One of North America’s most influential financial publications has taken Borealis Exploration to task for spending flow-through dollars on its Arctic iron ore and gold projects without yet making any firm production decisions.
In a lengthy and unflattering article published Feb. 15, Barrons of New York looks at the Calgary company’s exploration record in the Northwest Territories where the breakeven point for profitable mines are at least 35% higher than those further south.
Without any production to support it, the Borealis issue was still trading at $13.25, down $1.63 on a volume of 10,400. Borealis tends to trade higher than other exploration companies because the shares are tightly held.
Investors were slow to warm to another Northwest Territories project involving Octan Resources of Edmonton. While Octan has agreed to acquire 100% of the El Bonanza silver claims at Dowdell Point at Great Bear Lake, the issue was down 8 cents to close at $1.31.
According to an independent report, a two stage exploration project is warranted, Octan says.
The Flag Resources issue remained steady on news that Hecla Mining can earn a 50% interest in the company’s Wolf Lake gold prospects near Sudbury, Ont. It closed at 26 cents on a volume of 16,000.
Hecla can earn its interest by spending $1.4 million on the 183- claim property in three separate installments by September 1989. Under the agreement, Flag can earn royalties on production ranging from 10% to 49%.
Calgary-based Rainbow Exploration is embarking on a joint venture agreement with Mill City Gold on the old Bob Tough gold-property 75 km southwest of Sudbury.
Under the agreement, Mill City must spend $500,000 over three years to earn a 50% interest. Rainbow has also bought a 100% interest in the Beemer-English gold property 42 km south of Timmins, Ont.
By spending $300,000, American Barrick Resources is currently earning a 60% interest. According to Rainbow, HSK Minerals of Toronto pulled a 17-ft intersection grading 0.156 oz gold per ton on an adjacent property.
As a result, the Rainbow issue was up 4 cents on 9,000 shares to close at 21 cents .
A new Alberta issue called Montego Resources says it will change its name to Canadian Majestic Resources next February. With a cash position of $630,000, the Calgary company is involved in oil and gas production.
Trading on 6,000 shares, it remained steady to close at 25 cents .
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