U.S. REPORT (October 07, 1991)

Copper oxide specialist Arimetco International (TSE) is teaming up with Holcorp Mines (CDN) to acquire a 100% interest in 305 unpatented mining claims located beside Arimetco’s Yerrington mine in Lyon Cty., Nev.

Known as the MacArthur property, the claims contain a copper deposit with proven reserves of 40 million tons grading 0.22% copper per ton (including a high-grade open pit with 8.3 million tons of 0.43% copper).

Arimetco and Holcorp will each hold a 50% stake in the property after paying Timberline Minerals of Reno, Nev., US$1.9 million cash over seven months. As the property is fully permitted for commercial production, the joint venture is planning to begin mining as soon as possible.

Under a development agreement with Holcorp, Arimetco will treat any ore mined from the 6,100-acre MacArthur property in a new 60,000-lb.-per-day solvent extraction electrowinning (SX-EW) plant at the Yerington mine. The joint venture expects to produce about 25,000-30,000 lb. daily of cathode copper at McArthur by leaching ore on two new leach pads and pumping pregnant solutions to the SX-EW plant at Yerington.

Under the agreement, Holcorp will finance construction of the leach pads while Arimetco assumes responsibility for marketing copper extracted from MacArthur. Holcorp recently agreed to pay Arimetco US$3.75 million for the Emerald Isle copper deposit in Arizona which hosts 6.4 million tons of 0.42% copper. Holcorp, whose board includes Crown Butte Resources (TSE) President Dave Rovig and financier Murray Sinclair, is a former shell company set up to take advantage of “special mining situations in the U.S.”

Drilling on the Rosebud property in Nevada continues to return what 49% owner Equinox Resources (TSE) describes as excellent gold values although the investors appear unimpressed.

LAC Minerals (TSE), 51% owner and operator of the joint venture, released a number of final assays from both the Dozer Hill zone and the East zone. Infill drilling on the Dozer Hill zone included a 30-ft. intersection grading 0.85 oz. gold per ton. Preliminary reserves on the zone were last estimated at 5.2 million tons grading 0.12 oz. gold. An es-timated 45% of this reserve is located on 100% owned LAC ground to the north.

LAC’s drilling indicates the East zone, originally discovered about 1,000 ft. to the east of the Dozer Hill zone, extends up to the northwest on to 100% owned LAC ground. The zone then hooks down to join up with the north end of the Dozer Hill.

Drilling results from the East zone included a 105-ft. intersection in hole 187 grading 0.34 oz. gold and 0.65 oz. silver and a 60-ft. intersection in hole 186 grading 0.23 oz. gold and 0.50 oz. silver.

Two stepout holes about 700 ft. to the east of the East zone each intersected 15 ft. grading 0.24 oz. gold and 0.33 oz. gold respectively. The two holes are spaced about 300 ft. apart in the north-south direction. John Wright, operations manager for Equinox, noted that it is too early to determine if the intersections represent a new zone or an extension of the East zone. He added that exploration is difficult on the property since the mineralization is essentially “blind” with no outcrop.

A number of other holes in the East zone intersected 5-40 ft. grading from 0.10 to 0.15 oz. gold.

LAC has not released assay results from drilling on its wholly owned ground to the northwest.

The market reacted poorly to the drilling results which are generally lower grade than the original discovery holes in the East zone. The discovery holes, drilled earlier this year, inter-sected 40 ft. grading 1.15 oz. gold and 2.37 oz. silver in one hole and 30 ft. grading 1.89 oz. gold in a second hole.

Following the release of the results Equinox slipped about 50 cents to the $1.75 level by Sept. 24.

Drilling will continue to at least mid-October and LAC has initiated hydrological studies to enable planning and permitting of further exploration activities including potential underground exploration next year.

Drilling on the New World project in Park Cty., Mont., continues to expand the size of the Homestake deposit.

The property is 100% owned by Crown Butte Resources (TSE). A unit of Hemlo Gold Mines (TSE) owns 60% of Crown Butte’s outstanding shares. The Homestake deposit is one of a number of deposits on the New World property. Prior to beginning the 1991 program, preliminary reserves on the Homestake were estimated at 2.66 million tons grading 0.19 oz. gold and 0.52 oz. silver per ton plus 0.54% copper.

Although a somewhat simplified description, the deposit varies between 200 ft. and 400 ft. in thickness and measured about 400×700 ft. prior to this year’s stepout drilling.

Stepout delineation drilling over the year has expanded the size of the deposit significantly and only the northwestern edge of the deposit is cut-off.

Twenty-two holes were completed during the year on the deposit. Hole 91-765, drilled 150 ft. northeast of hole 91-691C, intersected 60 ft. grading 0.27 oz. gold. Hole 91-691C, released earlier this year, intersected 89.5 ft. grading 0.24 oz. gold.

On the east side, a 100-ft. stepout (91-698C) encountered 198.2 ft. grading 0.17 oz. gold. Hole 91-741, an angle hole drilled to the southeast, intersected two zones. The first 25-ft. intersection, about 100 ft. from 90-583, graded 0.38 oz. gold while the second intersection, about 200 ft. out, returned 70 ft. grading 0.14 oz. gold.

