LETTERS TO THE EDITOR Developments show true value of junior

Several recent developments well illustrate the true value of exploration to the junior mining sector. Early in January, Queenston Mining and Strike Minerals announced the discovery of a new massive sulphide target near Matachewan, Ont. Both companies’ share price and trading volume rose as investors allied themselves with the juniors while the majors remained interested observers.

In early February, Freewest Resources announced the results of several drill holes at the Lac Pusticamica project in Benoit Twp. in Quebec indicating a significantly new gold discovery. With another advanced project, the Lightning zone, in Ontario’s Kirkland Lake area already rumored to have more than five million tons of 0.25 oz. gold per ton. Freewest witnessed an increase in its share price from the $2.75 level in early January to $4.75 in mid-January.

Deak Resources, possibly the most ambitious junior of 1990, witnessed its shares decline from the $1.15 level in January, 1990, to 19 cents in February, 1991. In late February, Deak reported impressive drill intersections from Magusi, one of its exploration programs near Rouyn, Que., and has seen its shares rebound to the 80 cents level.

It is worth noting that all of the companies employed differing strategies with the same net result. The most significant impact came from exploration results (in two cases from “grassroot” prospects and at Magusi from a past producer) as investors reacted favorably to the new discoveries. It is also worth noting that all of the discoveries were made by juniors having the perseverance to proceed in the current negative financial climate.

The contribution of the majors was as follows: Robertson Twp. (option dropped), Benoit Twp. (joint venture terminated), Magusi — Hebecourt Twp. (mothballed).

The “tire-kickers” that dominate the industry — particularly in the senior echelon — should take note. There is no substitute for the trinity of guts, money and luck. Glenn Mullan Kirkland Lake, Ont.