Goldcorp takes a stake in lonore neighbour

Having thoroughly kicked the tires at the recently acquired lonore gold discovery in the James Bay region of Quebec, Goldcorp (G-T, GG-N) has agreed to take a 9.9% stake in neighbour Beaufield Consolidated Resources (BFD-V) for $3.4 million.

Under the proposed deal, Goldcorp would subscribe to a private placement of 6.8 million Beaufield units at 50 apiece. Each unit includes a share accompanied by half a warrant, with a full warrant good for another Beaufield share at 55 per share for 2 years. Assuming all of the warrants were exercised, Goldcorp’s interest in the Ottawa-based junior would climb to 14.2%.

Beaufield’s Opinaca property is sandwiched to the northeast and southwest by Virginia Gold Mines‘ (VIA-T) lonore project. In mid-December, Goldcorp inked a definitive agreement to acquire Virginia via an all-stock deal worth more than $500 million (T.N.M., Dec. 12-18/05).

The lonore project is centred on the steeply dipping and sub-parallel Roberto, Mid-Roberto and Roberto Est mineralized zones. The system has been traced over a lateral distance of more than 1.9 km and to a vertical depth of 900 metres. It remains open in all directions; work on the periphery of the system has outlined the emergence of new gold-bearing quartz zones often containing visible gold.

In early November, Virginia reported the best ever best-ever intersection from the Roberto zone, with a 15-metre interval running 22.6 grams gold per tonne. In all, 70% of the 2121 212 drill holes sunk on the property so far have yielded assay results exceeding 10 grams gold per tonne.

Goldcorp plans to advance lonore as rapidly as possible, with resource and scoping studies to soon begin. The company also plans to expand Virginia’s ongoing environmental baseline studies. An initial resource estimate and the results of the scoping study are due by mid-2006.

Beaufield’s 56-sq.-km Opinaca property covers the contact of the Ell Lake stock with sediments and conglomerates, and the interpreted extensions of the Roberto system, 8 km to the east. The property is home to several gold and arsenic anomalies.

In July, sampling of greywackes and conglomerates at four different locations along a 7-km-long stretch of the Channel zone returned values of up to 12.03 grams gold per tonne. The sedimentary units are the same as those hosting Virginia’s gold discovery.

Of the 113 samples collected, 25 returned anomalous gold values, while four contained highly anomalous arsenic values. The four best samples contained 4.2 grams gold and 6.4 grams silver in a granite rusty zone, 12.03 grams gold in greywackes, 6.02 grams gold and 0.9 gram silver in greywackes, and 0.097 gram gold and 3.33% arsenic in sheared basalts near the contact with greywackes.

Sampling to the north on the Snoopy zone turned up surface values in the 1-2 grams gold range, with associated copper values of up to up to 1.8% copper. Beaufield believes the zone is similar to Virginia’s Ell Lake zone.

The centrally located Rusty zone contains anomalous gold of up to 0.7 gram associated with arsenic and massive sulphides.

Goldcorp and Beaufield plan to pool their exploration efforts in the area. The two will also co-operate on technical, financial and permitting issues at Opinaca.

“Following this transaction, Beaufield would benefit from the knowledge of Goldcorp’s ownership of the Eleonore property as it continues to explore its Opinaca property which has similar geology,” said Beaufield president Jens Hansen in a prepared statement.

Beaufield’s financial advisor Blackmont Capital will receive a 6% cash commission and 408,000 warrants exercisable at 55 a share for 2 years.

The deal will also see Beaufield’s coffers topped up to $6 million. The company is planning drill programs for Opinaca and its Hemlo gold project in Ontario, as well as the Troilus base metals project in Quebec.

Shares in Beaufield surged as much as 19, or 36.5%, to 71 in early Venture-Exchange trading following the news on Jan. 11. For its part, Goldcorp recovered from an early stumble to sit 27 better at $28.67 in early afternoon trading in Toronto.