Corona to focus on gold assets

Now that shareholders have overwhelmingly approved a name change and a 1-for-2 share consolidation, International Corona (TSE) is continuing efforts aimed at separating its assets into publicly traded gold and non-gold companies.

The restructuring proposal outlined to shareholders at the company’s recent annual meeting involves Corona retaining its gold assets. The non-gold assets would be transferred into a separate new company which would in turn hold an approximate 25-30% interest in Corona. A definitive restructuring plan is being developed which the company hopes to implement by the end of the 1991 third quarter.

Corona President Peter Steen told shareholders that development of the Eskay Creek project north of Stewart, B.C., will be an important priority for Corona during the next few years.

Steen said the company would be proceeding on its own to put the property into production because attempts to forge a working relationship in some form of joint venture with Placer Dome (TSE) failed. Both majors hold indirect interests in Eskay Creek which is owned equally by Prime Resources Group and Stikine Resources.

“The mine is expected to process between 700 and 1,000 tons of ore per day,” Steen said. “Because of the high grade of ore being produced, both cash cost and total cost of production are expected to be low, in spite of the challenges associated with the location of the mine site and the metallurgical complexities of the orebody.”

Steen said the deposit would probably require special treatment by autoclaving, an established technology that is being successfully used in several mines in North America.

Based on an underground program that began last summer, Corona is of the view that an open pit mining scenario is unlikely at Eskay Creek because of high strip ratios, difficult topography and adverse climate. At this stage, it is expected that underground drift-and-fill mining method will likely be employed.

Since the underground program began, Tonto Mining has completed 6,600 ft. of development including three crosscuts through the main ore zone. This contract was completed in May of this year with the completion of a 1,500-ft. haulage drift exiting at the proposed plant site. A bulk sample for pilot plant test work was also mined.

Corona said ground conditions have been “much as expected,” with support requirements ranging from spot bolting to steel sets in areas of more severe faulting. Supplementary shotcrete will be required in some areas where longer-term support is required.

A test mining program is planned for this summer, and a feasibility study is expected to be complete by mid-1992.

Shareholders were also informed of operating results at Corona’s gold mines, including the 50% owned David Bell and Williams mines at Hemlo, Ont. These two mines established new records in 1990 by producing a total of 912,226 oz. gold at an average cost of well below US$150 per oz.

Corona is also continuing a number of initiatives aimed at reducing debt and strengthening its balance sheet.