Atlantic Report Cape Breton Highlands get going over

Despite a dramatic drop in activity in the junior resource sector in Nova Scotia since the heyday of flow-through shares, exploration is continuing, mostly by majors and the few juniors which have managed to secure financing.

Word has it that Inco (TSE), operator of the Scominex joint venture, has made some significant new gold discoveries in the Cape Breton Highlands. Scominex, originally a partnership including the provincial Crown corporation, Nova Scotia Resources (NSR) (25.8%), and Husky Oil, began exploring the Cape Breton Highlands in 1987.

In its 1989 annual report, NSR said that widely scattered gold mineralization of up to 97 grams per tonne in quartz veins had been found within the George River Group of metasedimentary rocks and associated intrusions. Also, a large zone of pyrophylitic alteration with gold values of up to 1.8 grams has been discovered. In total, 34 new gold showings have been identified from work to date.

The Scominex discovery is within an area anomalous in gold, as defined by a geochemistry survey jointly funded by the federal and provincial governments. When the results of the survey were released last November, there was a staking rush in which about 800 claims were staked in two days. The survey covered the northern Nova Scotia mainland outside of the Meguma region, and all of Cape Breton Island.

Other active participants in the Cape Breton Highlands, although in different geology from the Inco discoveries, include Noranda (TSE) and Seabright Explorations (TSE) of Lower Sackville, N.S.

Tri-Ex, a private company, acquired a number of claims in the Cape Breton Highlands over the last three years with the intention of evaluating them for base and precious metal potential. This strategy has worked well, according to Alex Thompson, one of the principals of Tri-Ex, as the company now has two of its Highland properties under option.

In the Cape Breton Highlands east of Cheticamp, Inverness Cty., a 9-claim licence was optioned to Scotia Prime Minerals (ASE) of Halifax, which carried out geophysical and geochemical surveys in 1988, which had encouraging results for nickel and silver. Scotia Prime has recommended additional geophysics and diamond drilling on the prospect.

Elsewhere in the Cape Breton Highlands, Tri-Ex dealt a 95-claim group covering the Rocky Brook polymetallic prospect to Seabright Exploration (TSE) last summer. Initial prospecting on behalf of Tri-Ex has confirmed copper-zinc- silver values that had been indicated by drilling in the 1950s at what is called the Rocky Brook showing. On the west side of the claim group, Tri-Ex encountered highly anomalous copper-silver- gold values near a lead showing that B.P. Minerals had discovered in 1983-84.

“Aggressive staking by Noranda and others in this area could lead to a thorough evaluation of this promising and interesting area,” Thompson says.

Noranda holds a large block of claims adjacent to the Rocky Brook property which include the Jim Campbells Barren showing. In 1968, Cominco reportedly drilled the showing and intersected six metres of mineralized strata with gold values ranging from 1.37 grams to 9.60 grams, all over 2-metre widths. Juniors with a ground position in this area of Cape Breton 10 miles east of Cheticamp include AquaGold Resources (ASE), Scotia Prime Minerals, Outland Resources and Gold Brook Developments.

Within the Meguma Group, exploration is almost at a standstill except for two projects at opposite ends of the belt which have been in progress since last fall. In the east, the Goldboro region of Guysborough Cty. continues to be a hotbed of activity as Exploration Orex (ME), which recently raised $6 million in Quebec, has commenced an underground diamond drilling program to upgrade reserves. In addition, Orex is preparing for bulk testing to verify grades and improve the expanding ore reserve picture. Orex is optimistic about the large tonnage, low-grade potential of the property and has indicated that the property has potential for more than 20 million tons of low-grade material.

Elsewhere in the region, Onitap Resources (TSE), from which Orex obtained the Goldboro property, is using some of its recent $500,000 payment from Orex to drill favorable ground on the same structure to the east. Other juniors in the region with a solid ground position include Lotus Resources (ASE), ScotiaPrime Minerals, Seabright Explorations, Murgor Resources (VSE) and Ressources Orient (ME).

At the western end of the Meguma, Guinness Gold Resources (ASE) has been drilling a polymetallic prospect in the vicinity of the East Kemptville tin deposit of Yarmouth Cty. Control of Guinness (60%) was acquired last fall from Acadia Mineral Ventures (TSE) for a reported $636,000 by a group headed by William Burton, formerly the president of Atlantic Goldfields. Guinness then took a run at getting control of cash-rich Acadia, but the attempt was thwarted when Richmond Gulf (COATS) acquired 14.2% of Acadia, making any takeover attempt costly. Acadia’s president, Donald Smith of Toronto, had been a director of Richmond Gulf, which was run by Bruce Orsini. Acadia’s annual meeting has been rescheduled from last October to Jan. 29, at the request of the Ontario Securities Commission, so that a new information circular could be prepared to elaborate on some of the recent changes to Acadia’s board of directors.

As part of the deal, Acadia has retained the right to back in for a 40% interest in any of the properties it transferred to Guinness, based on a prescribed formula. If Acadia elects not to exercise its back-in right, its interest in the properties would be converted to a 10% net profits interest. The well-known and highly successful prospecting group headed by Avard Hudgins also went with Guinness.

Lixor (ME) is a new player “down east.” The Quebec-based company holds options to acquire interests from Aurtec Inc. in the Elmtree-Walker and Elmtree-Prairie properties 25 km north of Bathurst, N.B., in the Cranberry Head property in Nova Scotia, and in the Courville property, 35 km northeast of Val d’Or, Que. Lixor already holds 16 claims in the St-Andre d’Argenteuil area, 50 km west of Montreal. Lixor drilled seven holes in the Elmtree-Prairi e group last fall, two of which returned high-grade intersections, according to President Mike Curtis. Hole 89-2-15 carried 15.9% copper, 9.95% zinc and 1,030 grams silver over a 1-metre true width; hole 89-3-6 had 28% copper, 4.02% zinc and 410 grams silver over a 1-metre true width. The Cranberry Head gold property, five miles from Yarmouth, is near the contact between the Goldenville and Halifax formations of the Meguma group. The property is a group of 50 contiguous claims covering 800 hectares. Lixor signed an agreement with Aurtec last August to acquire a 50% interest in the Cranberry Head property. Aurtec had drilled the property in 1988, intersecting the gold-bearing Cream Pot fissure vein. The most southerly intersection near the ocean returned 39.4 grams gold over a length of 18 cm. The gold content of beach sand concentrates in the area is 9.3 grams, Curtis says. Beach sand sampling returned gold mineralization over a length of one- half mile.