Golden North, Mascot duo could see production at Bralorne

It might take a while before Golden North Resource Corp.’s Canty mine property in the Hedley area of British Columbia is developed by Mascot Gold Mines, but things could be different for the historic Bralorne mine 100 miles north of Vancouver.

In December, Golden North entered into an agreement with Mascot to acquire a 57.4% interest in the Bralorne property for $9 million in shares. The agreement, which will involve the issue of 1.5 million shares to Mascot, has not been finalized.

But shareholders were told at the annual meeting the deal should close as anticipated after a number of items including some tax considerations have been cleared up. The valuation of $6 for each Golden North share will not change despite the current market price ($4.25 at time of writing), said Golden North President John S. Godfrey. When the Bralorne transaction is completed, Mascot will have a 39% interest in Golden North on a fully diluted basis.

The Bralorne property, which includes the Bralorne and Pioneer gold mines, has reserves totaling 1.04 million tons grading 0.27 oz gold. A $3.1-million program is planned for the property this year and a pre-feasibility study should be completed by June. Preparation of a Stage 1 report is under way and construction could begin in early 1989, said Mascot President Paul Saxton who is also a director of Golden North. The upcoming exploration program will emphasize reserves above the No 8 level for economic reasons. But even at that, it will “not be a cheap producer,” Saxton conceded.

Golden North has a 20% net profits interest in the Horsefly-Terrier group adjoining Mascot’s south pit near Hedley, B.C. An 1,800-ft access drift is being driven into an ore zone on this property; the zone is actually a down-dip extension of an ore zone on the nearby Bulldog claim. Ore grade material is being stockpiled and Golden North expects cash flow from here later this year. Mascot believes the Horsefly-Terrier will support an underground production rate of 400 tons per day, averaging 0.35 oz gold which would be a nice boost over current millheads from open pit mining operations.

The Mascot fraction claim will probably be developed in conjunction with the Mascot’s north pit, said Saxton, who added: “The story has yet to be told on the Canty and Canty East.” The Canty has open pit reserves of 658,000 tons grading 0.15 oz gold and a 7:1 strip ratio. It has a higher arsenic content than Mascot current reserves but with proper blending procedures this is not expected to be a problem.