. Others, just getting in on the play, were scouting the room at Toronto’s Sheraton Centre, trying to gather information.

But no one attending a recent “discussion” on the Shining Tree area sponsored by Fort Knox and property neighbor Goldhunter Explorations (ASE) could explain why this particular exploration play has generated so much market attention over the past few weeks.

Since Fort Knox released nickel assays from three holes on its property in Fawcett Twp., including a 110.9-ft. intersection grading 1.03% nickel and 0.43% copper from a depth of about 200 ft., the stock has been rising steadily, with hardly a break in activity. By presstime, it had touched $1.30, a 350% gain over its Thanksgiving asking price. Likewise, Goldhunter, which quickly optioned 21 claims tying on to the west and northwest of the discovery area, has doubled to 29 cents since mid-October. “We were able to write the cheque faster than Fort Knox,” one insider explained. “It’s the only game in town,” is the pat explanation for the Fort Knox trading activity. Inco’s (TSE) 40% interest in the company also lends a degree of respectability to the stock.

But for geologist Doug Hunter and Fort Knox Exploration Vice-President Wayne Whymark, the Shining Tree project is a rare opportunity to follow up an intriguing discovery. In the last few weeks, the company has staked almost 200 claims for a total of 230. By next week they should be back in the bush with one rig and fresh financing to drill 10,000 ft., or about 12 holes on the nickel find.

Whymark says he will step back about 200 ft. with the fourth hole to try to hit the nickel-copper zone at depth. He believes the zone is probably vertical and possibly pipe-like, rather than tabular in its dimensions. But Whymark added that with only three holes worth of core, it is too early to get a firm geological handle on the area.

Whymark is bullish on the volcanogenic massive sulphide potential of the north grid, which, although only about a mile from the nickel discovery, lies in a completely separate geological environment.

Other players currently active in the Shining Tree area include Royal Oak Mines (TSE), which staked 123 claims along five miles of “favorable stratigraphy” and CopperQuest (CDN) which is investigating the potential for volcanogenic massive sulphides on its 26-claim property in Connaught Twp., Ont. Asarco Exploration of Canada, a unit of Asarco (NYSE), also holds ground in the area.