Queries Arctic land holding makes Borealis Exploration worth

Borealis Exploration owns a substantial interest in both Noble Peak Resources and Faraway Gold Mines. Much has been happening with Borealis, although it appears to never receive any mention in your newspaper. On the other hand, Noble Peak and Faraway do get covered regularly. I would like to hear more about this company. A.P., Camp Sherman, Or.

Judging by Borealis Explorations’ current share price — it traded recently on the Alberta Stock Exchange at $18.88, — this company is worth keeping an eye on.

However, it is important to note that the shares have traded high because they remain tightly held within the company. Only about 2 1/2 million shares are currently outstanding.

Other Alberta listed companies with properties in similar stages of development generally trade at $2 or less.

While Borealis’ share price has remained in the $20 range during the past 12 months, the company claims that its lack of size has prevented it from becoming a producer.

However, there is nothing small about 1.3 million acres of Arctic land holdings. The company also holds an arsenopyrite structure which Borealis says contains mineable deposits of gold stretching for 33 miles.

New ground was acquired on the Melville Peninsula and in the Keewatin region of Canada’s eastern Arctic in March, 1985.

This 50,000-acre property was the subject of detailed geological mapping, prospecting and rock geochemistry and detailed ground geophysical surveys conducted six months later.

As reported (N.M., Sept 23/85), grab and chip samples yielded high gold values associated with quartz calcite impregnations in a series of breccia zones.

Under the terms of a March, 1986, agreement, Noble Peak Resources acquired a land position relative to Borealis’ gold discoveries in the Keewatin district in the Northwest Territories.

Noble Peak was scheduled to bear 100% of the costs of exploration and development to production to earn a 50% interest before payout. After payout the working interest shall be 40% Noble Peak, 60% Borealis. Under the agreeme nt, after Noble peak had spent $250,000 in year one, $500,000 in year two and $750,000 in year three, a production decision was scheduled to be made.

Surface gold showings were reported in May, 1986, with samples assaying as high as 6.71 oz gold per ton.

Elsewhere, the company’s most promising property appears to be at Fat Lake (also in Keewatin) where a 100-ton-per-day mill is currently conducting bulk testing to determine if a small open pit operation is feasible.

According to a recent report, a decline shaft has reached the ore zone and drifted down the vein. However, Chairman Rodney Cox steadfastly refuses to give any reserves from this property. He says establishing reserves on vein-type deposits are too strict under current Ontario Securities Commission requirements.

However, a test operation this year will produce about 20,000 tons of ore and/or 20,000 oz gold this year, he says. “We are driven to make this company cash flow positive by this time next year,” said Cox.

“Additional mill feed will also come from properties that lie within a 5-km circle of the of the Fat Lake property which is accessible by sea,” he said.

Borealis also has permits on about 130,000 acres of pyrite-rich material and gold bearing conglomerates in the Padlei area near Herik Lake.

According to Borealis, the geological setting of these conglomerates is similar to the gold and uranium producing paleoplacer deposits of the Witwatersrand in South Africa.

Borealis has entered into an agreement with Anglovaal Ltd. of Johannesburg for a joint assessment and evaluation of the gold potential there in 1988.