Financing, listing for Colray Res.

A $2.5-million financing and a listing on the Toronto Stock exchange has assured Colray Resources of adequate funds for a major expansion activity in some of its Canadian projects.

The Saskatoon, Sask.-based company is participating in three gold exploration projects where Chairman Gerald Colborne expects a “virtual explosion of activity” to break out in 1987.

Colray has two major interests in the La Ronge area in northern Saskatchewan. They include a 60% interest in a large 147,000-acre prospecting permit and the McLennan Lake prospect in the Star Lake area further north.

After exploring the area since l982, and spending $600,000, Colray and partner Great Bend Resources were authorized to divide the permit into 22 blocks. The first of an expected series of arrangements with other companies to explore these areas was made recently with Cogema Canada.

Cogema, which has taken a 4- year option on three blocks covering 21,000 acres, can acquire a 75% interest in the property by spending $400,000 on exploration.

Colray has optioned the 1,600- acre McLennan Lake property to Mahogany Minerals, a company with two gold deposits located further north. Colray has a 70% interest which would decrease if Mahogany spends $500,000 on exploration to earn a 65% participation. Airborne and ground geophysical and controlled surface samplings returned assays of up to 0.41 oz gold per ton.

Close to $600,000 will be spent on exploration and more than 10,000 ft of diamond drilling on Colray’s Courageous Lake gold project in the Northwest Territories. A third season of exploration has been started by Placer Development on the Dec 1 and Dec 2 claims.

If a production decision is made by Dec 31, l989, Placer can elect to pay Colray $1 million cash and a 5% or a 15% net profit interest.

Placer has discovered three zones containing sulphide mineralization with associated gold. In one zone on the two claim groups, a sample from a quartz vein assayed 1.25 oz gold per ton.

After spending $500,000 in exploration funds, Colray has earned a 20% interest with Canadian Gold Resources in former producing Kirkroyal and Lakeside Kirkland mine near Kirkland Lake, Ont. The l987 program involves dewatering of one shaft and 5,000 ft of drilling, mapping and bulk sampling. According to Canadian Gold President Gordon Leliever, the program will take six months to complete.