Investment Comment High hopes for Bryndon

During a recent North American tour, a number of British analysts stopped in at Bryndon Ventures’ Rossland claims just south of Rossland B.C. While it isn’t known how long they spent at the property, it is obvious that they were impressed by what they saw.

“I have very high hopes for Bryndon’s Rossland camp and its joint ventures with Brenda Mines,” writes analyst Nick Fuller in an introduction to Kitcat and Aitken’s recent research report.

He is supported by Kitcat (of London, England) analysts Richard Horton and Paul Nagy who are recommending the shares as a speculative buy for gold, oil and gas. The Bryndon issue traded recently on the Alberta Stock Exchange at $1.15 in a 52-week range of 52 cents and $1.25.

While Calgary-based Bryndon’s natural gas interests are expected to generate $850,000 in revenues this year, the Kitcat recommendation is based largely on a former polymetallic producer called the Rossland property.

Located about seven kilometres north of the U.S. border in B.C.’s Trail Creek mining division, it is currently being explored by Bryndon and 50/50 joint venture partner Antelope Resources.

The 90-claim property has been mined on at least two occasions since it was discovered in the late 19th century. It lies adjacent to the old Le Roi-Centre Star mine. Shear zone

Work carried out in the early 1950s and mid-1970s has shown that the potential exists for substantial tonnage and grade in at least one mineralized shear zone, say Hortan and Nagy.

Between 1891 and 1941, the Roi mine produced approximately 6.2 million tons grading 0.47 oz gold per ton, 0.6 oz silver and 1% copper to a depth of 500 m.

An additional 6,450 tons was also extracted by a contract mining company between 1972 and 1978.

This year, Bryndon is planning to devote half of its $2-million budget on gold exploration. According to the Kitcat report, $700,000 is earmarked for Rossland where the current drill program got under way on Jan 12.

Under a recent agreement, Antelope must spend $500,000 on exploration and development by 1989 to earn a 50% interest.

As reported (N.M., May 26/86), Bryndon cut some good gold values over widths of less than 3.5 ft in three diamond drill holes. Values included 0.369 oz gold and 0.5 oz silver over 0.6 m and 0.531 oz gold and 0.53 oz silver over 1 m. Mineral potential

Rossland test results so far indicate the Bluebird-Homestake group claim represents the greatest mineral potential, says Kitcat. “Drilling suggests that surface grading of the gold-bearing north shear zone is approximately 0.664 oz gold and 0.91 oz silver while the Homestake shear zone has returned results of 0.30 oz gold and 0.36 oz silver,” the Kitcat research report says.

Starting in May, Bryndon is also planning to spend $225,000 on exploration at its wholly-owned Gilman gold property 60 km southeast of Revelstoke, B.C. Bryndon bought the properties along with about 2,000 tons of stockpiled ore grading in excess of 1.0 oz gold. Plug holes intersected 10 ft of 0.3 oz gold and 14 ft of 0.7 oz gold, Kitcat says.

The company was scheduled to spend $70,000 by the end of February on exploration at the Kingbird claims in northwest Ontario where gold was first discovered in 1900.

Meanwhile, Bryndon’s oil, gas and sulphur division (which controls exclusive process patents for the production of sulphur fertilizer and sulphur purification) continue to grow.

When the Kitcat report was published Feb 22, revenues from the gas division were expected to be approximately $850,000 for 1988, rising to $1.3 million in 1989 and $1.8 million in 1990. Gas revenues

But more recently, Bryndon said it is anticipating gas revenues this year to be over $1.5 million.

During 1988, Bryndon’s share of oil and gas exploration costs are expected to be around $750,000 with $350,000 coming from cash flow and cash on hand. The company has varying interests in nine natural gas wells in the Edmonton area.

Kitcat says the remaining $400,000 is being raised in new financing.

Bryndon’s fertilizer and sulphur purification groups are currently being amalgamated into one operating division by a Bryndon and Brenda Mines management team. By contributing 25% of $6 million direct development costs, Bryndon is earning a 15% interest while Brenda retains 85%.

About $4.4 million is expected to be spent this year on plant contruction and the acquisition of Tiger Chemicals’ sulphur business. The agreement with Tiger Chemicals will eliminate the last significant competitor and give Bryndon access to state of the art equipment.

To fund its 1988 program, Brynden recently announced a private placement of 1.1 million common shares at 91 cents per share with warrants on a 2-for-1 basis at $1.65 exercisable March 1, 1989. Proceeds of $950,950 were placed in Bryndon’s treasury.