Atlantic Report New N.S. company into gold action

Scotia Prime Resources, a new Halifax-based company that is entering the Nova Scotia gold play, has acquired several properties with gold potential in the Meguma Group of rocks.

Among them are former gold producers at Ecum Secum in Halifax Cty. and Crow’s Nest and Lower Seal Harbour in Guysborough Cty.

Reconnaissance properties include claims at Otter Lake, Halifax Cty., covering a magnetic anomaly on the Beaver Dam anticlinal structure about 8.5 km southwest of Seabright Resources’ Beaver Dam deposit; the Cameron Dam property in Halifax and Guysborough ctys., where auriferous boulders have been found over a widespread area covering three separate anticlinal structures; Farmville in Lunenburg Cty., where a quartz- veined breccia zone seven ft wide is reportedly goldbearing; and 36 claims near Upper Rawdon, Hants Cty.

The company plans grass-roots exploration programs on all its gold properties this summer, followed by diamond drilling when targets have been delineated. Drilling is expected to commence on the Lower Seal Harbour and Ecum Secum properties by late summer or early fall.

Scotia Prime is a wholly-owned subsidiary of Fort Worth-based Petroco of Texas, whose other holdings have included an oilfield equipment sales company, an oilfield cementing company and an oil exploration and production company. Petroco is currently participating in the construction of an ethanol refinery in Louisiana. Petroco’s shares are traded on the Calgary exchange. Petroco’s interest in N.S. gold evolved from the experience of some of the company’s directors in gold exploration in Canada, Australia and the U. S.

Scotia Prime’s activities will be guided by Craig Miller, who will become the company president in June. For the past two-and-a-half years, Mr Miller has been contracted to the provincial mines department to document and evaluate Nova Scotia’s gold potential.

Coxheath Gold Holdings of Bedford, N.S., has completed 3,000 ft of underground work on its Tangier, Halifax Cty., gold property. The company has carried out drifting, raising and crosscutting and has brought 2,500 tonnes of potential ore to the surface for bulk testing.

Coxheath’s sample preparation laboratory is now running fulltime, handling 1,300 kg of sample a day. The sample is crushed, pulverized and put through a Knelson concentrator. President Michael Riddell says assays are slow coming back, but results should be available soon.

The next stage of Coxheath’s program is expected to cost $5 million and will cover more underground work at Tangier, including the opening of a second level, stoping and an additional bulk sample of up to 24,000 tonnes. Work will start as soon as approvals are received from government regulatory agencies.

New concepts and interpretations of gold mineralization in Nova Scotia were offered at the recent gold workshop presented by N.S. department of mines and energy geologists in Halifax.

Models for Meguma gold presented by Paul Smith and Dr Dan Kontak showed the importance of structure, stratigraphy and alteration in these deposits. Meguma gold is not saddle reef in nature, as is widely believed.

In the geochemical session, the significance of a government lake sediment survey over rocks of the Meguma Group was explained by Dr Peter Rogers, who emphasized that widespread gold anomalies were found in lakes underlain by granitic rocks.

Ralph Stea discussed the usefulness of till geochemistry in exploration in the province, and Craig Miller outlined the success he has had with humus geochemistry in gold exploration in Nova Scotia.

Mph Consulting’s David Jones presented results of geophysical surveys conducted over Seabright Resources’ Beaver Dam deposit and the Greenstrike Resources-Pan East Resources gold property at Fifteen Mile Stream.

Muscocho Explorations has agreed to spend $2.5 million on an assemblage of 1,647 claims held by Noranda on Newfoundland’s Baie Verte Peninsula.

Muscocho must spend the money by the end of 1989 and, in return, Muscocho and its associated company, Tashota-Nipigon Mines, will earn a 50% interest in the property.

Noranda discovered gold mineralization in the Ming’s Bight area last year and conducted geochemical surveys which identified anomalous gold values in other areas, including the claims in the Muscocho agreement.

Other exploration programs planned for Newfoundland this summer will be carried out by Dolphin Explorations on its Cape Ray property and by Westfield Minerals in the Baie D’Espoir area. Activity is also expected in western White Bay and around the Hope Brook mine.

Ian McAvity, editor of the Deliberations market letter, spoke recently in Halifax. Members of the audience paid $10 to hear him, but received a dollar coin in return. Mr McAvity began his talk by asking the audience how many had received a silver dollar as they entered. After several people indicated that they had, Mr McAvity pointed out that the dollar was not actually silver, but nickel.

“If you had gotten silver dollars in 1966 — the last time they were made of silver — each silver dollar would be worth about $7 today,” he said. “But paper dollars held since 1966 are worth only 27 cents today.” He used the illustration to demonstrate that precious metals are a good hedge against inflation. Mr McAvity presented an economic analysis for the U.S. and Canada and predicted that gold would break the $500 U.S. mark before year-end.

Mr McAvity also promoted the mvp Exploration fund, of which he is chief executive officer. He pointed out that mvp will be investing in three junior Nova Scotia gold exploration companies: $3,000,000 in Acadia Mineral Ventures, $3,000,000 in Northumberland Mines, and $760,000 in Torene Gold Explorations.