Market down on latest Louvicourt drill results (August 21, 1989)

Even though assay results from five holes released recently from Louvicourt Twp. tripled the potential size of the discovery, the share prices of partners Aur, Louvem and St. Genevieve Resources (TSE) declined immediately after the results were released.

The share price of Aur which holds a 50% stake in the discovery dropped 87 cents . Louvem, whose 50% interest is being questioned because of an alleged default during an earlier exploration phase, was also down 87 cents . Louvem’s parent company St. Genevieve lost 25 cents .

News that the Louvicourt Twp. deposit could contain at least ten million tons of copper-zinc-gold rich massive sulphides instead of a previously estimated five million tons, may have caught some investors by surprise, said Yorkton Securities Inc. analyst Eric Zaunscherb.

Investors who expected the results to be tabled 24 hours later may not have been positioned to take advantage of the announcement, he said. In many instances investors tend to buy on rumor and sell on fact.

The participation of mining giants Teck Corp. (TSE), Cominco Ltd. (TSE) and Noranda Inc. (TSE) in the project may be another reason why the share prices of the joint venture partners declined initially, according to McLean McCarthy Ltd. analyst Ron Coll.

Teck and Cominco combined to acquire a 19% stake in Aur for $35 million while Noranda has agreed to purchase 11.3% of Louvem’s outstanding shares for $8 million. “The speculative element in the discovery may have decreased now that three majors have taken out options on the companies involved,” said Coll.

Nevertheless, it wasn’t so much the size potential of the discovery as the strong copper, zinc values in the latest drill holes which pleased Aur Resources President James Gill.

In a step out hole (54) 400 ft east of the drilling area, Aur intersected 73.3 ft of grade 3.81% copper, 6.49% zinc, 2.78 oz silver and 0.08 oz gold per ton at a vertical depth of 1,680 ft.

In another hole 110 ft east and 115 ft above one of the discovery holes, Aur pulled a 204 ft intersection which averaged 3.84% copper, 0.70 oz silver and 0.04 oz gold.

“Some people were disappointed with the result of hole 49 (the last hole to be released from Louvicourt Twp.) but the grades in hole 54 has put an end to that kind of talk,” Gill told The Northern Miner.

He is also encouraged that hole 53, for which results have yet to become available, has intersected the deposit at a vertical depth of 2,500 ft, 400 ft below the deepest ore grade intersection obtained previously.

With assays expected to be available this week from Hole 53, the deposit has been outlined over a 1,600-ft strike length and over a dip length of 1,200 ft. Aur has yet to explore above a vertical depth of 1,000 ft.

As reported (N.M., June 26/89) the discovery occurs within a classic base metal environment characterized by felsic pyroclastic rocks bordered by a large alteration zone.

While the long distance between drill holes prevents Gill from drawing any hard and fast conclusions from the latest results — what Aur knows about the deposit so far is based on the results of only 18 holes — he said it is unlikely that mineralization will be contained in a “whole bunch of discontinuous lenses.” “There may be more than one lens, but its still too early to speculate,” he said.

All of the intersections released this year from Louvicourt Twp. were encountered in a previously unexplored horizon 800 ft south and 2,000 ft east of the old Louvem zinc-copper mine workings. According to Gill, it is conceivable that underground exploration at the Louvicourt discovery could be conducted from the old mine.

“It is possible to use the 1,000-ft level as a drilling platform and drift out towards the Aur horizon,” said Gill. “But no decision will be made on something like that until we have a chance to look at costs and find out where the deposit’s centre of gravity is,” he said. Mining company’s use the centre of gravity of a mineral deposit to determine where to construct the mine shaft.

In a bid to extend the dimensions of a discovery which is still open in all directions, Aur has four drill rigs on site. One of those rigs is drilling both to the east of and 500 ft below step out hole 54. Another rig is currently drilling above discovery hole 39 at a depth of around 1,200 ft. As reported (N.M., June 19/89), hole 39 intersected 65 ft of grade 4.57% zinc at a vertical depth of 1,960 to 2,025 ft below surface. “We will be drilling with four rigs for months to come,” said Gill who predicted that the ne xt results will be available within three to four weeks.

..TABLE Hole No. (feet)* (feet) (feet) (%) (%) (oz/t) (oz/t) 309-42b 1970 2557.0-2761.0 204.0 3.84 0.34 0.70 0.04 2628.0-2761.0 133.0 4.83 0.52 1.00 0.05 2628.0-2676.0 48.0 7.71 0.02 1.52 0.08 309-50 1350 1542.5-1551.5 9.0 0.44 20.72 2.13 0.19 309-51 abandoned 309-52 abandoned 309-53 2500 3016.2-3190.2 174.0 assays not yet available 309-54 1680 2133.0-2206.3 73.3 3.81 6.49 2.78 0.08 2152.3-2206.3 54.0 5.11 6.90 3.54 0.10 309-55 1640 2078.0-2103.5 25.5 0.03 2.17 0.02 0.01 309-56 1420 1390.0-1741.5 351.5 1.23 0.07 0.17 0.01 1401.0-1492.0 91.0 2.01 0.12 0.22 0.01 1434.0-1450.5 16.5 4.01 0.27 0.12 0.03 1434.0-1492.0 58.0 2.63 0.11 0.25 0.01 1543.0-1623.0 80.0 1.83 0.04 0.12 tr. 1731.0-1741.5 10.5 4.03 0.44 1.83 0.03 * The depth is to the mid-point of the sulphide intersection.

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