To the west, 100-ft. stepout hole 91-711C intersected 58 ft. grading 0.14 oz. gold.

All intervals grading above 1.0 oz. gold have been cut to 1.0 oz. Assays on a number of other holes which Crown Butte described as containing “thick and significantly mineralized intersections” are still pending. Only three infill holes remain to be drilled on the Miller Creek deposit which has now been delineated and largely defined.

Crown Butte also reports a new discovery on the property. The company reports significant copper-gold mineralization was intersected in deep drilling on the Homestake stock, west of the Homestake breccia pipe.

Hole 91-712C intersected a porphyry copper-gold system at a depth of about 1,250 ft. The zone, from 1,250 to 2,000 ft. is described as pyrite-rich with weak gold mineralization. Final assays are pending.

A 10-hole drill program is set to begin shortly on the Buck property 80 miles southwest of Boise, Idaho.

Teck (TSE) can earn a 60% interest in the property from Carlin Gold (ASE) and Redfern Resources (TSE) by spending a total of US$2 million over the next six years. If Teck completes the earn-in, Carlin will own 26% of the project while Redfern will hold the balance.

Geologic mapping and geochemical sampling as well as airborne magnetic and resistivity surveys were completed on the property. This work outlined a number of gold anomalies.

William Long, president of Carlin, said Teck will concentrate their drilling primarily on one specific target. He added that footage is expected to total about 5,000 ft.

Growth of the U.S. market for zinc fertilizer materials in the next five years is expected to be at a slightly higher rate than growth of the overall fertilizer market, says a new report.

Regional Markets for Zinc Fertilizers in the United States is the latest in a series of studies of agricultural minerals issued by Whitney & Whitney, management consultants and materials specialists based in Reno, Nev. The use of zinc fertilizer materials in the U.S. is restricted to a relatively small proportion of farm land. Ten states — California, Nebraska, Idaho, Washington, Colorado, Kansas, Texas, Iowa, Michigan and Minnesota — account for 85% of total domestic consumption.

Within these states, use is most frequently associated with calcareous soils, soils low in organic matter and soils that have been “scalped” by land-levelling or erosion.

The study, which is to a large extent based on the results of a survey of agronomists and soil scientists, contains estimates of market share for the alternative sources of zinc: granular zinc sulphate, zinc sulphate solution, zinc oxide, zinc chelates and ammoniated zinc. It also provides state-by-state estimates of the percentage of zinc applied to soils and the percentage applied foliarly.

In addition to the market analysis of zinc fertilizer materials, the report has a section dealing with the economics of zinc, including data on world consumption, mine production and metal production and a brief review of processing technologies.

Drilling on the Golden Quail property in San Bernardino Cty., Calif., about 12 miles west of Viceroy’s Castle Mountain project, prompts Golden Hemlock (VSE) to predict a reserve increase.

Golden Hemlock is earning a 50% interest in the property from Golden Quail Resources (VSE) by spending a total of US$1.5 million by the end of 1993. The company initiated a 13,000-ft. drilling program earlier this year, 8,000 ft. of which is complete.

Preliminary estimates of reserve were last stated at 2.5 million tons grading 0.077 oz. gold per ton.

Thirteen holes have been completed in the current drilling program; 11 reverse circulation holes and two core holes. Colin Redden, project manager, said the remaining seven drill holes in the program should be completed within two weeks and a new reserve estimate will be made at that time. As a result of the drilling, the mineralized zone has been extended to a total strike length of over 1,000 ft. from a strike length of about 600 ft. The mineralized zone, a series of multiple shear structures, is about 100 ft. thick and appears to plunge to the south.

The company expects to receive permits shortly for a second phase of drilling budgeted at up to US$500,000. The program will include testing the strike extent to the south as well as a geophysical program and drilling to test for parallel zones to the west.

Golden Hemlock has spent about US$250,000 on the property to date and currently has about US$100,000 in working capital.

Results from recent drilling are as follows:

Hole Interval Width Gold

(ft.) (ft.) (oz./ton)

GQ-91-1 325-410 85 0.070

GQ-91-2 did not intersect zone

GQ-91-3 310-460 150 0.022

GQ-91-4 450-550 100 0.040

585-600 15 0.060

GQ-91-5 370-390 20 0.020

405-415 10 0.013

GQ-91-6 190-220 30 0.024

240-245 5 0.070

GQ-91-7 0-105 105 0.057

GQ-91-8 460-530 70 0.24

625-635 10 0.064

GQ-91-9 assays pending

GQ-91-10 465-515 50 0.040

625-635 10 0.17

GQ-91-11 assays pending

GQ-91-12 290-375 85 0.15

The recent acquisition of Judith Gold will give Crown Resources (VSE) an additional 2,500 oz. of gold production per year for at least the next four years.

Shareholders of the two companies voted in favor of the deal in late September and as a result, each Judith holder will receive one share of Crown for each 25 shares held.

Crown will issue a total of about 300,000 shares under the deal. The yearly production represents a 5% net smelter royalty on the Kendall heap-leach open pit mine in Montana. The mine is owned 60% by Addwest Gold and 40% by Canyon Resources.

In addition to the yearly production, which is received at no cost, Crown will own over 3,800 oz. of gold bullion currently held in inventory by Judith.