NEWS ROUNDUP (September 09, 1991)

Craibbe-Fletcher Gold Mines (CDN) says it has almost completed rehabilitation work at the 2,000-ft. level of the company’s property, and should be drilling there by the end of September.

The underground work is part of a $500,000 exploration program designed to test possible extensions of Placer Dome’s (TSE) Campbell gold mine, which adjoins the Craibbe property to the east. Placer has a 51.2% interest in Craibbe.

Craibbe plans to drill six holes (10,200 ft.) to examine a zone of gold mineralization identified at surface in 1984. An additional 14 holes (2,300 ft.) will test other targets in the vicinity of the exploration drift. The Craibbe workings were established during 1958-1961 from the 14th level of the Campbell mine.

A demand notice was issued by an Australian bank relating to a loan of $3.6 million plus interest of $1.79 million owed by City Resources Canada to a related company, City Resources Pacific of Western Australia.

In mid-August, the Australian bank issued a demand notice to City Pacific, a wholly owned subsidiary of City Resources, for the immediate repayment of all monies owed under the loan agreement. The funds advanced by City Pacific to City Canada were drawn under a facility provided to City Resources by the Australian bank.

City Canada issued a release stating they do not believe that City Pacific will be requested to seek a repayment of its principal and interest loan to City Canada, “as discussions are continuing on a restructuring proposal with the Australian bank and City Canada.”

Toronto-based Brascan Ltd. has increased its indirect interest in Noranda (TSE) by dealing off Noranda shares.

Brascan reported exchanging 4.1 million shares of Noranda for a 15% common-share interest in Brascade Resources owned by the Caisse de depot et placement du Quebec.

Brascan now owns all of the common shares (99.9%) and 26.3% of the preferred shares of Brascade. Combining Brascade’s approximate 36% interest in Noranda with Brascan’s 14% interest in Noranda, Brascan’s effective ownership of Noranda has increased overall by about 3% to 50%.

Through the same transaction, Brascan increased its effective ownership in mining company Westmin Resources (TSE) by 11% to 74%.

Brascan, part of the Toronto Bronfman group of companies, said it intends to continue operating Brascade as a separate financing company owning interests in Noranda and Westmin.

Low zinc and lead prices may force Equinox Resources (TSE) to suspend operations at its 60% owned Van Stone zinc-lead mine in northeastern Washington state.

The company plans to halt open pit mining in September and utilize a 100,000-ton low-grade stockpile for mill feed in order to conserve ore reserves.

Proven-minable plus probable open pit reserves prior to startup were estimated at 739,000 tons grading 4.75% zinc and 1.1% lead. Open pit and underground reserves total 2.5 million tons grading 5.66% zinc and 1.1% lead. The Van Stone mine started operations earlier this year and has been operating at approximately break-even, according to the company. From April through to Aug. 20, 153,957 tons of ore were mined and 92,055 tons of ore were milled at an average head grade of 1.25% lead and 3.30% zinc. Equinox noted that zinc and lead prices have fallen to US47 cents and US24 cents per lb. respectively from US82 cents and US38 cents in mid-1990. After September the company plans to make a decision on whether to continue milling stockpiled ore, suspend operations, or maintain full-scale milling and mining.

Working with a major international producer and marketer of pigments, Stewart Lake Resources (TSE) says it plans to complete a feasibility study for the production of iron pigments from the open pit Kremikovtsi deposit northeast of Sofia, Bulgaria.

While Stewart compiles ore reserve calculations for the project, a bulk sample of more than 30 tons of iron oxide is making its way to the U.S. Stewart says the deposit is geologically unique in that it displays a minimum of four basic colors — red, brown, black and ochre. A much broader range of shades could be produced through blending.

Meanwhile, Stewart is trying to secure environmental clearance for production at its Kirkham graphite property in Bedford Twp., Ont. The property hosts minable reserves of more than one million tons averaging 8.61% graphitic carbon and could support a production rate of 9,000 tons per year.

A recent fire caused an approximate $1 million in damage to a secondary crushing unit at Noranda’s (TSE) 16,500-tonne-per-day Bell mine near Granisle, B.C.

The fire occurred on Aug. 22. A company spokesman, however, said the operation had resumed about 40% of its production by Aug. 24. A portable crusher, which is being installed, should boost production capability to 80-90% shortly.

The Bell open pit mine produces copper, and some gold and silver. The operation is scheduled for closure in 1992.