Three drills busy on Bitech’s Nugget Pond

Three drills are currently at work on Bitech’s Nugget Pond property near Betts Cove, Nfld., but despite its ambitious work program, Bitech’s share price has recently fallen to about $1.20. In February, when the company first announced it had signed a joint venture agreement with Placer Dome-controlled Equity Silver Mines (TSE), the share price was at about $2.25. The joint venture plans to spend some $12.2 million on exploration over four years, with Bitech receiving option payments of $12.3 million.

However, since the number of issued Bitech shares has increased to about 26 million (fully diluted), up from about 15 million at year- end, the per-share price may now be reflecting that dilution with total market capital (the number of shares outstanding times the price per share) remaining roughly the same. The company issued large quantities of its stock at low price levels during the early stages to acquire property around Nugget Pond.

A Bitech spokesman told The Northern Miner there are at least two reasons behind the recent softness in the company’s share price.

He said that a lot of investors were surprised to learn 26 million shares of Bitech have been issued, and he attributed some of the weakness to year-end selling by brokerage firms.

Rather than announce drill results on a hole-by-hole basis, the company has elected to release information in batches at 2-3 week intervals. Results announced last month still show a 50% hit rate in the recent drilling, although there were a number of subeconomic intervals encountered.

According to vice-president exploration Derek McBride, about 5,000 metres have been drilled to date, with about 15,000 m remaining in the current program.

Two machines are busy delineating the original discovery zone along strike and at depth, while a third machine will test for possible extensions to the east. Although spring thaw conditions could complicate access by a winter road, the company says it plans to keep exploration work moving ahead on schedule.

The company is trying to get a better understanding of the over- all shape of the deposit and determine its depth potential. On other areas of the large property, a number of promising geophysical anomalies have been detected and follow- up is planned.

While the company obtained some exciting results last year and continues to intersect impressive widths, the market has reacted negatively to the dilution factor, and this has led to the recent drop in Bitech’s share price.

With 15,000 m yet to be drilled and work programs scheduled for the adjacent Betts Cove and Tilt Cove properties, the speculative potential of the project appears to be significant. Bitech controls some 15 km of favorable strike length in the Nugget Pond area, and the project is still at an early stage. Government records indicate, for example, that appreciable gold was present in the copper ores of the past producing Tilt Cove mine, where some 42,000 oz of gold was extracted. Bitech will conduct a $150,000 exploration program on the Tilt Cove property.

]]>