Golden Shield encouraged with feasibility at Mirado

With a detailed feasibility study nearing completion, Golden Shield Resources anticipates a production decision to be made later this fall on its Mirado gold project, says President Raymond J. Mongeau in the annual report.

Located near Kirkland Lake, Ont., the project has an interim ore reserve estimate of 345,000 tons in all categories grading 0.34 oz gold per ton. This reserve figure is fairly conservative, says Mr Mongeau. Since it was calculated, 1,250 ft of underground drilling, crosscutting and raising have been completed along with stripping of the potential D-zone pit and 11,000 ft of diamond drilling.

Once these results have been compiled, Mr Mongeau feels total reserves will be increased to over 400,000 tons with about 100,000 tons in the proven category. He adds that other gold-bearing zones are known to exist above the 500-ft level but these will only be investigated after production has started.

With the feasibility study expected to be ready in the middle of this month, Mr Mongeau says a production recommendation of 300 tons per day is expected.

The company’s consulting engineers feel it may be possible to start shipping a bulk sample of ore from the D-Zone pit about mid- January and from the F-Zone by February, 1987. Meanwhile, discussions are under way with two gold mining operations that offer custom milling services in the area, he says.

Though a full agreement has yet to be made, Mr Mongeau says with results of bulk sampling the company should be in a position to commit to full open pit production by March, 1987.

With the scenario of open pit production for the first half of the year followed by modest underground production in the second half of the year, the Mirado is capable of producing at the rate of 27,000 oz of gold in 1987 and 35,000 oz in 1988.

Meanwhile on its claims in Hoblitzel Twp., in northeastern Ontario, which are optioned to Newmont Exploration of Canada and their joint venture partner C.S.A. Minerals, Mr Mongeau says the first phase of exploration completed revealed the presence of gold- bearing quartz veins. The best drill hole value was 0.52 oz per ton over 5.2 ft. More drilling is proposed for early 1987.

The first phase of exploration on the Forty property in Orvillier Twp. in the Casa Berardi area of northwestern Quebec, has been completed by Golden Shield and joint venture partner Morgain Minerals.

Here, a total of 3,000 ft of diamond drilling was completed with low anomalous gold values detected in sulphide-bearing carbonatized and silicified alteration zones. Mr Mongeau says additional drilling is warranted to test the strike extensions of these alteration zones.

On the company’s Montgolfier Twp. property also in Casa Berardi and optioned to Placer Development, Mr Mongeau says Placer has started diamond drilling to follow up the hole drilled earlier this year on the Casa Berardi Break which returned 0.10 oz gold per ton over a width of 10 ft. Mr Mongeau says while management is highly encouraged with the results of work to date, he stresses it will take Placer several years to fully test the potential of the property. Only a portion of the potential gold bearing horizon has been tested so far with a full one- third of the property not being prospected at all.

Regarding its heap leaching project in Esmeralda Cty., Nev., Mr Mongeau says heap leach tests are in progress. Golden Shield has both an 8% working interest in its Dexter mining property package by providing a loan of $75,000(US) and equity of $112,000. The company had an option to acquire an additional 37.5% working interest in the venture but Mr Mongeau says the company was not able to exercise it at the time.

The current in-situ reserve estimate is set at 4 million tons of 0.06 to 0.09 oz gold per ton.

Mr Mongeau says funding in the amount of $6.8 million for the programs outlined above was obtained primarily by private placement of flow-through shares and a public underwriting of units. Of this, about $3 million has been spent on the Mirado and a further $1.7 million is budgeted for the completion of the planned work program.

For the year ended April 30, the company posted a loss of $116,146 (3 cents per share), an improvement over the $309,935 loss (9 cents per share) posted in 1985.