Gold play developing at Brookbank

Geologists working on behalf of Ontex Resources (ASE) are comparing the Brookbank gold deposit near Beardmore, Ont., to a Freewest-type deposit without the rewards of intensive exploration.

Current reserves at Brookbank stand at 1.4 million tons grading 0.26 oz. gold per ton.

“This is very much a virgin situation,” Dr. William Pearson, president of Pearson, Hoffman and Associates, told Ontex shareholders at a recent annual meeting. “There is certainly immediate potential to expand reserves down-plunge and there’s an awful lot of potential along strike to the east and west.”

A recent letter of intent with Placer Dome (TSE) that calls for, among other expenditures, a $1-million, 6-month exploration program, may finally give Ontex a chance to prove its theory.

Exploration at Brookbank has undergone a 2-year hiatus since Ontex initiated a legal battle with partner Metalore Resources (TSE) for control of the property. At the end of last year, Ontex was awarded title to the 18 claims that make up the Brookbank property as well as 471 adjoining claims staked and acquired by Metalore.

Ontario judge Robert Montgomery ruled that Metalore breached its fudiciary duty and misused confidential information it was supposed to share with Ontex. Metalore President George Chilian has decided to appeal the Ontario Court decision. But some of his shareholders, angry about the money they believe is being wasted on the case, are refusing to support Chilian.

“We are very concerned with Metalore’s decision to proceed with an expensive court appeal . . . , a legal proceeding that seems flawed in many ways,” said two shareholders in a 2-page protest letter. “We believe the current president of Metalore to be self-seeking, the board to be insufficiently assertive, and neither to be acting in the best interests of the majority of stockholders.”

Insiders say the chances of Metalore winning the appeal are slim at best. “I think there are reasonably insurmountable odds against Mr. Chilian,” said John Eversley, council for Ontex.

The Brookbank deposit occurs within a distinct zone of silicification along the Brookbank fault. The bulk of the deposit lies below 1,000 ft. and extends to a depth of 2,000 ft., where it remains open.

Pearson believes most of the potential for expansion lies along the strike length between the Brookbank deposit and the Cherbourg vein a few thousand feet to the west.