Exploration down in ’98 but not out — Argentina, Newfoundland among hot spots for junior companies

Similar in mood to 1997, though comparatively free of scandal, 1998 will be remembered as the year exploration companies replaced promotional antics with survival tactics. But despite the bearish market, several countries saw some intense activity within their borders.

Argentina ranked as one of the hottest areas, thanks largely to the efforts of Argentina Gold (ARP-V). The junior released a string of impressive results from its Veladero gold-silver project, a 60-40 joint venture with Barrick Gold (ABX-T). Among the more spectacular intersections was 255 metres averaging 6.2 grams gold per tonne and 24.5 grams silver starting at a down-hole depth of 62 metres.

While such results initially fell on deaf ears, the junior eventually won over investors, even becoming Barrick’s takeover target in December. The major initiated the action in order to consolidate its properties in the region.

Also making headlines was Yamana Resources (YRI-T). In January, the company began a shallow, hit-and-run drill program on its wholly owned Santa Cruz project in the southern part of the South American country.

The program immediately met with success. The first hole, drilled at the Lejano property, returned 8 metres of 621 grams silver, plus 9.7% lead and 0.46 gram gold. This was followed by similarly encouraging results at the separate Bacon property and by an expansion of the company’s total land package in the region to 1,350 from 598 sq. km.

In December, the junior launched an independent resource study for Bacon, using proceeds from $4.7 million worth of special warrants issued in the early part of that month. As such, it was one of the few companies in 1998 not only to advance its project to the resource-calculation stage but also to convince an indifferent market of its project’s potential.

Not all was glory for companies exploring in Argentina. Viceroy Resources (VOY-T) lost 16% in market value the day after it released initial results from a first phase of drilling at its 60%-owned Gualcamayo property. Though the results were lower than those obtained from surface samples, the company maintained an optimistic outlook, noting that they confirmed “the presence of widespread gold mineralization and significant gold intercepts over substantial thicknesses.”

Alaska enjoyed one its best years ever, with an unprecedented 7,000 claims staked on federally owned land and more than 46,000 claims on state-owned ground. This year’s expenditures are expected to equal those of last year, when US$57.3 million was spent — an increase of 28% over the 1996 figure.

Fueling the flames, Teck (TEK-T) and Japan-based Sumitomo Metal Mining released a series of impressive results from the Pogo deposit on the Stone Boy property. Teck, which is earning a 40% interest, spent more than $5 million on exploration, expanding the deposit’s resource to 9.1 million tonnes grading 17.8 grams gold while discovering a new zone.

Infill and stepout drilling is to renew in the new year, as is underground exploration.

Hoping to duplicate Teck’s success, companies such as Western Keltic Mines (WKM-V) and Hyder Gold (HGI-V), among others, quadrupled the number of staked claims in the surrounding region to 4,000. Exploration was largely grassroots in nature, being carried out by both juniors and seniors alike.

All told, Alaska is believed to have yielded in excess of 20 million oz.

gold over the years but maintains the distinction of being predominantly virgin territory.

Mexico

Mexico’s Zacatecas state attracted its fair share of attention, spearheaded by the discovery in late 1997 of the San Nicolas zone, owned by Teck and Western Copper Holdings (WTC-T). By the time of the March convention of the Prospectors and Developers Association of Canada, more than a dozen juniors had tied up in excess of 20,000 sq. km. surrounding the zone, and more than half of that land was amassed by Kalahari Resources (KLA-V).

While most work in the area was preliminary, Teck and Western Copper outlined a resource, potentially minable by open-pit methods, of 72 tonnes grading 1.35% copper and 2.27% zinc, plus 30 grams silver and 0.53 gram gold. As well, the partners discovered a zone of near-surface silver mineralization.

In northeastern Greece, a promising but virtually unknown gold discovery was made by a group headed by Australia’s Normandy Mining (NDY-T). Dubbed Perama, the zone was outlined with continuous mineralization over an area measuring 700 metres in length and 100-200 metres in width.

Reported oxide intercepts ran up to 11.6 grams gold over 31 metres, starting from surface. As well, several nearby targets kept optimism high.

With investors turning their noses up at overseas projects, Canadian explorers intensified their efforts back home. Ironically, Newfoundland (excluding Labrador) was one of the more active provinces, led by juniors such as Altius Minerals (ALS-A) and Noveder (NED-M). The former focused its exploration on a newly recognized epithermal gold district in the island’s Botwood basin and by year-end had optioned one property to each of Sulliden Exploration (SUE-M) and Teck.

Exploration was also bustling in the more established mining camps, particularly in Ontario and Quebec. The Sudbury district, for example, saw a new crop of juniors spring up in search of platinum group elements.

N.W.T.

Though diamonds were once again the commodity of choice in the Northwest Territories, some companies remained focused on gold and base metals. Such resolve panned out well for Cumberland Resources (CBD-T), which advanced its Meadowbank gold project to the prefeasibility stage in November. Similarly, an independent scoping study on the Meliadine West project, in which Cumberland and Comaplex Minerals (CMF-T) each hold a 22% interest, with the remainder held by the international subsidiary of Western Mining Corp. (WMC), deemed the project feasibile, provided 1.5 million oz. could be blocked out. To that end, WMC carried out an aggressive drill program, the results of which have proved promising (T.N.M., Nov.

30-Dec. 6/98).

In neighboring Yukon, partners Atna Resources (ATN-T) and YGC Resources (YGC-V) completed 6,625 metres of drilling at their Wolf polymetallic property. Mineralization has now been defined along a strike length of 600 metres, and it extends downdip for about 450 metres.

Elsewhere in the territory, partners Glenhaven Resources (GNN-A) and Blackstone Resources (BZZ-V) carried out drilling, mapping and soil sampling on each of the five properties collectively known as the Taiga project. Drilling followed up a nickel-zinc prospected intersected by one of two holes drilled last year and a 1-km-long nickel-zinc soil anomaly located to the west.