Aur eyeing production and big profits in 1988

Debt free and possibly into gold production by spring, 1988. No wonder James Gill, president of Aur Resources, was in an upbeat mood when he recently chaired his company’s annual meeting.

The junior exploration company has released fresh results of underground drilling completed on the Kierens zone gold deposit on its First Canadian property approximately 10 miles west of Val d’Or in northwestern Quebec. And the figures were attention-grabbing.

Muck samples from the first 75 ft of drift east of the shaft average 0.85 oz gold per ton over the full drift width of eight feet. Drifting is continuing in similar-looking vein material and has reached 150 ft east of the shaft.

In all, 66 holes have been drilled to date on the property, with a weighted average grade of 0.41 oz over an average width of 11.7 ft. Drill results indicate the gold content of the Kierens zone deposit is increasing below a depth of 500 ft and also that the potential is high for outlining ore reserves in excess of 1.5 million tons grading at least 0.30 oz. The zone deposit remains unexplored below 1,000 ft.

Aur plans to deepen the shaft from its present 750 ft to 1,400 ft, drifting on the 1,300-ft level to provide a platform for 30,000 ft of additional diamond drilling, as well as drifting in the ore zone. Mr Gill said this new program, to cost $4 million, will begin in early March and has the objective of establishing ore reserves of approximately 1.5 million tons above a depth of 1,600 ft.

Emphasizing that feasibility studies are continuing, Mr Gill said Aur could expect a profit of $20 million from its Kierens property after the first year of production, based on a gold price of $400(US). He said he expects the company could pay off all its capital costs for the project in one year.

Aur’s First Canadian holding is located next door to its Norlartic property, a former mine site at which Aur has also undertaken exploration work. When the final decision is made to go into production on the Kierens zone, existing development on the Norlartic side should provide the company with quick access. Aur and Cogesco Mining Resources are undertaking a joint exploration program on the Norlartic site, with Cogesco claiming a 30% interest in the property.

Exploration expenditures in 1986 by Aur totalled more than $16 million. Fourteen of the company’s 31 properties (all in Quebec) were explored last year; in addition to the major First Canadian Kierens zone find, new gold deposits were discovered on the Airport and Hewfran claims, as well as more Norlartic reserves.

Last year saw the company make money for the first time; its pre-tax profit was $1,417,660 (18 cents per share). Aur repaid a $1.5-million loan, leaving it debt free, and with a working capital of more than $2.5 million. (Aur’s fiscal year runs from September to September.)

An Aur subsidiary, Techdel International, which develops and produces surveying equipment for the mining industry, boosted its revenue by 128% last year. Commercial production for the subsidiary’s Rotodip inclinometer began last September and marketing started for the Light Log survey system, the diamond core and rock saw as well as the Rotodip instrument.