Atlantic Report Midas invades Nova Scotia

A relative newcomer to Nova Scotia gold action is Midas Minerals. President Karl Skobe has said that although the company is based in Toronto, its largest investor base is in the Sudbury area of Ontario where Midas has platinum and gold properties. Midas has filed a preliminary prospectus with the Toronto Stock Exchange and was recently notified that conditional listing approval has been granted.

Midas has acquired a gold property in Nova Scotia on the Caribou anticlinal structure, northeast of the Caribou mine now being investigated underground by Seabright Explorations. Midas has also acquired an 80-claim gold property in the Kemptville area of Yarmouth Cty. near some former gold producers and Rio Algom’s tin mine.

Each of 10 companies at a recent show-and-tell in Halifax is vying for a share of the cash they hope will find its way back into investment in East Coast mineral exploration after the recent takeover of Seabright Resources by Australian mining giant Western Mining.

Executives of the gold mining and exploration companies working in Nova Scotia and New Brunswick recently took the opportunity to promote their activities before more than 100 members of the Halifax brokerage community and others interested in the Maritime mining industry. The “investor relations meeting,” organized by Resource Communications of Toronto, was similar to one held last summer in Toronto attended by about 140 brokers and analysts.

William Young, president of Northumberland Mines, says his company is engaged in two major underground exploration programs in Nova Scotia costing $2.6 million.

At Cochrane Hill, a decline with a 15% grade will be driven for a distance of 1,000 ft to gain access to the mineralized zone at different intervals along strike. Gold recovery will be done on-site using a combination of jigs and flotation cells.

At Goldenville, underground access will be provided by refurbishing the main shaft of the former mine. After a headframe is completed and the workings dewatered, a 5,000-ton bulk sample will be taken from several of the 50 or so stratiform gold-bearing vein structures identified from a $2-million drilling program last year. The Goldenville district was the largest gold producer in Nova Scotia, yielding some 210,000 oz.

Although its Nova Scotia projects are promising, Northumberland’s main focus is on the Murray Brook gold/silver property in New Brunswick, scheduled for production this year. Most of the $5.5 million needed has been raised and negotiations are under way for the last $2 million. The deposit is reported to contain 1.7 million tons of gossan grading 0.0371 oz gold and 1.49 oz silver per ton.

Craig Miller, president of Scotia Prime Resources of Halifax, announced that a proposal by his company to amalgamate with its parent, Petroco of Texas, has been accepted by Petroco’s board. Preparations to obtain necessary approvals have begun.

Scotia Prime has proposed a share consolidation on the basis of one Scotia Prime share for four Petroco shares, resulting in a capitalization of about 2.11 million shares for the amalgamated company which will do business under the Scotia Prime name.

Scotia Prime’s 1987 exploration program met all the company’s objectives, said Miller. On the Lower Seal Harbour property, where 400,000 tons were mined between 1936 and 1941, the gold- bearing mine structure was traced by drilling from the 500-ft level to the 1,000-ft level, where it is still open.

“Gold is widely distributed within this broad, extensively veined structure,” says Miller. At the Ecum Secum gold property, drilling has encountered at least three gold-bearing structures with good widths that come to surface.

M. J. Riddell, president of Coxheath Gold Holdings, says more than two miles of undergound exploration access have been completed on three levels and 15,000 tonnes of potential ore have been brought to surface for testing at the Tangier gold property in Nova Scotia.

A bulk-sampling concentrating plant with a 30-ton-per-day capacity has been installed. Its capacity will soon be increased to 250 tons per day. A production decision was announced at the company’s annual meeting. The company has spent more than $9 million at Tangier since April, 1986.

Torene Gold Exploration has been involved in a pure water spring project in Cape Breton — reflected in its pending corporate name change to Aquagold Resources — and recently acquired several holdings in industrial minerals, mainly limestone and dolomite deposits. Torene has also been playing the Nevada gold game with Exxeter Resources of Montreal, which holds options on the chin-erq claims, the Blackrock Lode property and the Justice Mine property. An underground exploration program is being considered for Torene’s Harrigan Cove gold property in Nova Scotia, says President W. A. MacPherson.

