Goldpost nears production, despite shareholder doubts

At Goldpost’s recent annual meeting in Toronto, Joe Rankin, a long time shareholder, complained that the company appears to have no real plan for the future and that with gold prices at $384.50(US) shareholders are “facing an ever receding horizon.”

“We say we are going to mine and then we seem to keep on drilling,” he said.

While chairman and former federal cabinet minister Eugene Whelan is currently in Russia and therefore unavailable to answer questions, Treasurer Charles Greenfield said Goldpost’s share price (39 cents on the Toronto Stock Exchange) has impeded the company’s progress. “Any flow-through financings would have resulted in too much equity dilution,” he said.

“Like everyone else, we are hoping that gold prices will go back up again,” added President Pat Heenan.

Last year, Goldpost spent $8.4 million to explore four gold properties, two of which could be brought into production quickly given the right gold price.

First off the mark should be the Hislop West property where drill- indicated reserves to the 400-ft level stand at 19,230 tons of grade 0.59 oz gold per ton.

A custom milling agreement (in the order of $25 to $30 per ton) has already been signed and as soon as a crusher can be found for sampling purposes, Goldpost will mine out about 9,976 tons of ore grading 0.81 oz from above the 250 ft level.

At a cost of about $50 per ton, Heenan is hoping that a Hislop West mining operation will generate enough cash to pay off a $1.8- million debt load and spark a production decision at the adjacent Hislop East property.

However production at the wholly-owned Hislop East, where possible reserves stand at 835,544 tons grading 0.17 oz, would be contingent on the price of gold rising to $390(US), according to Heenan.

Like Hislop West, the East property is regarded as almost a turn key operation. With a 3,000-ft decline (to the 450-ft level) already in place, the 17-claim property needs a small amount of stope development to be ready for production.

However, New Kelore Mines (TSE) is entitled to a 25% net profit royalty after Goldpost has recovered exploration and pre-production costs. In 1988, Goldpost spend $5.3 million on Hislop East.

Last year, Goldpost carried out a small amount of surface drilling on its Reserve Creek and Reserve Creek extension properties near Fort Hope, Ont. Results included 28 ft of grade 0.24 oz and 5 ft of grade 0.47 oz.

No work was carried out on the 50%-owned Holcorp gold property which lies to the south of Hislop East.

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