Decision near on Murgold claims in Chester Twp.

A production decision may be near for part of the Chester Twp. gold property in northern Ontario owned by Murgold Resources, President C. L. McAlpine reports in the annual report.

Murgold has 294 claims in the area, 63 of which have been optioned to Chesbar Resources, which has been reporting encouraging results from exploration work. Chesbar is earning a 60% interest in the 63 claims by spending $2 million by Dec 31, 1988, and making a payment of $200,000 in cash or the equivalent in Chesbar stock.

Objective of the exploration program is to establish an ore reserve of at least 500,000 tons, grading 0.3 oz gold per ton. A production decision would involve an on-site mill of 300 tons daily capacity, producing an estimated 30,000 oz gold annually, Mr McAlpine reports.

Murgold’s share (40%) of the exploration program cost is $1.12 million.

Because of Chesbar’s encouraging results to date, Mr McAlpine reports a $500,000 exploration program has been prepared covering four claim blocks surrounding the optioned claims. This work would involve geophysics, stripping, sampling and diamond drilling.

Murgold is raising funds for its share of the exploration programs through flow-through financing and a private placement.

Murgold shares were recently trading on the vse in the $1.20 range.

The company reported cash and term deposits worth a total of $83,247 at the end of 1986.