U.S. REPORT (October 14, 1991)

With the first phase of this year’s drilling now complete, partners Arizona Star (VSE) and Glamis Gold (TSE) expect to start a second-phase program shortly on the Imperial County joint venture in southeastern California.

Arizona Star, the operator of the joint venture, earned a 35% interest in the property from Glamis last year.

The companies completed 17,195 ft. of drilling in the first phase, including both infill and stepout holes on two deposits. Although details of the results have not been released, the partners expect reserves on the property to increase as a result of the drilling.

Prior to beginning this year’s program, preliminary reserves on the two deposits stood at 12.7 million tons grading 0.026 oz. gold per ton. The Ocotillo is estimated to have a preliminary reserve of about 7.5 million tons grading 0.028 oz. gold, while the Indian Rose deposit, about 3,000 ft. to the northwest, has a minable reserve of 5.2 million tons grading 0.023 oz. gold with a strip ratio of about 2.6-to-1.

Arizona Star expects to release a new reserve calculation within a few weeks. The second phase of drilling will include both infill and stepout holes and is expected to total 30,000 ft. in 60 holes.

About 36% of Arizona Star’s 12.3 million shares are owned by Bema Gold (TSE). The company has no debt and has about $600,000 in working capital.

Recent drilling on the Gibbs property in Mariposa Cty., Calif., is confirming high-grade values for owners, Dessir Resources (VSE) and A.T.& E. Mining.

Dessir is earning a 50% interest in the property by spending a total of US$1.4 million by Nov. 18. The company has spent about US$900,000 to date, according to director Robert Foo.

A limited amount of underground development on the former producer has outlined a reserve of 121,000 tons grading 0.86 oz. gold per ton. The mine operated in the late 1800s and early 1900s, producing an estimated 50,000 tons grading in the order of 1.0 oz. gold.

Dessir is attempting to prove up and increase the reserve with its current drilling program which includes seven holes. Assay results from four holes have been released with the best returning 0.87 oz. gold over 25 ft. An additional nine holes have been completed on the Marla-Jean vein, a structure parallel to the Sally-Anne vein in the Gibbs mine. Assays from the Marla-Jean drilling have not been released.

Dessir is in the process of completing a 300,000-unit private placement priced at $2 per unit. The units include one share plus one warrant to purchase an additional share at $2.50 for one year.

Foo said the placement is about half-complete, and referring to the current share price of about $2.80, he expects the balance to be completed shortly.

Drilling is expected to begin in late October on the Middlemarch project in Cochise Cty., Ariz.

Toltec Resources (VSE) is earning a 60% interest in the property from West Pride Industries (VSE) by spending US$2.1 million over the next three years. The option was originally held by Asiatel Media, but was subsequently transferred to Toltec.

Toltec completed a preliminary sampling program in August which identified a number of priority targets on the property.

Drilling sites were selected on three of the targets; including the Cobre Loma-Missouri trend, the Missouri IP anomaly, and the China Peak area. Sampling in an old pit on the Cobre Loma-Missouri trend returned 3.4% copper, 12% zinc, and 1.2 oz. silver per ton across 25 ft. In addition, underground sampling in old workings returned an average of 4.2% copper, 0.56 oz. silver and 0.44 oz. gold across 8 ft.

The Missouri IP anomaly is located immediately to the east of this and has been traced over a strike length of 3,600 ft. remaining open in both directions.

The third drill-target is the China Peak area where recent sampling by Toltec returned grab samples grading up to 16.95% zinc, 12.9% lead, 0.55% copper and 11.6 oz. silver.

Toltec is in the process of permitting the drilling program and plans to begin detailed mapping and orientation geophysical surveys shortly in a number of other areas in order to identify further drill targets.

The Colorado Geological Survey recently announced the publication of Gold Occurrences of Colorado. This comprehensive volume is an invaluable tool to the explorationist, researcher, or anyone interested in the state’s gold deposits.

The soft-bound, 100-page publication discusses recent information on Colorado’s better-known gold deposits, and includes details of more recently described occurrences including hot-spring and detachment-fault-related gold. Gold-bearing massive sulphide deposits, some of which indicate a submarine exhalative origin, are also discussed.

Gold Occurrences of Colorado, by Mark Davis and Randall Streufert. Available from the Colorado Geological Survey, 1313 Sherman St., Room 715, Denver, Colo., 80203. US$12 (plus US$3.50 shipping and handling).