Newly launched Bema Gold plans heap leach production in `89

Before the October, 1987, market crash, many junior companies were motivated for a variety of reasons to create and launch subsidiary or associated companies. Under present conditions, however, this trend has reversed itself and a good many appear to be finding their way back to the mother-ship, to be consolidated, amalgamated and launched as a single entity “greater than the sum of all its parts.”

Such is the case with Amir Mines (VSE), Normine Resources (VSE) and Bema International Resources (VSE), all created and managed by the Bema Consulting Group of Vancouver, B.C. The recent amalgamation of the three companies into a new entity, Bema Gold Corp., is viewed by management as a way to streamline administrative costs, reduce the complexity of the interrelated companies and projects to investors, and facilitate the raising of equity financing in these tougher times.

Bema Gold is expected to begin trading on the Toronto and Vancouver Stock exchanges in early December and will have about 18.5 million shares outstanding, no debt and $3 million in working capital.

Outside of the Harrison Lake gold project in British Columbia, the company’s main properties are in the United State and will be overseen by Dr Barry Rayment, a geologist, director, and new president of Bema Gold’s wholly-owned subsidiary, Bema Gold (US), based in Reno, Nev.

The most advanced of these are operated by 85%-owned Idaho Gold Corp., created in 1987 by Amir, Normine and Glamis Gold (TSE) to jointly develop a number of properties in Idaho. The Champagne mine project near Arco is expected to begin production by mid-1989 with a start-up reserve of 2.5 million tons grading 0.04 oz per ton gold equivalent (total reserve potential is 5-6 million tons at a similar grade). About 17,500 oz are targeted to be produced in 1989 at a cost of $137(US) per oz, to rise to 19,000 oz in 1990 and 1991, at a cost of $185 per oz.

Rayment said the mineralization is on, or near surface and the waste to ore ratio should average well below 1:1 over the mine life. The project is now in test heap leach production with drippers (which can be buried in ore) used instead of sprinklers to enable year round production. Because of the high silver content, a Merrill-Crowe test plant is being used, which Rayment said “worked right off and required no tune-up phase” to meet projected recoveries of 75% for gold and 50% for silver. Once commercial production begins, a 3-month payback of capital costs is estimated.

The company has three other advanced heap leach prospects; the Buffalo Gulch, Erickson Reef, and the Friday project, all located in a mineralized trend near Elk City, in northern Idaho. The Buffalo Gulch project, with reserves of 5 million tons at 0.03 oz gold, is now in the permitting stage and expected to be brought on stream in 1990. The company says metallurgical testing indicates 80% recoveries with an extremely short leach cycle. No blasting or crushing is required and the low cost, seasonal operation is expected to produce about 13,000 oz in its first full year.

The Erickson Reef mine is also in the permitting stage for a 1990 start-up (about 10,000 oz per year), to be followed in 1991 by the Friday mine. In contrast to Buffalo Gulch, these projects are in shattered schists and gneisses and will require no agglomerating.

Bema Gold is also acquiring a 35% interest from Glamis Gold in 2,000 claims located in Imperial County, Ca., between the Mesquite and Picacho producing orebodies. Exploration work to date has focused on the Indian Rose zone, which will now be further developed by Glamis Gold while Bema Gold carries out exploration in other prospective areas.

Closer to home, Bema Gold is continuing work on its 60%-owned Harrison Lake gold project which has proven and probable reserves in the Jenner stock (one of seven known mineralized quartz diorite stocks on the property) of 2.5 million tons grading between 0.1 and 0.14 oz gold per ton, plus additional reserves in other categories to 5 million tons. The remaining 40% is held by subsidiary company, Abo Resource Corp. (VSE).

Although no longer involved in the project, much of the development work was done on the Jenner stock by previous operator, Kerr Addison Mines (TSE). Because of the complex geology of the property, and the extreme nugget effect encountered in drilling, an extensive bulk sample (1,053 tonnes) was taken by Kerr Addison from the Jenner stock and processed through a portable mill, with results said to be disappointing. Ian Johnson, chairman of Bema Gold, however, believes those results to be inconclusive due to “design deficiencies and operational problems” of the mill, which he said largely contributed to the failure to adequately recover the contained gold.

Johnson said underground work at the Jenner stock would continue in order to fully test its potential to sea level and below. “The key to this operation will be a low cost, bulk mining method such as sub- level caving.”

Surface exploration work is continuing on a number of the other stocks where Johnson said recent drilling encountered higher grades than the Jenner. “We are now addressing the other stocks with some significant first stage results”.

A gold discovery was recently made in step-out exploration drilling on the Hill stock, located 2.5 km to the south of the Jenner. Recent assays were 13.1 ft of 0.25 oz gold and 0.40 oz silver, and 26.3 ft of 0.25 oz gold and 0.40 oz silver. A significant interval was also reported from the Breccia zone to the west of the Hill stock of 23 ft of 0.10 oz gold, 0.30 oz silver and 1.2% zinc, while 26 ft of 0.31 oz gold and 10 ft of 0.60 oz was reported from the Portal stock. The current $1.25 million program at Harrison Lake will run through to February, 1989.