Central Crude play paying off for Noranda

If Richard Nemis was a little overexuberant in his analysis of Central Crude Ltd.’s (VSE) achievements in the Mishibishu, Ont., gold camp, no one at the company’s annual meeting could really have blamed him.

As recent drill results would suggest, the Central Crude President may have made a wise choice in deciding to hang on to its 40%-owned Eagle River claims near Wawa, Ont., when exploration funds were more difficult to come by.

Certainly the market seems to think so. Buoyed by results from the 290-claim Eagle River gold prospect where Central Crude is joint venturing with Hemlo Gold Mines, (TSE) the Central Crude issue recently peaked at $4.45 on the Vancouver Stock Exchange after trading at 35 cents only 12 months ago.

Most of the excitement surrounding this company was sparked by a number of gold discoveries on a 5,300-ft stretch at the centre of Eagle River which Central Crude acquired during the Hemlo gold rush around 1982.

Needing a major company to help justify his confidence in the area, Nemis offered Noranda Exploration the opportunity to earn a 60% interest in return for $1 million in exploration expenditures by September, 1989, and a $90,000 cash payment. Heavy equipment

From Central Crude’s perspective, that offer might seem a trifle generous but after airlifting some heavy equipment and diamond drills to the property, Noranda has outlined nine to 15 separate zones at the centre of the property.

As operator on behalf of Hemlo, Noranda has two drills on site and is preparing to move a third deeper drill to probe the No 8 zone, where most of the action has centred, below 500 ft.

Some good results were also obtained on the No 7 zone including 5.8 ft grading 1.06 oz and 4.3 ft of 0.21 oz.

Recent results from the No 8 zone which strikes for 3,300 ft across a dioritic intrusive include 26.2 ft grading 0.28 oz, 21.6 ft grading 0.11 oz, 15.5 ft grading 0.30 oz gold per ton, 8.2 ft grading 3.22 oz and 6.2 ft grading 0.57.

“Our agreement with Noranda isn’t as sweet as some of the other deals concluded at Mishibishu,” said Nemis. “But we needed to get them into the area.”

According to Nemis, the geological environment is similar to Muscocho Exploration’s (TSE) Magnacon property which is undergoing a $29-million preproduction program. The Eagle River partners are getting a “nuggety effect” in assays as Noranda explores what Nemis called a vein type system.

“We can’t make predictions now, but we feel we are getting into something with high tonnage implications,” he told The Northern Miner. “The continuity of the shear zone is spectacular,” he said. Magnacon property

Meanwhile, the joint venturers are spending between $2 million and $3 million to build a road from the exploration site to the Magnacon property three miles north. Within weeks, Central Crude and Hemlo will form a 40%, 60% joint venture at Eagle River before beginning the next stage of exploration. Road construction got under way last week.

With 32,480 acres at Mishibishu, Central Crude is the camp’s largest land holder.

The company also has a number of grass roots properties in its portfolio including the 99-claim Macassa Creek where Hemlo can earn a 51% interest in by spending $400,000 cash and $1.6 million on exploration over four years.

Held under a 50/50 joint venture with Joutel Resources (TSE), Macassa Creek is on the northlimb of the Misibishu Lake belt on trend with a deformation zone under exploration by Muscocho, Granges Exploration (TSE) and Dominion Explorers (TSE).

A minimum of 3,300 ft of drilling is planned at Macassa Creek this year.

Central Crude can also earn a 50% interest at Joutel’s Blue Quartz property northeast of Matheson, Ont., Central crude is also the sole owner of 60 claims adjoining the Eagle River property to the east where a preliminary prospecting and airborne geophysics program is planned.