GLOBAL SEARCH FOR GOLD — Abcourt plays waiting game in northwestern Quebec

Junior Abcourt Mines (ABI.B-M) is an example of a domestic mining company that is ready to bounce back into the production mode whenever gold or silver prices return to their former highs.

The company’s base of activities is 6 miles northwest of here, at its near-dormant Elder mine, a past producer of some 352,000 oz. gold.

The wholly owned Elder property comprises a mining concession and 24 contiguous claims totalling 1,468 acres. The mine itself has two shafts with 14 developed levels. The main, 3-compartment No. 2 shaft extends to an undeveloped 16th level, at a depth of 2,550 ft., whereas the No. 1 shaft, excavated in the 1940s, is used for ventilation. Surface facilities are well-maintained and include a head frame, maintenance buildings and an office complex.

Gold, first discovered at Elder in 1933, occurs in quartz veins hosted within acidic intrusive rock, with recent work identifying two new gold-bearing zones at the far west and east sectors of the mined areas, where production ceased in 1990.

Using a cutoff grade of 0.1 oz. gold per ton and dilution of 20%, the Elder mine’s reserves and resources have been estimated at 525,000 tons grading 0.145 oz. gold per ton in the proven category, 378,000 tons at 0.148 oz.

gold in the probable category, and 547,000 tons at 0.144 oz. gold in the possible category — for a total of more than 210,000 contained ounces of gold.

Using a cutoff of 0.15 oz. gold per ton, the mine’s total resources are estimated at 650,633 tons grading 0.196 oz. gold, equivalent to 128,000 contained ounces.

Cash costs are estimated at US$280 per oz., says Renaud Hinse, Abcourt’s long-time president, who adds: “It would be nice to have gold prices return to a level at least $100 more than that before we consider production.” Now that the de-watering process at Elder has rendered the 12th level accessible, the next step will be the advancement of drifts on several levels to both the eastern and western sectors. From there, a 10,000-ton bulk sample will be extracted from eight stopes.

Longer-term plans include the opening up of new drifts at the 15th and 16th levels, a move which management feels may at least double the mine’s reserves.

As well, surface drilling is being considered for the autumn.

The total cost of development, including a $1-million expenditure for mining equipment, is estimated to be $3.5 million (net of sale of development ore and receivable credits from mining duties).

Two major unresolved factors are the costs of any future custom-milling arrangements and whether any more potential buyers of the mine will appear.

(A $4.4-million deal fell apart in the spring of 1996.)

Next door to the Elder property lies Abcourt’s 820-acre Tagami gold prospect, situated in range II of Duprat Twp.

A recent 21-hole, 9,500 ft. program of diamond drilling on the West Gold showing outlined a zone of gold mineralization extending some 1,000 ft. The holes were drilled into the western and eastern extensions of a 2,250-ft.-long, northeast-trending, southeast-dipping shear zone where gold occurs within quartz veins.

The best intersections drilled since March 1997 have been: 5 ft. (from 632 to 637 ft.) grading 0.376 oz. gold in hole 31; 8 ft. (from 500 to 508 ft.) of 0.178 oz. in hole 34; and 5.6 ft. (from 230 to 236.5 ft.) of 1.228 oz. in hole 35.

The best results from Abcourt’s earlier holes were: 7.7 ft. (from 200 to 207.7 ft.) grading 1.123 oz. in hole 22; 5 ft. (from 210 to 215 ft.) of 0.327 oz. in hole 24; 4 ft. (from 220 to 224 ft.) of 0.422 oz. in hole 26; and 5 ft. (from 490 to 495 ft.) of 0.694 oz. in hole 28.

Seven of the holes intersected the mineralized zone at depths between 200 and 350 ft., while the deepest intersection was at 632 ft.

Abcourt plans to continue drilling the prospect in the autumn in an attempt to justify an underground development program.

Farther east, at its wholly owned Abcourt-Barvue silver-zinc mine, Abcourt holds the largest silver reserves in the province.

Situated 35 miles northeast of Val d’Or, the property comprises 9,600 acres consisting of 109 contiguous claims and three mining concessions.

Total resources in the proven and probable categories stand at 794,094 tons grading 7.53 oz. silver and 3.76% zinc, all within a 7,000-ft.-long structure that has been little-explored below the 600-ft. level.

The eastern part of the deposit was mined from 1952 to 1957, during which time 5,000 tons of ore were extracted daily from an open-pit which reached a depth of 250 ft.

In 1985, after spending $20 million on underground development, Abcourt resumed production in the central portion of the mine. From then until 1990, some 700,000 tons of ore were mined with an average grade of 4.0 oz. silver per ton and 5% zinc.

Since then, Abcourt has maintained the existing on-site facilities, waiting for silver prices to improve.

Another of Abcourt’s exploration properties is the Vendome

zinc-copper-silver-gold property in northwestern Quebec, a portion of which is optioned to Noranda Mining & Exploration, a subsidiary of Noranda (NOT-T).

The firm’s remaining prospects are: the McKenzie-Roy copper-zinc property; the Hebecourt gold-silver-copper-zinc property; the Lamorandiere gold-copper-zinc property; and the Puisseaux-Sud gold-copper property. All are situated in northwestern Quebec.

In December 1996, the company completed two private placements of 1.7 million shares. One at 25 cents per share yielded $347,000, while the second, at 27 cents per share, generated $76,000. Some $337,000 of that has been earmarked for exploration at Elder, Tagami, Vendome and a gold showing at Abcourt-Barvue.

Abcourt’s management is closely linked to the Hinse family, which together own about 35% of the company’s shares. Directors and officers include Renaud Hinse’s wife, son and daughter.