Hemlo Lawsuit hasn’t hindered Corona’s growth

“Our criteria is to look for low- cost potential,” President Peter Steen said when asked about future property acquisitions.

Corona, created half-way through 1987 by the amalgamation of five Royex-related companies and with interests (at last count) in 10 producing gold mines, was recently boasting an average cash production cost of $207(US) per oz, placing it among the leaders in this category.

With total gold output last year of about 455,000 oz, and with an 11th mine, the Marigold in Nevada, set to open this year, plus expanded operations at some of the existing mines, Corona is forecasting total production of 615,000 oz for 1989.

(Included in the above totals is production from the Page-Williams mine at Hemlo in northern Ontario, which the Supreme Court of Ontario awarded to Corona, then known as International Corona Resources, in March, 1986, in a dispute over ownership with LAC Minerals. LAC appealed all the way to the Supreme Court of Canada; that case was heard last October, but no decision had been handed down at the time of the interview.

(Output at the Williams mine totalled about 350,000 oz in 1988. Corona and Teck Corp. have an agreement to operate the Williams mine in a 50/50 partnership, should the final decision go in Corona’s favor.) Rapid growth

Growth of Corona has been nothing short of fantastic, the company having been helped along in its junior years by west-coast promoter Murray Pezim.

“Three-and-a-half years ago we only controlled 15,000 oz,” Steen, 58, a native of South Africa, said.

The flourishing Hemlo camp means a lot to Corona. The company has a 50% interest in the area’s David Bell mine, which hosts ore reserves of about 7.2 million tons grading 0.34 oz gold per ton and is expected to be in production for at least another 12 years. Steen said tonnage, grade and recoveries have all been higher than expected.

Underground operations at the mine have moved to the lower levels where the mineralization is richer and wider. Total output at the mine (and from a neighboring quarter claim in which Corona has a 25% interest) last year was about 240,000 oz, at an average production cost of about $120(US) per oz. That production total is expected to rise to about 270,000 oz this year.

At the Williams mine, proven and probable reserves are estimated to be in excess of 35 million tons averaging 0.2 oz. Corona management believes the mine has the potential to double its reserves. Mine output this year could reach 490,000 oz.

In the U.S., where Nevada has become a significant mining area, Corona is looking for about 100,000 oz gold this year from the five projects in the state in which it has interests. New mine in Nevada

The latest of these properties to open (the official ceremony took place last October) was the Santa Fe mine, which Steen said came in 15% under its capital budget. A heap-leaching operation, the mine is expected to turn out 50,000 oz gold and 150,000 oz silver annually at a production rate of 6,000 tons per day, at a cash operating cost below $250(US) per oz.

Other producing properties there in which Corona has an interest are the Pinson and Preble mines and the Dee mine located at the north end of the Carlin belt; the three mines are combined heap-leach and milling operations. The Marigold project (23.3% interest), set to produce in May, is also a heap- leaching and milling operation which is expected to turn out 20,000 oz gold this year and 60,000 oz in 1990.

The company has a 30% interest in the Torres gold-silver complex in Mexico, the project located about 150 miles northwest of Mexico City.

In British Columbia, the wholly- owned Nickel Plate mine produced about 90,000 oz last year but was thought to be performing below expectations. A re-evaluation of the property’s reserves saw the total drop from 9.9 million tons grading 0.13 oz gold to 9.1 million tons grading 0.09 oz.

Changes at the mine have included expansion of the crushing capacity and boosting the daily throughput 300 tons to more than 3,000 tons. Also, there has been experimentation with treatment techniques. Exploration potential

Steen said the exploration potential at Nickel Plate and neighboring properties is considered to be excellent. The company last year drove an adit into the deep section of the Nickel Plate deposit, came up with ore grading 0.22 oz and began supplementing surface ore with 200-to-300 tons per day of the underground ore.

In Saskatchewan, Corona has a 30% interest in the Jolu mine which opened last autumn and is expected to produce about 50,000 oz per year. And in northern Ontario, the company has a 50% interest in the producing Renabie gold mine.

Looking further ahead, a 12th mine is in the works for 1990, the Musselwhite project in northern Ontario where Steen said a deposit hosting 7.5 million tons grading 0.23 oz is being developed. Corona has a 17.1% interest in Musselwhite, which may increase should the company purchase all or part of a partner’s interest.

Like other majors, Corona has an active exploration program; last year the company budgeted $25 million for mineral exploration. It has also acquired equity positions in a variety of promising mining companies, such as Dolphin Explorations (TSE) and Breakwater Resources (TSE), and in the mining- related Prime Capital Corp., which is involved in funding minefinders.

Other interests of Corona include diamonds (the company has entered into an agreement to explore for diamond-bearing kimberlite deposits in northern Saskatchewan) and oil and gas (a 25.4% interest in Poco Petroleums).

And there are the industrial minerals. Corona owns a Suzorite mica operation in Quebec which Steen said has “tremendous growth potential,” and the company is earning an 80% interest in the Fort Cady colemanite deposit in California.

Two pilot tests have been undertaken at the Fort Cady project where boric acid is to be produced through a solution mining process. The company, at the time of the interview, was negotiating an $80 million (US) financing scheme to bring the deposit on stream.

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