Coxheath shooting for Feb decision at Tangier gold bet in Feb ’88

A mine production decision on the Tangier gold property, 100 km northeast of Halifax, N.S., could be made by Coxheath Gold Holdings as early as February, 1988.

Underground exploration work is well advanced. It is aimed at placing a substantial portion of the 1.9 million tons of probable reserves outlined on the property so far into the proven category.

Indicated grades are 0.275 oz gold per ton. But underground chip sampling, done in September, returned values of 0.37 oz gold per ton along a 900- ft strike length.

These values were taken over a width of 4 ft. A 100-ft section along that 900-ft strike length averaged 0.71 oz gold per ton, company President Michael Riddell says.

And on a block of ground, located 5,000 ft to the east of present underground workings, Coxheath has intersected a true width of 25 ft which assayed 0.364 oz gold per ton. Follow-up drilling is on-going.

A $2-million contract for 1,500 ft of underground openings on the main block was awarded to Canadian Mine Development of Mississauga, Ont. Bulk sampling program

The program includes taking a 25,000-ton bulk sample from the potential ore zone. This mineralized rock will be run through a small, 250-ton, gravity concentrator on site. An application to run the mill has been made to the N.S. government, the company says.

Underground access is provided by a 350-m ramp.

Bondar-Clegg, a mineral assay contractor based in Ottawa has agreed to build an analytical lab on the Tangier property. It will provide fast and accurate analysis of exploration samples. Samples are currently flown out to Ottawa for analysis.

The lab will be capable of handling 250 samples a day and will be equipped with two fire assay furnaces and an atomic absorption spectrophotometer.

Coxheath has spent an estimated $4.6 million on the property so far.

The property is subject to a 5% net smelter return.

Last week, the company completed a Nova Scotia Stock Savings Plan issue through the facilities of Walywyn Stodgell Cochran Murray Ltd., which raised $2.5 million. In the past 12 months, Coxheath has raised $12 million, according to the company.

Coxheath shares trade on the Toronto Stock Exchange at a post- crash price of about $1.20.