Major General backs Rendell-Jackman

Shareholders attending the recent annual meeting of Major General Resources (VSE) were told that the company is involved in early stage discussions with Noranda (TSE) relating to the Rendell-Jackman joint venture in Newfoundland.

Situated near Springdale, the gold project is owned equally by the two companies.

“Noranda Exploration has indicated that the upside potential of the Hammer Down gold zone does not meet the investment criteria of a company the size of Noranda Inc.,” Major General President Byard MacLean told shareholders. “We, however, strongly believe Rendell-Jackman has the potential to make a profitable mine for us.”

The companies are discussing an amendment to the existing joint venture, but no developments can be reported at this stage. The two companies, however, have approved a $100,000 drill program scheduled for this summer to test four base metal and gold targets on the property.

Noranda estimates the project currently has undiluted recoverable mining reserves in the Hammer Down zone totalling 400,000 tons grading 0.37 oz. gold per ton, while Major General’s estimate (based on a different method) is reported as 397,000 tons grading 0.31 oz. gold per ton.

Based on some internal studies, Major General concluded that current reserves would generate a positive but unacceptable rate of return. MacLean told shareholders that potential exists in several areas to double the current reserve, and a decision to start an underground program would be “attractive” if current reserves were increased by about 85%.

Major General has other mineral projects in Canada, including a number of property interests in the Omineca porphyry copper-gold belt in central British Columbia.