Nuinsco’s Hume a believer

Nuinsco Resources (TSE) President Doug Hume remains doggedly determined that his company’s Cameron Lake gold project in northwestern Ontario will even tually be a mine.

After a number of setbacks, including a lawsuit launched by Nuinsco’s former controlling shareholder Echo Bay Mines (TSE), gold prices are riding in the company’s favor and Hume believes the property could be in production by year-end.

In the 14 months since Echo Bay sold its 53.8% stake in Nuinsco to Deak International Resources (TSE), an exploration drive led by Chairman Malcolm Slack has placed 3.1 million tons of grade 0.17 oz. gold per ton on the proven, probable and possible category.

According to consulting geologists Watts, Griffis and McOuat, the deposit is fully open along strike and downdip below 2,600 ft.

All that stands between Nuinsco and a production decision is the approximately $22.7 million in capital costs needed to bring the project on stream at a rate of 750 tons per day, according to Hume.

That figure would be sufficient to cover a power line and a 1,000- ton-per-day mill.

“We are counting on the surge in the market price for gold to attract the financing to put the project into production,” said Hume. He believes that a modest profit could be achieved at a gold price of US$365 per oz. Recently, the yellow metal was trading at US$414.50.

According to a Watts, Griffis McOuat engineering report, the Cameron Lake deposit could be mined predominantly via bulk mining methods with a small number of narrow zones by shrinkage stoping.

A small open pit could also be developed to mine several veins exposed at surface, adds the report, which estimates operating costs to be $42.29 per ton of ore mined and milled or approximately US$250 per oz. of gold produced.

While Nuinsco is being sued by Echo Bay for management and services allegedly provided by the latter company while it was operating a $6-million exploration program at Cameron Lake, Hume said he hopes the matter can be cleared up in a civilized manner.

Nuinsco has launched a $2.5- million countersuit (T.N.M., Jan. 8/90), claiming repayment of all monies that Nuinsco says it paid to Echo Bay and wholly owned subsidiary Zanford Mining Services.