Regal buys into Maritime gold project

Toronto-based Regal Goldfields (REGL-C) can earn a 75.5% interest in the Touquoy gold project 60 km northeast of Halifax.

Work to date by project vendor Moose River Resources has defined an indicated resource of 3.8 million tonnes grading 2.22 grams gold per tonne, equivalent to 274,000 contained ounces gold, as well as an inferred resource of 1.9 million tonnes at 2.15 grams gold, equivalent to 131,000 contained ounces gold.

Regal believes there is potential over the 8-km length of the property to more than double these resources.

Watts Griffis & McOuat estimates that with the expenditure of $325,000, the grade probably can be increased by 20% and that the resource can be upgraded to a proven and probable reserve. A feasibility study would then be warranted, Regal says.

Prior to the late 1980s, exploration and small-scale mining on the Touquoy property was focused on narrow, high-grade quartz-vein-hosted gold mineralization. In the late 1980s, drilling by others and subsequently by Moose River discovered the presence of wide zones of disseminated gold mineralization hosted in a 150-metre-thick stratigraphic interval. The mineralization occurs largely as native gold in argillite host rocks.

The agreement calls for Regal to pay $40,000 in cash to Moose River (already paid) and issue 1.1 million treasury shares, or cash equivalent, by Feb. 28, 1999.

By the end of three years, Regal expects to have spent $1.4 million on exploration. Regal would then form a joint venture with Moose River on a 70-30 basis.