Minnova continues to focus on gold in Quebec, Ontario and B.C.

Minnova’s exploration activity in 1987 continued to focus on polymetallic massive sulphide base and precious metal mineralization in selected paleo volcanic environments in Quebec, Ontario and British Columbia. Gold exploration also accounted for a significant level of expenditure.

Two deposits were discovered and delineated during the year:

* The Samatosum deposit, about 100 km north of Kamloops, B.C., is a joint venture between Minova (70%) and Rea Gold Corporation (30%). Minnova is operator and each party contributes funds in proportion to its interest.

Diamond drilling established a 600,000-tonne deposit grading 1,100 g of silver per tonne, 1.8 g of gold per tonne, 3.5% zinc, 1.2% copper, and 1.7% lead.

The deposit occurs as massive and disseminated sulphides including tetrahedrite, sphalerite, galena, chalcopyrite and pyrite in a cherty horizon near the contact between a sequence of submarine mafic volcanic rocks and thin to massively bedded argillites, wackes and conglomerate. Metallurgical work is in progress and the feasibility of placing this deposit into production is now being studied.

* The Donalda project at Rouyn- Noranda, Quebec is a joint venture between Minnova (65%) and Syngold Exploration (35%).

The deposit consists of two gold- bearing quartz veins in mafic volcanic rocks with drill inferred possible reserves of 730,000 tonnes grading 8.6 g of gold per tonne. The faulted extension of the originally mined Donalda No. 1 vein was discovered by surface drilling and a second, deeper vein has reserves based on previous work.

Dewatering and rehabilitation of the existing shaft is in progress. Underground drilling, drifting and raising in the vein will be carried out in 1988 to ascertain the continuity and grade of mineralization and to estimate the cost and feasibility of mining.

Minnova’s exploration strategy and level of expenditure in 1988 will be similar to that of 1987. The company stresses imaginative and decentralized management, maintaining field offices in Chapais, Que. (Marc Boisvert), Rouyn- Noranda, Que. (Gerald Riverin), Thunder Bay, Ont. (Frank Balint), Vancouver (Alex Davidson) and Sparks, Nev. (Paul Mattinen). Each office is staffed with a team of individuals who balance good scientific skills with competent business judgment.

Exploration from the Chapais office will focus primarily on gold to increase reserves for the Opemiska and Lac Shortt operations. An underground program in conjunction with Les Mines Messeguay, 5 km east of Chapais, is being carried out to evaluate erratic, high grade gold drill intersections in quartz veins and shear zones similar to those at the nearby Cooke mine. A number of other projects will be drilled near Lac Short and Chapais.

Deep drilling and geological interpretation continue to be the mainstay of exploration in the Lac Dufault area at Rouyn-Noranda. This approach has yielded considerable success in the past, most recently with the discovery of the high grade copper/gold Ansil deposit, which should be in production early in 1989, and with the discovery of the Donalda vein extension last year. The team from Thunder Bay will continue to explore for massive sulphide deposits in an effort to repeat its success in discovering the Winston Lake deposit, which is now tuning up for full commercial production.

Work is planned for the Sturgeon Lake area in conjunction with Seadrift Resources and Dominion Explorers, in the Shebandowan area with Wilco Mining, and in the Swell Bay/Mine Centre area where encouraging results continue to be obtained on a large property. Exploration in the Snow Lake area of Manitoba is also carried out from Thunder Bay on a project in a joint venture with International Thunderwood.

Activity from the Vancouver office in British Columbia is focussed in three main areas: in the Samatosum area north of Kamloops; in the Britannia volcanic roof pendant just north of Vancouver; and in Sicker volcanics near Duncan on Vancouver Island. A number of attractive Tertiary gold prospects have also been acquired through a program in south-central British Columbia.

The exploration program from Sparks is carried out in a joint venture with Keradamex and focuses on Nevada type gold prospects.

Minnova will maintain its commitment to research and new technology in 1988 as a means to achieve exploration success. This is done through funding and logistical support of research projects at various universities, through involvement with research project with various private and governmental agencies, and through the innovative application of new and developing technologies.

During 1988, Minnova will make limited use of flow-through funds and will continue to work with a large number of joint venture partners to increase leverage on its own exploration dollars. We look forward to more success in 1988 for ourselves and our partners.