U.S. REPORT Newmont drops Bruner

The recent announcement that Newmont Mining (NYSE) dropped its option on the Bruner project has shed some light on the erosion of the share price of Miramar Mining (VSE) during the past month. Miramar’s price experienced a progressive decline over the month of January, halving to a recent low of $1.25 from the $2.50 level at year-end.

Newmont had the right to earn a 51% interest in the Bruner project by bringing it into production. The Bruner is in Nye Cty., Nev., and Newmont began preliminary work on the property in 1988 and signed an option agreement in early 1989.

The target on the property was a large, low-grade, disseminated gold deposit. Details of Newmont’s work have been sketchy during the past two years and Miramar shares had been the subject of much speculation, hitting a high of $3.90 last year amid rumors of wide intersections.

Stephen Quin, vice-president of Miramar, said the company has received a number of inquiries on the property from major mining companies and is now reviewing all the exploration data received from Newmont.

Miramar is also reviewing the possibility of farming out its Flowery operation near Reno, Nev. The Flowery is 60% owned by Miramar, and 40% owned by the company’s affiliate American Eagle Mining.

Mining operations at the mine were suspended last summer when the company ran into difficulties with its mining contractor. Leaching is continuing at the site, weather permitting, with 6,175 oz. gold and 69,000 oz. silver recovered to date.

The Flowery is estimated to contain proven and probable reserves of 6.3 million tons grading 0.043 oz. gold per ton.

Miramar recently signed two lease agreements on a block of 29 patented and unpatented mineral claims less than two miles from the Flowery.

The claims cover a mile of strike on the Occidental lode where an estimated 350,000 oz. gold has been produced from small, high-grade operations since the turn of the century.

Miramar must pay advanced royalties of US$2,500 per month and spend a minimum of US$75,000 on the claims in the first year. The lease is also subject to a 5% NSR royalty.

Miramar raised almost $4 million last summer in a unit deal priced at $3.15 per unit. The units consisted of one share and two warrants. The company now has about 7.5 million shares outstanding and working capital of $3.5 million.