Freewest keen on Benoit claims despite dispute

Government bureaucracy and a claims dispute are holding up exploration work on what is probably the best gold discovery in Quebec in the last year, says Mackenzie Watson, president of Freewest Resources (TSE).

Last winter, Forbex Mining Resources (ME), a Rouyn-Noranda, Que.-based exploration company, disputed about 50 of Freewest’s 300-plus claims on the Benoit Twp. gold exploration project in northwestern Quebec, between Senneterre and Chibougamau and near the town of Miquelon.

Watson said at the company’s annual meeting here that the dispute on Freewest’s optioned and staked claims came after the gold discovery was made. “I don’t think these people have a hope of winning,” he remarked. The site contains a reserve estimate of a half-million tons grading 0.22 oz. gold per ton, Watson said.

Quebec mining ministry officials visited the site last August and inspected the disputed claims, and a decision had been expected by September. But a day before Freewest’s Oct. 11 annual meeting, Watson called the mining department and was told the file had just been opened.

Once the claims dispute is resolved, Freewest will drill the property or seek joint ventures with majors, Watson said.

A short list has been compiled of six companies that have expressed interest in the project.

The gold-bearing zone is located below a lake. Drilling cannot start until the first week of January because of the need for ice before work can begin. The property could be drilled from a barge, but costs would be prohibitive. Watson said gold-bearing boulders were found on the site in the 1930s. Prospectors, however, were never able to find the source.

Although Watson has known about the site for years, staking was frozen from 1970 to 1985 because the property is located within the area of the proposed James Bay hydroelectric development.

Watson flatly denied a rumor voiced by a shareholder that American Barrick Resources (TSE) is negotiating a takeover of Freewest.

With its interest in the Holloway gold project in northeastern Ontario, Freewest stock (in the $2.90 range at the time of the meeting) is worth materially more, at least in the $5 range, several shareholders at the meeting said. “It’s a tough market out there,” Watson said.