Noranda, Akiko-Lori probe potential of Springpole bet

As Noranda (TSE) has deployed three drill rigs on the Springpole gold property in northwestern Ontario and has teamed up with Akiko-Lori Gold Resources (VSE) — a company controlled by well-known mining promotor Murray Pezim — investors begin to speculate that a significant gold deposit could be shaping up on that property. The Springpole joint venture, being explored by 50/50 partners Noranda and Akiko-Lori, is about 70 miles northeast of Red Lake, Ont.

Shares of Akiko-Lori, a junior exploration firm controlled by the Vancouver-based Prime Capital group, have doubled to more than $4 in active trading recently, up from a level of about $1.85 a month ago.

The 364-claim Springpole bet was optioned last year by Noranda and Akiko-Lori from Gold Fields Canadian Mining, a unit of Consolidated Gold Fields of London. That company had spent about $8 million exploring the area since 1985, and outlined a potential open pit gold deposit on the property’s main Portage zone.

Under terms of their venture agreement, Akiko-Lori and Noranda can earn up to a 70% interest in the Springpole property from Gold Fields by spending $20 million on the claims by March 31, 1997, and making a cash payment of $750,000 by March 31 this year.

Nearly 14,500 acres comprise the joint venture, at the north end of Springpole Lake, about halfway between the towns of Red Lake and Pickle Lake, Ont.

Although the property had remained largely idle during last year’s gold price slump, earlier work by Gold Fields had identified at least five significant gold zones, with the best intersection reported at 0.47 oz. gold per ton over 47 ft. in the main Portage zone.

That zone occurs partly under the waters of Springpole Lake and is in the central part of a 30-patented claim group that comprises the original Springpole property. Any future mining at the site could require a partial draining of part of Springpole Lake.

Trenches on the property have also yielded significant high-grade grab samples in the past with values reaching as high as 3.9 oz. gold per ton and 5.8 oz. gold in oxidized tuffs.

The original Springpole gold occurrences, first staked in the late 1920s, have been explored intermittently by various companies since that time.

The gold-bearing structures, which are not traditional quartz- vein type occurrences, are hosted by highly oxidized volcanic rocks that have been traced for a distance of more than a mile. The widespread mineralization occurs in several separate horizons across widths of up to 1,200 ft. Correlation of all the gold zones has proven difficult in the past, but the presence of widespread mineralization has offered encouragement to the partners.

Wide low-grade drill intersections averaging 0.05 oz. over 241-ft. intervals were reported recently by Noranda, operator of the Springpole gold project. Within that interval were sections grading 0.11 oz. over 51 ft. and 0.1 oz. over 18 ft.

Three drills are probing a previously known gold deposit called the Portage zone, between Birch and Springpole Lakes. Other recent results reported by Noranda from the Portage zone include intervals such as 109.2 ft. of 0.064 oz. in hole 126. Two other holes intersected 90.9 ft. grading 0.037 oz. and 61.1 ft. grading 0.031 oz.

According to John Harvey, president of exploration for Noranda, the current drilling program is designed to confirm and expand on the earlier work done by Gold Fields and test the deposit’s open pit potential. He said the gold mineralization occurs in deeply weathered and oxidized volcanics which are traversed by a major fault system in the area.

Gold Fields began work on the property five years ago and conducted considerable work including 125,816 ft. of drilling in 118 holes. Results reported previously from the Gold Fields work included 91.9 ft. of 0.28 oz., 34 ft. grading 0.19 oz. and 156 ft. grading 0.067 oz. in the Portage zone.

Noranda geologist Denis Francoeur said about 14,000 ft. will be drilled as part of the current phase- one program focusing on the Portage zone which, he says, is hosted by a major deformation structure crossing the patented claims. Funding for the current $570,000 drill program is being provided by flow- through share financing.

“It’s strictly an exploration bet at this time,” Francoeur told The Northern Miner. “One of our early objectives is to see if there might be enough tonnage to justify a possible open pit operation.”

Access to the Springpole property is provided by a winter ice road which extends from the former South Bay base metal mine site, about 25 miles to the south. Sources also told The Northern Miner that some claim-staking activity is under way in the area, but most of the region is already solidly staked.

Meanwhile, Akiko-Lori recently entered into a private placement agreement with CMP 1990 Resource Partnership for $750,000 in flow-through share funding. CMP will be providing $525,000 and Akiko-Lori will apply for the balance through the federal government’s CEIP grant system.