LAC’s global ore search focusses on Chilean mine

When The Northern Miner tried to reach LAC’s chief geologist, Phil Walford, to discuss the company’s exploration activities he was down in Chile on a project.

Highlighting the past exploration season for LAC was the discovery of a significant new polymetallic deposit at the company’s Toqui zinc property, some 1,000 miles south of Santiago.

In July, LAC announced the first results from its exploration drilling which yielded a new discovery at Toqui. Mineralization having grades of 8-10% zinc in 30-ft thick lenses was encountered within 500 ft of surface, and about a half mile west of the existing mine workings.

The base metal sulphides also contain significant gold values, frequently exceeding 0.10 oz gold per ton, in the western part of the zone.

Definition drilling using three machines was scheduled for completion last month and a compilation of all results from the new deposit is under way.

LAC President Peter Allen added Chile to the company’s portfolio a few years ago. “It combines superlative geological potential, a mining infrastructure, skilled workers, and a strong economy,” he said.

International exploration projects have become virtually commonplace for most senior Canadian mining companies these days, and LAC is no excepti on. A host of other Canadian mining companies have also taken on big projects in Chile of late, and the list of firms currently active there reads like a “Who’s Who” of the Canadian mining industry.

Nearly one-quarter of LAC’s current exploration budget is being spent on Chilean projects. That’s roughly the same amount the company spends searching for new reserves around its Canadian gold mines.

The company also has a large land holding known as the Apolinario property in northern Chile. Exploration continues on that project, but no significant new discoveries have been reported to date.

In Canada, LAC continues to focus on exploration around its existing mines — Doyon, Bousquet, Francoeur, and Macassa — with Ontario and Quebec remaining the cornerstone of the company’s exploration effort. Out of a total 1989 exploration budget of $15 million, about a quarter of that is committed to finding new reserves at existing operations. During 1988, the company spent $28 million on exploration, but this year’s spending has been slower and safer.

The company has various grassroots programs in northern Ontario and Quebec, a number of which are joint ventures with junior companies.

For example, LAC can earn a 50% interest in a gold deposit being explored by Jonpol Explorations (TSE) and T&H Resources (TSE) in Garrison Twp., Ont. An underground exploration program is under way on that property where drill-indicated reserves total 1.31 million tons grading 0.23 oz gold. LAC is contributing $700,000 to the present program, as well as conducting a drill program on other claims nearby. If exploration is successful at Garrison Twp., the senior company will develop and operate the property as a joint venture partner.

Other companies working with LAC in the Garrison Twp., area are Perrex Resources (ASE) and Silverside Resources (TSE). Perrex has reported preliminary drill-indicated reserves of 600,000 tons grading 0.175 oz gold on its 106-claim property.

In the Hemlo camp, more claims have been added to LAC’s White River project, where a drilling program was completed in September. New claims were staked to cover deformation zones extending east of the Hemlo greenstone belt and north of the Hornepayne Highway.

The company’s exploration efforts in the U.S. are centred on a number of properties mostly in Nevada and New Mexico. On the Rosebud property in Nevada, LAC is participating in a joint venture with Equinox Resources (TSE). This summer, a 165-ft intersection grading 0.17 oz gold was pulled on the 10,000-acre Rosebud property. More drilling was planned to follow up the gold values.

Under another recent exploration agreement, signed with New York-based DRX Inc., LAC can earn a 51% interest in the latter company’s Midas property in the Carlin Trend. That deal calls for $2 million to be spent on exploration over a 4-year period. The property hosts at least one million tons of material grading 0.042 oz gold, and has potential for additional reserves to be outlined by exploration.

This fall, LAC teamed up with Pegasus Gold (TSE) on its Ortiz gold project in New Mexico where the latter company can earn a 50% interest by spending $27.5 million(US). The company plans to explore and develop that property by 1992. Pegasus is the operator of the project, 25 miles north of Albuquerque. The project comprises about 21,000 acres.

Becoming more active in Western Australia, LAC opened a new exploration office at Perth earlier this year. The company holds a 50% interest in the Glengarry gold property near Kalgoorlie, but no economic deposits have yet been found on that project.

Although it’s known mainly as a gold producer, with annual output of around 320,000 oz, nearly 25% of LAC’s operating income last year came from non-gold operations, including a limestone quarry near Toronto.

First-half earnings this year were $23.1 million or 25 cents per share, compared with $26.3 million or 29 cents per share a year earlier. The company’s shares have traded in a 12-month range of $10.62-13.87 with the recent price at around $11.13. There are nearly 100 million shares of LAC issued and outstanding.

The company is in the process of acquiring a 65% control block of Bond International Gold (TSE), which has extensive exploration holdings worldwide, in addition to its five operating gold mines in North and South America.

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