Zenmac says new zinc mine can be nothing but winner

The highest grade zinc mine in the country, the Winston Lake operation at Schreiber which came into production early this year, “can be nothing but a winner,” H. A. Pearson, P.Eng., president of Zenmac Zinc (ASE) told a large gathering of shareholders at the company’s annual meeting here.

This is the mine that was brought into production by Minnova Inc. (TSE) early this year at a cost of some $75 million under an agreement with Zenmac that is now under legal dispute before the Supreme Court of Ontario. This action will be “vigorously prosecuted” by Zenmac, Pearson said.

Mineral inventory at the mine, the meeting was told, stands at 3,415,000 tons with an over-all grade of 1.0% copper, 15.9% zinc, 0.96 oz silver and 0.03 oz gold, including 615,000 tons grading 1.3% copper, 27.77% zinc and 0.06 oz gold. These figures are after a 20% dilution factor of zero grade.

During the first quarter of 1988 33,425 tonnes of ore were hoisted with an average grade of 0.70% copper and 19.25% zinc.

The mill started producing Jan 15 and in the quarter turned out 10,23l tons of concentrate, the first of which was shipped to Schreiber on Jan 20, the meeting was told.

Zenmac’s other main interest is its holding of 1,309,192 shares or 16.4% of Madeleine Mines. This gives it an indirect interest in the Boise-Madeleine joint venture gold project at Kenora which Pearson said “looks like a real winner.”

Ramping here has opened a length of over 400 ft with a cut grade of 0.40 oz across 5 ft, including a very high grade central core that has been cut to 1 oz. Surface drilling indicates that this will extend for at least 1,200 ft.

Some consideration is already being given to reopening and shipping ore to the mill at Consolidated Maybrun Mines, an associated company that owns 426,000 shares of Zenmac. This is a 500-ton plant located 65 miles away but now accessible by good highway. Other exploration activities

Zenmac can earn a 50% participating interest in a 61-claim zinc prospect which it holds under option from Eldor Resources, 25 miles southeast of the Winston Lake deposit. There are eight known geophysical conductors with associated zinc geochemical anomalies.

Drilling on one of these conductors several years ago returned 4.27% zinc across 41 ft while a second hole cut 99 ft grading 6.6% Three readily accessible but lesser anomalies were drilled this past winter but found to be graphite conductors. Further work is planned along the 5-mile strike of this property.