Exploration ’88 CONIAGAS

Coniagas Mines, both directly and through affiliated companies, is pursuing a number of essentially gold exploration targets, which represent a 1988 budget of about $4 million. For Coniagas itself, the major target involves the recent agreement with Falconbridge Ltd. and Garrison Creek Consolidated Mines covering the latter company’s properties in Guibord, Michaud and Garrison Twps., about 65 miles east of Timmins, Ont. This is a 2-stage program, the first stage of which Coniagas will fund to the tune of $1.3 million over a 2-year period. The company also has an option to fund a second-stage, $960,000 program. The first stage of the program began in September, 1987, and is centered on the known Ludgate Gold zone at the Michaud Twp. property. Upwards of $500,000 will be spent to delineate the western extension of the Ludgate zone. This zone has been drilled in the past, and drill-indicated reserves have been set at more than a million tons grading close to 0.10 oz gold per ton to a depth of 700 ft. Results from the initial 6-hole program have been completed and assayed, including one hole, an approximate 1,800-ft step-out to the west of the main Ludgate zone. The zone is now being tested at intervals to the east in a series of fill-in holes. Falconbridge is the operator- manager of the program, and this phase is budgeted at the $500,000 mentioned above. The overall objectives of the program will cover exploration drilling on the other two major claim blocks in Guibord and Garrison twps. If Coniagas completes this 2-stage program, it will obtain an approximate 90% equity interest in Garrison Creek Consolidated, which owns a 40% interest in these properties. Falconbridge holds the remaining 60% interest.

Anglo Dominion Gold Exploration, a Coniagas affiliate, is undertaking an exploration program at its Missanabie area gold property (located to the east of and adjoining the Renabie mine). This will test a separate vein system to the east of the shaft, from which ore had been shipped to Kidd Creek during 1986 and 1987. The current program is tentatively budgeted at more than $500,000 for 1988. In addition, Anglo Dominion holds a 50% interest in the Little River joint venture in Newfoundland. The 1987 program has been budgeted at upwards of $750,000 and will include at least 7,000 ft of diamond drilling in an initial test of a number of new areas.

Bachelor Lake Gold Mines has budgeted some $600,000 to continue exploring the newly defined “A” Vein structure, a play that has been funded by the parent, 20%-Coniagas-controlled Quebec Sturgeon River Mines. Surface diamond drilling will test the roughly 8,000 ft of strike length east of the shaft to the property boundary. The underground portion will consist of drilling at stations from the second to the 11th levels. The 10,000-ft surface program was begun in mid- November as a follow-up to previous geophysical surveying.

Separately, Bachelor Lake is funding its proportionate 49% share of the $1.3-million exploration program at the Flordin gold property, some 40 miles south and west from the minesite. The underground portion of the program has already been completed, and extensive surface drilling is now in progress. About 75% of the scheduled 40,000 ft of surface drilling, which is testing several targets between the decline area and the old Cartwright shaft, was completed by the end of last November. The remaining 7,380 ft of drilling in eight holes was completed in early January of this year.

Originally with Sullivan Mines, this joint venture is now with a subsidiary of Cambior Inc. A considerable backlog of interpretive work must be completed before any comprehensive assessment of this second-stage program is possible. However, the company says a substantial exploratory program will probably be undertaken for the 1988 field season. Meanwhile, a test shipment of Flordin ore processed during the summer at the Bachelor Lake mill confirmed its suitability to the existing circuit. Because an agreement is likely to be reached between Bachelor Lake and Aur Resources, the metallurgy is a relevant factor in 1988. Aur Resources is conducting an extensive underground program at its property contiguous to the west of the Bachelor Lake mine. Access is provided from the sixth and eighth levels. The Aur Resources undertaking for the current year, budgeted at $1.7 million, is expected to lead to a production decision either in late 1987 or early 1988. The ore probably will be treated at the Bachelor Lake mill. Another Coniagas affiliate, St Andrew Goldfields, plans an intensive, $1-million program of surface exploration during 1988. This will include at least 10,000 ft of drilling in the Shoot zone, about six miles east of the Stock Twp. mine. That mine is being groomed for production in early 1989. An estimated 1.3 million tons of ore has been indicated both in the earlier work by Hollinger and Esso Minerals and, more recently, by Esso Minerals in its 1987 program funded by St Andrew Goldfields. A major 1988 target is the partially drilled East zone, which has been tested along a strike length east to west of some 1,650 ft and to depths up to 1,200 ft from surface. The East zone is about 3,000 ft east of the Stock Twp. underground workings. Here, about 20,000 ft of surface drilling is planned, including 10,000 ft early this year with five holes laid out on sections 300 ft apart. The 1988 drill program will augment this and will test to greater depth, initially on the widely-spaced pattern. About 10,000 ft of fill-in drilling will be done later in the year. In addition, a further 10,000 ft of surface drilling is scheduled in another test of the West zone, a considerable distance to the west of the Stock Twp. mine underground workings. In this area, encouraging results have been obtained in the 1987 reconnaissance drilling.

The 1988 exploration programs planned for the Coniagas Mines Group, tentatively set at roughly $4 million, represents a substantial increase over the 1987 level of activity.