Exploration ’88 NORTHGATE

Thanks to the sale, late last year, of the Copper Rand and Portage mines in Chibougamau, Que. to Western Mining of Australia, Northgate Exploration is a cash-rich explorer. Cash and investments total about $200 million, and with that financial muscle, the company says it is ready to pursue acquisitions and joint ventures, as well as fund direct mineral exploration programs. In 1988, Northgate will spend more than $23 million on exploration in Canada, the U.S., Australia and the United Kingdom. The money will be spent through its own programs and through those of subsidiary and associated companies. Gold remains the major focus of the company’s efforts. However, improving base metal prices have made polymetallic situations increasingly attractive. And that will mean Northgate will be involved in base metal exploration as well, says President John Kearney.

On Dec 18, 1987, Northgate announced it had reached a definitive agreement to sell its mining operations and associated exploration properties in northwestern Quebec to Western Mining of Australia for $160 million in cash. As a result, this year Northgate will emphasize the search for joint ventures and acquisitions that will enable the company to re-deploy these funds and continue as a major North American mining entity.

Orofino Resources, a 55%-owned subsidiary of Northgate, has budgeted exploration expenditures of $3.8 million for 1988. About $1.8 million of this will be spent on an underground exploration program at the Swayze property, 60 miles southwest of Timmins, Ont. The program is designed to confirm probable reserves of 241,800 tons grading 0.24 oz of gold per ton lying within 400 ft of the surface.

A major drilling program will be carried out on the Coronation Gulf property in the Northwest Territories, in which Orofino can earn a 40% interest. Drill-indicated reserves stand at 860,000 tons grading 0.22 oz gold per ton.

Orofino is also very active in northwestern Ontario and is planning work on a number of gold properties, including Red Summit (west of Red Lake), Vermilion Lake, Seine River and Jackson-Manion. About 13,000 ft of drilling was completed on the Red Summit property in 1987; in 1988, reserve calculations will be completed on the gold zone that has been delineated. A winter drilling program is planned for the Jackson-Manion property in the Uchi Lake Belt to define reserves in the immediate vicinity of the old mine, where limited drilling in 1984 intersected a similar grade extension of the original mine. That mine produced 105,000 tons of ore and yielded 23,000 oz of gold and 18,000 oz of silver. Initial drilling will also take place on two other prospects on this property. On the Vermilion Lake and Seine River properties in the Mine Centre area, mapping and trenching will focus on a 100-ft-wide shear zone outlined by drilling in 1987.

In 1988, Orofino expects to produce about 10,000 oz of gold from its Scadding property, northeast of Sudbury, Ont. Company officials say they believe Orofino has established itself as a growing junior gold company.

Westfield Minerals, 26%-owned by Northgate, has a total 1988 Canadian exploration budget of $3.1 million, of which $900,000 will be contributed by joint-venture partners. Most of these funds are targeted toward the search for precious metals. Westfield operates its Canadian exploration programs from a head office in Toronto. The chief geologist is T. N. McKillen. It also has a western Canadian office in Vancouver. J. J. Royall oversees western operations. Westfield has three full-time geologists augmented by six contract geologists and temporary staff as required.

On the Little River project, in south- central Newfoundland (a 50/50 joint venture with Anglo-Dominion Gold Exploration), a 7,500-ft drill program is testing for gold mineralization that has been identified over a 15-km strike length. In the Casa Berardi area of Quebec, Westfield has a 70% interest in a joint venture that plans an extensive drilling program in 1988 to follow up on gold/arsenic overburden anomalies defined by reverse circulation drilling in 1987.

An $800,000 program is planned to follow up very significant gold/silver/ zinc/copper values received from drilling on the Big Island Lake project, near Flin Flon, Man. Drill intersections include a 40.7-ft intercept grading 0.17 oz of gold per ton, 2.73 oz of silver per ton, 22.44% zinc and 0.58% copper. The winter program on this discovery and other nearby targets will consist of a minimum of 10,000 ft of diamond drilling. Westfield also has programs underway in the Elbow Lake area, near Flin Flon, and the Pickle Lake area of Ontario.

Internationally, Westfield is actively involved in exploration in the U.S. through a 25% interest in the wx Syndicate, which has substantial property interests, mainly in Nevada. The company also recently agreed to participate (35%) in the development of the Choquelimpe gold/silver project in Chile. By 1990, annual production at Choquelimpe should reach 100,000 oz gold equivalent.

Also on the international front, Northgate has a 35% direct and indirect interest in Ennex International plc, which will be spending about $9 million on exploration, mainly in Europe. About $4.5 million of that will be spent on an underground exploration program now underway on the Sperrin Mountains property. A geological reserve of one million tons grading 0.3 oz gold per ton has been identified there. Diamond drilling on the Cononish prospect in Scotland has identified an extensive quartz vein structure with an average width of 9 ft and a grade of 0.37 oz gold per ton (uncut), based on assay results from 18 holes.

In Australia, Northgate has a 14% direct and indirect interest in Whim Creek Consolidated N.L., which has a large and extensive exploration program, principally directed toward gold. Total budgeted expenditures for 1988 are $3.5 million and Whim Creek’s 39%-owned subsidiary, Austwhim Resources N.L., anticipates spending a further $3 million.