Orex has two-phase plan for Goldboro development

In the midst of an underground 99-hole drilling program, Exploration Orex (ME) is confident the results will allow it to continue its 2-phase program to bring its Goldboro gold project in Nova Scotia into production in 1991.

Forty of the holes have been completed and assays from those holes are expected in the near future, Vice-President Michel Roy said in Toronto at a company information meeting. The fan-drilling is being performed from the 250-ft. level, which is also undergoing drifting work.

First phase of the development program will involve underground production, using the long-hole method, from an area near the access ramp; cost to bring that portion of the property into production is estimated to be $15 million. The second phase will involve an open pit operation.

Hoping to enter production in reasonably quick time (in order to generate short-term profits), Orex outlined a block of reserves in the area of the access ramp containing (in the probable category) 1.18 million tons grading 0.18 oz. gold per ton. The block, which has undergone previous exploration, is intersected by two crosscut levels at 125 ft. and 250 ft. It is this area which is being drilled.

Planned is a mill capable of processing about 1,100 tons of ore per day. Cost to construct the mill and tailings pond is estimated to be $10 million, while the underground preparation will cost about $5 million. The company hopes to raise the $15 million through debt financing.

Scheduled for startup this year is a feasibility study on the program’s second phase; the study may take until 1992 to complete. Orex considers an open pit operation to be the ideal method for mining the entire Goldboro deposit. Preliminary property reserves stand at about 15 million tons averaging 0.12 oz.

Envisaged is a mill capable of treating 5,000 tons of ore per day, the milling facility to cost an estimated $65 million. Current planning has the open pit phase in production in 1994.

Orex recently completed a $6- million financing, the proceeds being used in part to pay for the current drilling program. The company is also continuing to buy out its partner in the Goldboro project, Onitap Resources, to acquire a 100% interest in the property. Orex agreed to pay Onitap $8 million over four years; the balance owed to date stands at $7 million, with the next payment due July 1.