Corona looks at possibility of mining Nfld. gold bets

When it comes to putting gold deposits into production, five are sometimes better than one. At least that’s the theory that Corona (TSE) senior geologist John Thompson is working with as he attempts to persuade the owners of five small gold deposits in Newfoundland’s Baie Verte peninsula to combine forces.

Over the past few weeks, Thompson has held preliminary discussions with management of Noranda (TSE), Major General Resources (VSE) and Bitech (ASE) in an attempt to persuade them to pool their projects into a single company.

As all of the deposits are within 50 miles of each other, Thompson believes a 1,000-ton-per-day mill at the old Rambler copper mine could be converted to process ore from the five properties.

Depending on the size of the deposit, contributing companies would share in both costs of setting up the operation and in revenues if and when it is up and running.

While some of the companies involved are concerned about the cost of determining the minability of the deposits involved, they are receptive to the idea.

For example, Bitech President Jim Wade says he is interested in getting the Nugget Pond property into production and will look at any responsible proposal that could hold his company to do so.

Although some of his Newfoundland colleagues are cool to the idea, it may be worth pursuing, says Dan MacInnis, division manager at Noranda Exploration’s Newfoundland and Labrador region. “The price of gold would have to be a little better,” he said.

Should Thompson’s idea reach the planning stage, the resulting holding company would include the following projects: — Major General and Noranda’s equally owned Hammer Down gold zone which contains 430,000 tons grading 0.34 oz. gold per ton. Hammer Down is on the Rendell-Jackman property. — Bitech’s 566,000-ton, grading 0.41 oz. Nugget Pond deposit. — The Varna Gold (ASE), Corona joint venture at Pine Cove where preliminary reserves stand at 1.2 million tons grading 0.16 oz. Corona can earn a 70% project interest by delivering a feasibility study to Varna. — The Stoger Tight joint venture involving equal partners Noranda and Murray Pezim’s company International Impala Resources (VSE). Reserves outlined so far stand at 500,000 tons grading 0.22 oz. — Although no official reserves have been published, the Noranda, Corona joint venture at Devil’s Cove has also been suggested as a possible source of mill feed. Spectacular occurrences of visible gold have been reported within a narrow vein system on the property.

With all of those deposits combined, Thompson estimates he would have about 2 million tons of gold reserves grading 0.25 oz., enough he estimates for a small mining operation. 7EWhen he spoke recently to The Northern Miner, Thompson was about to fly out to Vancouver where he planned to present his plan to senior management.

“We have a rough economic number that needs refinement,” said Thompson who is also planning to discuss the project with the Newfoundland government. “With gold standing at US$375 per oz., it would be a rough proposition without some government help,” he said.