Queries Sunburst President hopes for better days

I am writing to request some information on a company called Sunburst Exploration. When I last heard from them, they were involved with Soquem and Sullivan Mines in a joint venture property at Rouyn-Noranda, Que.

What became of the agreement and what is Sunburst doing at the moment, if anything? J.M., Lavaltrie, Que.

Since the shares are trading at around 14 cents on the Toronto Stock Exchange, 1988 is proving to be a fairly lean period in the life of Toronto-based Sunburst Exploration.

Former President Walter Davis was succeeded in October by Tor Jensen who runs the company from the Scarborough, Ont., offices of Mining Financial Services Inc. He can be reached at (416) 266-3341.

Jensen says he is trying to attract a joint venture partner to begin exploration at Sunburst’s wholly- owned Tribag mine property 60 miles north of Sault Ste. Marie, Ont. A former copper producer, the property contains some proven tungsten reserves, but Sunburst and its future partner will be looking for gold, Jensen says.

While Sunburst’s interest in a former producer called the Quesabe mine at Duprat Twp., Que., is somewhat diminished, it is still involved with partners Sullivan Mines Inc. (which merged with Cambior Inc. last September) and Soquem.

Between 1949 and 1952, the Quesabe mine produced 100,000 tons of ore grading 0.30 oz gold per ton. According to engineering reports, reserves in 1983 stood at 225,000 tons grading 0.30 oz (cut).

The property contained two shafts with five levels established down to 1,000 ft. Cease trading

Back in 1980, Sunburst faced an Ontario Securities Commission cease trading order (it was later postponed) and criticism from shareholders for alleged failure to perform required exploration.

However, an option agreement signed in January, 1983, allowed Sullivan and Soquem the right to a 50% interest in the gold-silver- copper mine.

Under the agreement, Sullivan and Soquem paid Sunburst $50,000 for 100,000 Sunburst shares and were required to make similar annual payments of $50,000 for shares at 75 cents per share in the second year and $1 per share in the third year.

As reported (N.M., July 21/83), the agreement required Sullivan and Soquem to spend $150,000 in exploration and development during the first year, $300,000 within two years and $500,000 by year three.

On Jan 27, 1987, Sunburst restructured its participation at Duprat by converting its 50% ownership to a royalty interest equivalent to the greater of a 1% net smelter return and a 5% net profit interest.

As part of the agreement, Cambior will subscribe for 150,000 Sunburst shares at $1 per share over a 2-year period. “With our shares trading at 14 cents we couldn’t afford to raise the cash needed for exploration at the project, so we had to protect our interest,” said Jensen.

According to Michel Drouin, Cambior’s exploration director, the project has been placed on ice for the past two years but the company may take a look at it again later this year.