Dundee-Palliser ponders $8 million Vezza program

After spending around $5.6 million at the Vezza Twp. properties in northwestern Quebec, Dundee- Palliser (TSE) and partner North American Rare Metals (VSE) are gearing up for an underground exploration program.

“We are examining the possibility of going underground via a shaft or decline,” said Dundee-Palliser President Richard Brissenden, who expects a to make a decision by the end of August.

If it gets the green light, a 1,200-ft shaft would access a gold deposit which has been outlined along a 3,300-ft strike length at a depth of 1,000 ft, by drifting into the zone on one or two levels.

A slightly shorter 1,000-ft decline would take roughly the same approach, Brissenden told The Northern Miner.

With 2.24 million tons of grade 0.15 oz gold per ton (using a cutoff grade of 0.08 oz ) in the main alteration zone, the partners recently completed a 120,000-ft fill-in drill program

While assay results are still pending, Dundee-Palliser must decide on the means of financing the underground exploration program which is expected to cost about $8 million.

A flow-through share issue appears to be the most likely route but the Vezza partners could look to Kennco Explorations as a possible source. Kennco has an option to earn a 20% to 30% interest in the project by putting up 42.8% of the amount spent on the property to date.

The company has the right to exercise that option during a 2-month period beginning Sept 30, 1989.

According to Brissenden, the partners have encountered other zones within the alternating sequence of sedimentary rocks and iron formation south of the Main zone.

These are narrow, generally a few metres in width, and contain anomalous gold values up to 0.28 oz. They have been earmarked for additional drilling, Dundee-Palliser says.

Meanwhile, following a write- down of $180,000 in its investment in major shareholder Camindex Mines (TSE), Dundee-Palliser reported a 1987 net loss of $207,967 or 4 1/2 cents per share compared with a net proft of $277,938 or 8 cents per share at the same time last year.

The object of a takeover bid by MVP Capital Corp. (TSE), Camindex holds a 42.7% interest in Dundee-Palliser. If, as seems likely, the takeover bid is successful, Dundee-Palliser would become a 66%-owned subsidiary of MVP Capital.

Dundee-Palliser increased its total deficit on Dec 31 to $2.2 million, from just over $2 million at the same time in 1986.

During the three months ended March 31, the company also increased its cash position to $175,404 from $7,571 in the first quarter of 1986.

Net income for the first three months of 1988 amounted to $96,073 or 1 cents per share compared to a loss of $12,169 or $0.003 at the same time last year.