Investment Comment Three junior golds with overlooked potential

Toronto-based Bitech Energy Resources (ASE) has substantially increased its mineral exploration activities since last year, and recently, the company made a significant gold discovery in Newfoundland.

Bitech, headed by James Wade, a Toronto based professional engineer, is exploring promising base and precious metals projects in Quebec and Newfoundland.

At the Tache project, located 5 km north of Chibougamau, Bitech is earning a 50%-interest from Greenstone Resources (TSE). A feasibility study and production decision are expected in early 1989. The Tache deposit’s reserves are well suited for open pit mining methods and the company says that about 500,000 tons of reserves grading 4.06% zinc, 0.65 oz silver and 0.07 oz gold per ton could be recovered to a depth of 400 ft by this method.

Another promising project in the Bitech portfolio is its Betts Cove gold property, located north of Nippers Harbour on the rugged Baie Verte Peninsula.

Betts Cove was the site of a recent gold discovery. The company recently announced a 23-ft channel sample grading 0.45 oz gold per ton. A drilling program is currently under way on the new discovery and early results have confirmed economic grades over mineable widths. One recent intersection in hole NP88-4 graded 1.66 oz gold per ton over 8.5 ft.

A little-known junior company involved in the search for gold in Guyana is COATS-listed South American Goldfields, headed by Alan Spence, a geologist and 20- year veteran of Inco Ltd. (TSE), where he had responsibility for that company’s international exploration.

The company has signed joint venture agreements with Homestake International Minerals and Denison Mines (TSE) to explore for gold on seven mineral concessions located in Guyana’s precambrian greenstone belts.

Although Guyana currently produces less than half a tonne of gold annually, several mining companies believe that excellent potential does exist there — mainly for the discovery of gold reserves which would be amenable to relatively simple and low cost bulk mining and recovery technologies.

Golden Star Resources (TSE) and joint venture partner Placer Dome Inc. (TSE) have met with considerable success in Guyana recently, and South American Goldfields is hoping for similar results.

McAdam Resources (TSE) could soon have two producing gold mines in its portfolio of properties. These mines could yield in the order of 40,000 oz to 50,000 oz of gold per year and would distinguish McAdam from the plethora of other junior exploration companies by elevating it to producer status.

An innovative milling process coupled with continued exploration success could make McAdam’s Spud Valley property the company’s first producer. Located on Vancouver Island, the Spud Valley property has reported reserves of 247,078 tons at a grade of 0.41 oz gold per ton.

In Quebec, McAdam has more than doubled reserves on its McWatters property since acquiring it. An extensive multi-phase underground program is currently under way on the Rouyn-area property, where reserves stand at 910,869 tons grading 0.19 oz.

Asset expansion, enhanced financial position and a larger shareholder base will be the results of a recent amalgamation of McAdam Resources with Tashota- Nipigon Mines and Quinteko Resources.

Shares of McAdam Resources were traded recently at 80 to 85 on the Toronto Stock Exchange.