Common sense prevailing as Carolin dumps U.S. firm

It took a while but common sense may have finally prevailed at Carolin Mines where its credibility reached an all-time low after it announced spectacular gold and platinum assays (N.M., Feb 2/87) from its dormant mining operation near Hope, B.C.

The company has completely dissociated itself from Intergold U.S.A. which allegedly had a “mechanical” concentration process that recovered gold and platinum where none was known to exist before. Pointing out that Intergold had not provided certification results for its recovery process or certified results of prior recovery tests, Carolin President Michael Berns confirms the two companies have “agreed to cease dealings.”

Carolin is still protesting a cease trading order by the British Columbia Securities Commission so it can list its shares on NASDAQ and also on a Canadian stock exchange. The commission questioned the validity of the assay results and indeed argued there was “no evidence whatsoever to suggest that they can be substantiated.” Gordon D. Mulligan, deputy superintendent of brokers, also expressed concern that Carolin’s public disclosures might cause a “prospective investor in Carolin shares to assume value which has no evidence to support it.”

Among the expert witnesses called to testify at the hearing was Dr Gordon Bacon of Bacon Donaldson & Associates in Vancouver, whose firm is familiar with the metallurgical characteristics of the Carolin deposit. Mr Bacon argued that it was not economically feasible to process either the gold ore or the tailings at the Carolin mine. He also questioned the competence of several people involved with Intergold from which Carolin has now dissociated itself.

Mr Berns now confirms that Carolin has retained independent consultants to verify the mine’s estimated reserves of 900,000 tons grading 0.126 oz gold. He expects further exploration will be recommended around existing mine workings and on other known gold- bearing areas.

The project was plagued with metallurgical problems and he says the consultants will do a “comprehensive review of the metallurgical aspects of the operation.” This would include changes to the mill flow sheet to increase recoveries and possibly eliminate cyanide leaching of concentrate. An economic analysis will also be done on mine tailings which Carolin believes contain approximately 0.05 oz gold per ton and “no platinum group elements.”

Mr Berns says that Carolin is negotiating a 90% interest in 14.5 sq mi of mineral leases to the north and south of the mine. This would more than double its holdings in the area. The company is also seeking additional working capital for operations and to satisfy existing obligations. Cash requirements by June 30 exceed available funds by approximately $125,000, Mr Bern concedes, adding that Carolin will be “seeking accommodation with creditors.”