Hopes of Syngold chief, rest on Donalda property

If Syngold Exploration (TSE) is to join the ranks of Canadian gold producers, the company’s first output should come from the Donalda project near Rouyn-Noranda, Que.

While Syngold is busy with exploration projects in the Chibougamau, Que., and Noranda camps, President Barry Simmons has high hopes for a mid-1989 start up at his company’s 35%-owned Donalda property.

Syngold and partner Minnova Inc. (TSE) (65%) will underline their confidence in the former producer by spending $10 million on an underground exploration program designed to examine an extension of the Donalda gold zone.

A major surface drill program has already outlined 804,000 tons grading 0.25 oz gold per ton but the joint venturers will attempt to prove up those reserves by dewatering the old shaft and drilling from a depth of about 1,000 ft.

Operator Minnova has already dewatered down to the 850-ft level but another 120 ft remains to be drained before the company will begin to drift out towards the zone.

“The program should be completed by the first quarter of 1989 and we could be in production by next summer,” said Simmons at the company’s recent annual meeting in Toronto. Mine material

Preliminary metallurgical tests on material from the old mine produced 96% recoveries and the stability of the ground is another source of encouragement for the joint venture partners. “There is hardly a rock bolt in the whole mine,” Simmons told The Northern Miner.

With $1 million in working capital and $5.25 million in flow- through dollars to draw on, Syngold considers itself adequately equipped to finance its share of exploration costs at Donalda ($3.1 million) and the company’s other projects.

They include the Owl Creek West property near Timmins, Ont., where Syngold (35%) and partner Falconbridge (65%) conducted a major surface drill program last year.

While drilling has outlined a mineralized zone with a 500-ft strike length and a vertical depth of between 500 ft to 2,000 ft, the program was insufficient to contemplate a mineral inventory.

After obtaining a number of encouraging assays including 16.4 ft grading 0.30 oz and 32.7 ft averaging 0.35 oz, Simmons is waiting for the results of a deep drilling program below Falconbridge’s adjacent Owl Creek open pit. Exploration on Syngold ground has been deferred until those results are known. Owl Creek

“About 20,000 ft of drilling in an area between a depth of 1,000 ft and 2,000 ft is needed to establish drill-indicated reserves at Owl Creek West,” said Simmons.

Meanwhile, in the Chibougamau camp where Syngold holds some 22,800 acres, Simmons says he is intrigued by the prospects for the Obalski property where the company has just completed 19,000 ft of drilling.

In a joint venture with Greenstone Resources (TSE) of Toronto, Syngold can earn 50% by spending $2 million by July, 1990, at the Obalski property which is known to host 190,000 tons grading 1.63% copper and 0.11 oz gold.

The site of some sporadic production, Obalski contains a 3-compartment, 275-ft shaft and two adits. The second adit was excavated in the early 1980s by Camchib Resources to access the D vein.

A couple of drill holes which tested the C and D gold zones 1,000 ft west of the old mine shaft, intersected a new sulphide zone at a depth of 1,200 ft. Assays included 17 ft grading 0.28 oz gold and 4.5 ft of 0.21 oz. Other significant intersections from the 19,000-ft program include, 5 ft of 0.39, 4 1/2 ft grading 0.33 oz and 0.09 oz across 100 ft.

So far, Syngold has outlined the zone along a strike length of about 4,000 ft and a depth of 2,000 ft but a 4,000-ft area still remains to be tested, Simmons says.

Syngold is planning a 5,000-ft drill program at the Ramsay claims in Chibougamau where detailed channel sampling along a 95-ft strike length averaged 0.27 oz gold over a width of 3.8 ft.

A member of the Aur Resources (TSE) group of companies Syngold, had 8.7 million shares issued at the close of 1987. They were trading recently on the Toronto Stock Exchange at $1.25 in a 52-week range of $5.63 and $1.15.