Belmoral pins hopes on Aur drill program

Like many companies that have sold off assets in a bid to pay off a crippling debt load, Belmoral Mines (TSE) is facing a vastly more limited horizon than the one it contemplated as recently as two years ago. But having reduced the company’s debt load to about $1.5 million from $18 million, President Gordon Strasser is optimistic now that partner Aur Resources (TSE) is commencing exploration on Belmoral’s properties east of Val d’Or, Que. Under an agreement approved in October, Belmoral dealt to Aur a 50% interest in its Ferderber and Dumont gold mines, a 1,500-ton-per-day mill and 21,000 acres of exploration properties surrounding the Val d’Or mines.

With about 800,000 tons of proven and possible reserves grading 0.24 oz. gold per ton, the mines are expected to produce 53,000 oz. of the yellow metal this year at an operating cost of $419 per oz.

In return, Aur agreed to forgive a $4.5-million loan made to Belmoral while lending the latter company a further $3.5 million including $2 million for underground and other work at the mines.

A 60-year-old former mining engineer with Wade Engineering of Toronto, Campbell Resources and Inco, Strasser told a reporter from The Northern Miner recently that he is happy to have Aur on board.

“We have gained guys with deep pockets and lots of exploration expertise,” said Strasser in reference to Aur’s 1989 discovery of a large copper-zinc-rich massive sulphide deposit in Val d’Or’s Louvicourt Twp.

For its part, Aur says the chances of finding new reserves in the immediate vicinity of the mine are good and the joint venture will spend $4 million this year to prove that theory.

After setting an initial budget of $400,000, Aur recently commenced an exploration program covering the batholith on joint venture ground in Senneville, Bourlamaque and Louvicourt twps. The program is scheduled to include an airborne magnetic survey to be followed by line cutting, local ground magnetic checks over selected areas and 12,000 ft. of drilling.

As much of the joint venture ground was ignored while Belmoral concentrated on picking up assets elsewhere in North America, a number of high priority targets remain to be tested, according to Strasser. “We have great expectations for Val d’Or,” he said.

Meanwhile, having withdrawn its $9-million offer to buy the Magino and Magnacon projects near Wawa, Ont., Belmoral has resumed efforts to sell a 22% stake in Roddy Resources (TSE) while looking out for other operating opportunities. “After looking at Magino and Magnacon, we didn’t feel they could support the financing needed to buy the mines,” said Strasser.

The 47 million Belmoral shares outstanding traded recently at 12 cents in a 52-week range of 50 cents and 10.5 cents.