D. E. Smith, president of Acadia Mineral Ventures, says his company is involved in 12 projects in the Maritimes and Ontario. Most advanced is the Mooseland project in Nova Scotia, where drilling has defined 675,000 tons grading 0.244 oz gold per ton in the West zone, with potential for much more. Better widths and grades have been obtained in the East zone, the faulted-off extension of the West zone, and ore reserve calculations based on 41 holes will be available in March. Hecla Mining has an option on the Mooseland property, which it must exercise by the end of February. If it takes Mooseland into production, Hecla can acquire a 60% interest in the property.

Acadia also has several projects on the go in New Brunswick, including the Elmtree and California Lake joint ventures managed by Lacana Mining.

At Elmtree, 500,000 tons grading 0.15 oz gold have been outlined. At California Lake, a gold- silver zone up to 100 ft wide has been traced for a strike length of 1,200 ft. Assays of more than 20 oz silver have been obtained there.

President Bernie Gallant of Pan East Resources says his company is involved in three Nova Scotia gold properties at the Fifteen Mile Stream, Mount Uniacke and Killag gold districts — all former gold producers.

At Fifteen Mile Stream, Pan East and its partners, Greenstrike Gold and Petromet Resources, have completed a 54-drill hole program in an area where 600,000 tons grading 0.24 oz gold per ton had already been outlined. Commercial grades and widths were also encountered in the Hudson shaft area, about one kilometre west.

Petromet can earn a 50% interest in the three properties by spending $5 million on exploration and raising 100% of the project financing necessary to bring one of the properties into production. In January, Petromet granted Gunnar Gold an option to earn a 25% interest in the Pan East properties by spending $5 million before June 30, 1989.

Gunnar Vice-president Ray Gilbert said a $2-million, 30,000-ft drilling program is now under way at Fifteen Mile Stream, with four drills on site. The objective of the drilling is to verify the existence of two million tons of ore grading between 0.2 and 0.4 oz gold per ton.

Gunnar also has extensive claim holdings in Ontario, Quebec, Saskatchewan, the Yukon and the Northwest Territories. In the past three months, Gunnar completed financing arrangements for more than $5.5 million in flow-through financings, of which $2 million will be spent on a 30,000-ft drill program at Fifteen Mile Stream.

With further expenditures, Gunnar can acquire a 37.5% interest in the Pan East properties, Gilbert said. Gunnar also announced its participation with a sister company, Mill City Gold, in a $500,000 drilling project on the Walton, N.S., base metal/silver deposit under an agreement with Dynamic Consolidated Resources by which Gunnar can earn a 25% interest in the 190-claim property. The Walton mine produced more than five million ounces of silver as a byproduct from the Pb-Zn ores.

NovaGold Resources holds an undivided 100% interest covering 102,000 acres of eastern Nova Scotia. Its cornerstone property in Nova Scotia consists of eight claims adjacent to Pan East’s property at Fifteen Mile Stream. NovaGold has drilled
97 holes totalling 40,000 ft there. Visible gold was encountered in about 70% of the holes. Preliminary reserves have been calculated at 277,000 tons grading 0.25 oz gold for the Plenty zone, which comes to surface. A bulk sample of 20,000 tons is now being extracted from this zone for processing at the Gays River mill in the next few weeks. Two thousand tons have been stockpiled at the mill.

At NovaGold’s Lake Charlotte property, also in Nova Scotia, 17 holes totalling 8,400 ft were drilled; visible gold was encountered in three. A 10-hole drill program will begin shortly on the Miller Lake property, where a small amount of gold was produced in the past. NovaGold recently announced its intention to offer to acquire all the outstanding common shares of Northumberland Mines on the basis of one NovaGold share — now trading in the $5 range — for 5 1/2 Northumberland shares, now in the 80 cents range.

Over the past six months, NovaGold has also acquired four properties in Nevada: the Sawtooth, Red Butte, Austen Peak and Horse Thief Spring properties. NovaGold has also acquired patented and unpatented mining claims in the Steeple Rock mining district of New Mexico.