At a well-attended broker and investor presentation here, President James Wade told an audience of about 60 people, “We believe we’re on to what may be a significant deposit at Nugget Pond.”
If Wade is right, Nugget Pond could become one of the most talked about ponds in the province, which itself is seeing record levels of mineral exploration activity these days.
Former Newfoundland politician John Lundrigan spoke at the investor meeting also. He was one of the original vendors of the property and remains a strong local supporter of the project.
“We’re becoming more acquainted with how to participate in junior mining companies here,” Lundrigan said. “We’ve managed to involve a lot of Newfoundland people in this venture.”
At a time when many junior mining companies are finding it difficult to raise capital for exploration projects, Bitech had no trouble recently raising an additional $900,000 through a private placement to continue drilling at Nugget Pond.
Investors seem confident the company can continue to come up with the kind of results it obtained during phase one, the highlight of which was an intersection grading 0.46 oz gold per ton over 56.7 ft in hole 16, drilled just before work stopped last December.
Bitech has recently released the results from two new holes containing intercepts of 0.40 oz over 33.4 ft and 0.41 oz over 72.5 ft in holes 17 and 18 respectively. The holes were drilled about 80 ft along strike from hole 16. No commercial grades were encountered in holes 19 and 20, also completed recently.
Trading of the company’s shares was halted by the Alberta Stock Exchange for the news release announcing the drill results. Trading resumed at $2.25. In early December the stock was trading at 50 cents .
When The Northern Miner visited Nugget Pond earlier this month, a major phase 2-drill program was under way. Bitech has increased the size of this program to 60,000 ft from 30,000 ft.
The company is currently in the process of forming a joint venture with Equity Silver Mines (TSE) to further fund exploration on the property. Equity Silver, controlled by Placer Dome (TSE), owns a silver/copper mine near Houston, B.C. Under a formal joint venture agreement to be signed in March, Equity will have the right to earn a 50% interest in Nugget Pond. The deal calls for Equity to make exploration expenditures totalling $12.2 million over a four year period and option payments of $12.3 million. Equity will also be responsible for production financing estimated to be $50 million. Bitech will be operator of the joint venture. Bitech reports it has received an advance of $250,000 with a further $800,000 due upon signing of the formal agreement. Equity will be responsible for funding the current drill program to a maximum of $2.2 million.
The property, Nugget Pond, takes its name from a small pond situated beside the original discovery trench, where delicate gold grains, some up to one gram nugget-size, were panned from geochemical soil samples.
Geologically, the gold zone consists of disseminated pyrite (5%-40%) hosted by a black- coloured sedimentary rock at the top of a pillow lava sequence. The zone dips to the southeast and is overlain by a unit interpreted as a lapilli tuff.
The gold potential of the area was originally recognized by geologist Derek McBride in 1987. It fit a geological model he had developed a few years earlier from his study of gold mines in the Beardmore- Tashota area of northern Ontario.
Last year, Bitech completed a total of 16 holes (6,700 ft) along a strike length of 410 ft at Nugget Pond. Analysis of stage one drilling resulted in a reserve estimate of 226,860 tonnes averaging 13.7 g (0.40 oz) gold per tonne in two parallel zones.
While still at the preliminary stage, the discovery remains open at depth and along strike. The follow-up drill program, currently under way, is designed to more fully explore the discovery at depth and along strike.
According to Bitech, metallurgical testing of core samples resulted in gold recoveries of 98% for the upper zone material, and 97.7% for the lower zone.
The company’s property interests in the area total 4,910 hectares in three groups, covering almost 15 km of strike length on both sides of the discovery.
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