Ownership of top gold mine still awaits court’s decision

Information about the mine is contained in the 1988 annual report of Corona Corp. (TSE), which was awarded ownership of the property in 1986 by the Supreme Court of Ontario. LAC Minerals (TSE), which brought the mine into production, has appealed that decision to the Supreme Court of Canada, which heard the case last October but has yet to make a ruling.

According to Corona (LAC provides no data in its 1988 annual report), the lower B zone of the property has become the major source of ore. The initial A zone open pit was mined for about a year, until July, 1986. Another deposit, the C zone, lying to the west of the A and B zones, is in the exploration stage and open at depth.

The Williams mill began operation in December, 1985, with a design capacity of 3,300 tons per day. During the second half of 1988, that capacity was doubled, to 6,600 tons. Full production at the new rate is expected to be reached this spring. Mining method

The mining method being used at Williams is longhole open stoping with rock cemented backfill. Workers at the property numbered 533 at the end of 1988, not including 167 contract employees.

Proven and probable reserves at the end of 1988 stood at 37.5 million tons grading 0.18 oz gold per ton, that tonnage considered sufficient for at least a 16-year mine life at currently planned rates. Possible reserves stand at 9.7 million tons grading 0.12 oz.

Exploration drifting from the 9175 ft. level is taking place to permit the lower west extension of the B zone to be drilled.

It is estimated the Williams mine will turn out 490,000 oz this year at a direct operating cost of about $190(US) per oz (compared with $205 in 1988).

LAC continues to operate the mine according to a 5-year mining plan under the direction of a management committee composed of one LAC nominee, one Corona nominee and a third party agreed upon by both companies.

Should the final court decision go in Corona’s favor, Corona has already agreed to a 50/50 joint- venture arrangement for the operation of the Williams mine with Teck Corp. (TSE). Corona and Teck are partners in the producing David Bell mine at Hemlo.

LAC legal counsel John Pennal confirmed at the recent LAC annual meeting that his client and Corona have talked in the past regarding the mine, but he said no discussions are currently under way.

In its 1986 ruling, the Supreme Court of Ontario awarded the mine to Corona (then known as International Corona Resources) upon payment to LAC of $154 million, that sum having since grown with interest to more than $200 million.

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