Barrick extends search for new mines

The game plan of American Barrick (TSE) from the beginning has been to use hard cash to buy partly developed mining properties and then take them into production.

Or, the Toronto-based gold producer has entered into joint venture arrangements where the operator needed a fresh infusion of cash. To date, grassroots exploration has not been Barrick’s style. While the company operates the Holt-McDermott mine in northeastern Ontario and the Mercur mine in Utah, the Goldstrike mine in Nevada is Barrick’s prize. A targeted gold production there of 920,000 oz. for 1992 will be exceeded in a big way if present production rates are maintained. Output for the first nine months totalled 838,711 oz.; over 12 months, that projects to 1.1 million oz.

Indicative of the direction in which Barrick is looking for new mines is the opening of offices in Mexico (in January) and Santiago, Chile (this autumn). Also announced was the closure of the Kirkland Lake, Ont., office in mid-1992. Exploration work in Ontario is now planned and monitored through the company’s Toronto office and the Holt-McDermott mine.

The mandate of the new offices in Latin America is to “source acquisition opportunities that will further increase Barrick’s gold reserve base and augment production,” says the company.

Barrick spent US$8.1 million on exploration in 1991 and projects US$7.4 million for the current year. These amounts include expenditures throughout all of the Americas.

In June, 1992, Barrick entered into an agreement with Hecla Mining (NYSE) regarding the latter’s Yellow Pine gold property 100 miles north-northeast of Boise, Idaho.

Hecla heap leached 1.65 million tons of ore from startup in 1988 and poured its last gold bullion in August of this year. Total production was 100,000 oz. gold, for a recovered grade of 0.06 oz. per ton.

Barrick’s interest is the estimated 15-20 million tons of ore underlying the oxidized ore which has just been mined out. The underground deposit is estimated to grade 0.09 oz. The ore is refractory sulphide, of the same type that is autoclaved by Barrick at Goldstrike.

Under the terms of the option, Barrick can earn a 70% interest in the property by making option payments and completing a feasibility report by 1997.

According to Alan Hill, Barrick’s executive vice-president of operations, the first phase of an intensive drilling program has been completed but it will be late 1993 before any announcements are made.

At its principal Goldstrike property in Nevada, drilling scheduled for 1993 will focus on the satellite Rodeo and Screamer orebodies. Most of the gold mineralization at these two locations is refractory. The Screamer may materialize as an extension of the ore now being mined from the Betze pit and will be accessible from there. About 20-30 holes will be drilled at each site, says Hill.

An increase in reserves and/or grade resulting from this year’s drilling at the Betze and Meikle projects could be announced by year-end. Routine drilling will continue at both locations and at the Mercur mine, Utah, through 1993.

Two recent drill holes at Holt- McDermott may have important implications for the mine. While no results have been released, Hill says “they look good.” The intersections are 2,500 ft. south of the shaft and 2,900 ft. below surface. The suggestion is that of a parallel, but blind, mineralized structure.