Aur, Louvem drop as latest drilling returns low values

Pressure to satisfy the market’s desire to know how drilling is progressing at the Louvicourt Twp. massive sulphide project is taking its toll on the share prices of Aur Resources (TSE) and Societe Miniere Louvem (TSE). Even before operator Aur had announced that mineralization intersected in two new drill holes was uneconomic, the share prices of both companies fell sharply as nervous investors sold their shares.

Designed to test for the down- plunge extension of the Louvicourt copper-zinc-gold massive sulphide deposit, east of Val d’Or, Que., holes 69A and 78G yielded significant sulphide mineralization. But they included no copper, zinc, or gold mineralization of any economic significance, Aur said.

While they suggest that a dome- shaped structure may be controlling the distribution of mineralization in the area where the two holes were drilled, many investors elected not to wait for an interpretation.

Before results were released May 1, Richardson Greenshields of Canada and Walwyn Stodgell Cochrane Murray inadvertantly halted trading of Aur, Louvem and St. Genevieve Resources (TSE) by unloading about 20,000 Aur shares each.

The Aur and Louvem issues immediately fell by 80 cents and $1.05 respectively and both closed at $3.80. After a press release was issued and trading resumed, Louvem’s parent company St. Genevieve also gave up 25 cents to close at 94 cents.

The price declines were sparked by investors who became nervous when results weren’t released as expected on April 30, according to a Toronto analyst.

“That’s what happens when you are under pressure to satisfy the market’s desire to know what is going on,” said Aur President James Gill, who admits to being baffled by the latest results.

“Unfortunately, Aur has become a drill-hole play,” added Vice- President Howard Stockford who would have preferred to wait until more is known about the deposit before releasing the results. “It’s inevitable (in exploration) you are going to have a few bad holes,” he said.

The new holes 69A and 78H indicate that for the second time in succession Aur geologists have misinterpreted the plunge direction of the deposit. About eight weeks ago, Aur released a batch of four holes (77H, 78G, 74H and 79E) which ended up below the deposit at a depth of 2,600-3,100 ft. below surface.

Thinking that they might “pick it up” again between holes 74C and 69 to the east of the deposit, Aur geologists elected to drill in between those two holes. The best hole reported to date, 74 C yielded 334.8 ft. of grade 3.59% copper and 0.15% zinc at a depth of 2,160 ft.

Now they know the deposit doesn’t go through the gap between 74C and 69, Gill, Stockford and the Aur team are scratching their heads and attempting to come up with a new interpretation.

Hole 78H encountered disseminated to semi-massive pyrite over a core length of 117 ft. within the favorable horizon at a vertical depth of 2,600 ft., about 200 ft. above and 100 ft. west of 78G. Hole 69A intersected a narrow interval of the favorable horizon about 400 ft. below and 150 ft. west of hole 69.

According to Gill, two factors suggest that a dome-shaped structure may be controlling the distribution of mineralization on to the east of the main drilling area. One is the presence of a substantial increase in the thickness of the white fragment breccia unit in both holes.

The other is the intersection of this unit significantly further south than expected in Hole 78G. “There is something unusual happening but we don’t know if it’s a fault or a dome,” said Gill.

In a bid to find out, Aur is drilling a deep hole to a depth of 3,000 ft. below the level of 78 G.

Of the other two drills that are currently working on the property, one is filling in between previous holes to provide more confidence in previous reserve estimates. Previous estimates that the deposit contains 36 million tons of grade 3.11% copper and 1.34% zinc are unaffected by the latest results.

Another drill is testing the Aur horizon, which hosts the deposit, south of the former Louvem mine’s Zone 3 deposit.

“It could be another couple of months before we have something we can say with confidence about the plunge direction of the deposit,” said Gill. “As soon as we do, we will say something.”