Bond Gold set to expand North American output

Australian business magnate Alan Bond, with his penchant for corporate juggling and getting things moving, is well positioned to make waves on the North American gold mining scene.

His company, Bond International Gold Inc. (BIG) went public on July 28 this year, and successfully raised $309 million(US) from its initial public offering in the United States.

Through a program of expansion and development on its properties in North America, Bond hopes to double its annual gold production from the current 342,883 oz in 1988, to 743,200 oz in 1990. To put this in perspective, Placer Dome’s (TSE) annual gold production for the year 1987 totalled 525,160 oz.

Bond’s only Canadian producer is its Golden Patricia mine, located 40 miles west of the town of Pickle Lake, Ont. It is expected to produce 48,000 oz of gold at a projected cash cost of $262(US) per oz during 1989. The company also holds a 35 mile long land position in the greenstone belt surrounding the mine. Additional reserves are currently being delineated on these holdings where encouraging results have been encountered.

BIG was organized earlier this year by the prominent Australian businessman to hold all of the gold properties and investments of his family company, Dallhold Investments Pty. Ltd.

Dallhold owns 58% of BIG’s outstanding shares and elects its entire board of directors, with Alan Bond firmly at the helm as the company’s chairman and principal shareholder.

The company’s annual gold production for fiscal 1988 was 342,883 oz from mines located in Chile, Australia and North America. BIG forecasts its product ion will double to 743,200 oz over the next two years, mainly due to increased output from North American-based operations. El Indio mine

During 1988, Bond’s North American properties accounted for only 14% of its total gold production. The company’s 83%-owned El Indio mine in Chile accounted for the lion’s share of its production, yielding 182,572 oz, or 53% of the over-all total. BIG’s Australian operations produced 113,842 oz or 33% of the company’s total gold production.

In 1984, Alan Bond began to invest in gold mining by acquiring interests in West Australia’s historic “Golden Mile” camp at Kalgoorlie. By consolidating operations of adjoining properties and utilizing large scale open pit mining methods, Bond plans to boost gold production from that area.

Bond’s big open pit gold mining concept at Kalgoorlie calls for a “super pit” to be created for the mining of adjoining low grade surface reserves. A six million ton per day mill is also part of the plan. The “super pit” will be about 13,500 ft long, 4,000 ft wide and eventually 980 ft deep. By comparison, Syncrude’s Alberta tar sands open pit measures 16,400 ft by 22,965 ft and has a depth of 164 ft.

The company’s principal property in the United States is the Bullfrog development project located in Nevada, which was discovered by St. Joe Gold just prior to its acquisition by Dallhold in October, 1987. Bond Gold paid over $500 million to acquire all the common stock of St. Joe Gold Corp., and used the proceeds from its recent financing in the U.S. to reduce much of the acquisition related debt.

Bullfrog is expected to produce about 220,000 oz of gold per year starting in the fourth quarter of 1989. About the same amount of gold is expected annually from the company’s El Indio mine in Chile. $23 million for exploration

Out of planned exploration expenditures totalling $23 million per year, Bond expects to spend about one third in North America. In addition to proving up more reserves at its producing operations, BIG will also place a major emphasis on “grass roots” exploration activities. The company cites the El Indio and Golden Patricia mines as successful examples of the grass roots approach to exploration.

Through the purchase of St. Joe Gold, Bond acquired an experienced core of exploration professionals. In North and South America, BIG has some 236 geoscientists and technical staff employed in exploration and support roles.

Bond Gold Canada, BIG’s 100%- owned Canadian subsidiary has exploration offices located in Toronto and Vancouver. The company’s most advanced Canadian exploration properties are its Pickle Lake area projects in Ontario, and the Darius prospect in northwestern Quebec. The Darius is a joint venture project with Breakwater Resources (TSE) which has a 51% interest and is operator. The partners are currently dewatering an old shaft on the property and plan to do underground drilling in the future.

Desmond Kearns, president of Bond Gold Canada, says BIG’s wholly-owned Canadian subsidiary will probably seek listing on the TSE in the near future. He said the company would like to develop a Canadian following. Kearns described Alan Bond as a hands-on type of manager, who on a recent visit to his Canadian operations made a point of personally visiting each property.

In a slick video-tape produced by BIG, Alan Bond is described as an example of Australian entrepreneurship and a new force loose in the World. The shrewd Australian investor with an eye for opportunity has set his sights on Canada and, apparently, likes what he sees. Kearns says he anticipates strong support from management for Canadian opportunities. Working with a current exploration budget of about $5 million, Kearns said that figure is likely to grow in the future.