EXPLORATION ’87 CANAMAX

Exploration expenditures for 1987 are budgeted at $11.5 million as Canamax’s share on five key gold projects and grassroots exploration projects in three provinces and both territories.

In central Canada, the Bell Creek property will be the subject of $1 million in exploration, mainly on the Marlhill deposit where 439,000 tons grading 0.23 oz gold per ton have been delineated to date. Seventy-five per cent of this expenditure will be spent on an underground exploration program at Marlhill while the remainder is earmarked for drilling to expand the Marlhill reserves. Mining on the Bell Creek North zone began at the beginning of this year.

At the Kremzar project, near Wawa, Ont., winter exploration on numerous showings within the 5,500 acres held by Canamax is under way in a $450,000 diamond drilling program. A number of these showings exhibit structural and lithological similarities to the main deposit of one million tons grading 0.25 oz per ton (cut and undiluted).

At the Matheson project, in Harker- Holloway Twp. a $2.6-million underground exploration program on the East zone is slated for the spring. The intent of the program is to confirm the grade and continuity of the deposit while testing its mining characteristics. An $800,000 drilling program will focus on the Mattawasaga zone, which is the eastern extension of Barrick’s Holt-McDermott mine, in addition to further drilling on the East zone to expand reserves.

The Clavos project will continue drilling along the Pipestone Fault where encouraging mineralization has been delineated in two areas. A total of about $650,000 will be spent in 1987.

About $1.5 million is earmarked for less advanced projects in joint venture with Bruneau Mining Corp. These include the Detour joint venture operated by Queenston Gold Mines, the Allard River project where encouraging indications of gold resulted from a 1986 overburden drilling program, and the Mannville joint venture with Queenston.

Canamax’s $2.3-million exploration emphasis in western Canada will be focussed primarily on outlining additional reserves on the Ketza River property and on adjacent mineral claims owned or held under option by Canamax.

On the Ketza property, owned by Canamax and Pacific Trans-Ocean Resources, proven, probable and possible reserves for the Peel and Ridge zones have been estimated at 543,000 tons of oxide ore grading 0.5 oz gold per ton (uncut and undiluted).

Exploration and definition drilling is planned in 1987 on possible extensions of the Peel and Ridge zones and on three additional zones on the Ketza River property: the Break zone, where drilling in 1986 partially outlined a pipe-like oxide deposit with drill-indicated reserves of 46,000 tons at a grade of 0.49 oz gold per ton to a drill depth of 200 ft; the Shamrock zone, where surface talus samples returned numerous assay values in excess of one ounce gold and up to 30 oz per ton; and Fred’s vein, 1,600 ft in strike length and up to 40 ft wide, where channel samples have returned up to 0.21 oz gold per ton across five ft.

North and south of the Ketza property, a preliminary evaluation will be conducted of five separate claim blocks under option from High River Resources and Quillo Resources. The properties contain widespread gold and silver soil geochemical anomalies and a possible northern extension of the Shamrock zone on the Ketza property. Also in this area, 4,000 ft of core drilling is planned on the Iona Silver property, under option by Canamax from Iona Industries. The main exploration target for 1987 is the Saddle vein where surface grab samples in 1986 returned up to 1.3 oz gold per ton.

Canamax has recently concluded option agreements on two properties in the Northwest Territories. At Mosher Lake, 70 km west of Yellowknife, Canamax plans to conduct 3,000 ft of core drilling on the Mos claims, under option from Roxwell Gold Mines. The drill program will test possible extensions of a wide and persistent quartz vein zone on which previous drill holes returned intercepts of 0.13 oz gold per ton over 60 ft and 0.1 oz over 130 ft.

At Clan Lake, 60 km north of Yellowknife, 2,500 ft of core drilling is planned to test a number of gold- bearing quartz vein zones. The best zone to date, the No. 1 zone, yielded a 1,100-ton bulk sample in 1967 which assayed 0.42 oz gold per ton.

Finally Canamax plans a $1.6- million expenditure to complete its feasibility study on the Manitoba potash project. Canamax owns 51% of this deposit with the government of Manitoba holding the remaining 49%. This project is the only exploration expenditure by Canamax not oriented to gold, yet it holds great promise for long-term revenue potential for the company.