Battle Mountain to option HSK’s Kirkland Lake bets

HSK President Hugh Harbinson told shareholders that Battle Mountain (Canada) Inc. will earn a 70% stake in his company’s Kirkland Lake, Ont., gold properties by spending $4.95 million and making a $1.1 million cash payment.

Situated in the heart of the Kirkland Lake camp, the properties consist of 334 claims (13,400 acres) and include the Lebel Stock, Gull Lake, Vigrass Lake and Gracie East prospects.

But after putting up $2.95 million over four years and paying $750,000 in cash to earn 50%, it is up to Battle Mountain to decide whether it wants to earn the additional 20%.

To do so, Battle Mountain would have to spend an additional $2 million on exploration and $350,000 in cash. A joint venture can be formed at Battle Mountains’ discretion after it has earned either 50%, 60% or 70% in the properties.

“The attraction for us is getting into a major gold camp which has seen minimal exploration since the 1930s,” said Terry Bottrill, Battle Mountain’s senior geologist in Canada.

After approaching HSK earlier this year, Battle Mountain has reviewed all the available data on the properties, but a thick blanket of snow prevented a close look at the ground.

However, Bottrill declined to say which one of HSK’s properties has the greatest potential.

HSK, which recently increased its stake in Toronto-based Queenston Gold Mines (TSE) to 36%, spent $300,000 last year on properties in Ontario and Newfoundland. An additional $435,000 was spent on HSK properties by American Barrick Resources and Minnova Inc. (TSE).

Last February Barrick optioned the Muskasenda Lake property south of Timmins, but after spending $250,000 on 11 drill holes, Barrick elected not to proceed any further. “We intend to go back in there and review the data,” said Harbinson.

HSK and Minnova recently became joint venture partners at the 86-claim Olive South property near Mine Centre, Ont. After spending $480,000, Minnova holds a 51% interest in Olive South where anomalous zinc values range up to 0.25% per ton in grab samples. Last year, a drill hole cut 5.7 m of grade 0.76% copper, 2.17% zinc and 8 g silver per ton.

HSK remains debt free and with a year-end cash position of $225,000. The company’s assets have increased from $5.9 million to $11 million. Harbinson said he has looked at the possibility of combining the assets of HSK, Queenston and Joutel Resources (TSE), but there are no plans to merge the three companies at present.

]]>