Query Golden Hope not pure gold playr

I purchased Golden Hope stock at $3 per share. Do you expect the sha re price to eventually rise? J.A., Belleville, Ont.

Of course, all investors hope that the price of any shares they purchased will skyrocket the minute they hang up the phone from their broker. But alas, as some have learned the hard way, that’s not always the case.

Space does not allow us to go into all the ins-and-outs that may affect the performance of any stock and it is not our role to offer advice. What we can do, however, is to bring you up-to-date on the activities of Golden Hope Resources.

Of course this company is a 20% partner in the Estrades property in the hot Casa Berardi camp in northwestern Quebec. Other partners in the property are Golden Group Explorations with a 30% interest and Teck Corporation with a 50% interest. Teck is also the operator.

This past summer Teck released initial reserve calculations based on more than 70 drill holes put down on the property since November, 1985. These indicate almost 2.6 million tons of geological reserves outlined averaging 0.385 oz gold equivalent per ton in three zones.

Silver, copper, lead and zinc grades are incorporated in this average grade on a gold equivalent basis even though it is not clear that all the metals would be recovered economically. The 1% lead grade, for instance, reported in the main zone may act as a cost deterrent in a conceivable milling operation. But grades of other base metals appear mineable based on current metals prices.

Unlike the Golden Pond deposit, (Golden Knight Resources 40% and Inco Ltd. 60%), the Estrades is not a pure gold play. The Golden Pond deposit, located 9 km to the west, hosts reserves of more than 6 million tons grading 0.255 oz gold per ton.

Another point about the Estrades deposit is that it has widths of 15-25 ft and so will probably not be mined with large-scale low-cost bulk mining methods common in most of the country’s base metals camps. Analysts are suggesting mining costs could be in the $75- $100 per ton range. Most bulk mining methods average $30-$50 per ton.

Further surface exploration work is scheduled for the Estrades on a program designed to expand the zones along strike and at depth.

At last look Golden Hope was trading at $3.20 on the Vancouver Stock Exchange.