Queries Fort Knox’s gold mining ambitions on hold

Could you please let me know what is happening with a company called Fort Knox Minerals. The company trades on the Vancouver Stock Exchange and its interests include the Eagle Bird mine in California’s Mother Lode area. Reports published in 1986 appeared very promising but I have heard nothing since. R.G., Montreal, Que.

When last heard from, Fort Knox Minerals (VSE) had acquired a 50% interest in a 783-acre property which included a former producer called the Eagle Bird. Located in the Graniteville Mining district near Nevada City, the Eagle Bird produced 150,000 oz gold before a fire destroyed the mill and surface workings in 1909.

According to reports compiled in 1986, the property has returned values of up to 0.5 oz gold per ton and less than 10% of possible reserves were removed before the fire.

In addition, the report said current reserves can be increased by exploration below the 800-ft level where a 30-ft wide vein averaged over 1 oz. The Empire and North Star mines, which are located in the adjacent Grass Valley mining distict, were mined to the 10,000-ft level.

To earn its interest, Fort Knox was required to issue 350,000 common shares at 50 cents per share to Dr Sherwin Miller of Tiburon, CA and spend $570,000 on exploration.

In May, 1986, the road to the mine was being rehabilitated and a drill rig was expected to be moved onto the property in preparation for a 10,000-ft reverse circulation drill program.

The program was designed to test for deeper extensions of the previously mined ore shoots and to explore for additional ore in the virgin area between the portal and the Blue Bell mine to the north of the Eagle Bird.

After releasing the results which included 5 ft of 0.765 oz at a depth of 720 ft, Fort Knox vice-president Nevin Miller (Sherwin’s son) said “management is optimistic that the company will be able to secure additional funding to develop ore reserves.”

However, according to Fort Knox’s accountant Bill Lawson, that turned out to be a vain hope. The Oct 19 market downturn coincided with Miller’s project financing efforts and the money was never forthcoming.

Since the issue is currently trading on the Vancouver Stock Exchange in the 10 cents to 15 cents range, the Fort Knox directors have put their gold mining ambitions firmly on the back burner.

As a result, leases on the Eagle Bird and some claims in the Casa Berardi, Que., area have been allowed to lapse. “The future looks dim unless the Vancouver market picks up,” said Lawson.