EXPLORATION ’87 BELMORAL

The $15 million Belmoral Mines will spend on exploration in 1987 is about evenly divided between its Val d’Or and Timmins camps. The strategic exploration plan calls for the company to solidify existing operating mines by finding and developing new ore reserves and to reduce dependency on the Bourlamaque batholith.

Belmoral, debt-free, with money in the bank and substantial cash flow, has demonstrated its ability to judiciously use flow-through funds. In addition to the successful Wrightbar project (35% Belmoral), two Timmins projects initiated and managed by the company — Vedron (40% Belmoral) and Broulan (50% Belmoral) — will be testing major proven structures during 1987 with demonstrated potential at least equal to the main shears in the Bourlamaque batholith. Initial production from these projects could be processed at the Val d’Or mill, but sufficient tonnages may justify a new mill in Timmins. More than 90% of the property held by the company in the Val d’Or area is underlain by the Bourlamaque batholith. Total exploration expenditures for the camp in 1987 will be $6 million. Twelve targets have been established.

Underground drilling at the Ferderber and Dumont mines is expected to total 65,000 ft and 50,000 ft respectively. This program should expand the knowledge of both ore structures on strike and by 1,000 ft at depth. The total area to be explored in 1987 will exceed all the area mined and explored so far on the main shears.

The Wrightbar property, where Belmoral Mines is the operator, is now being explored. The ore indicated by close diamond drilling amounts to 131,100 tons averaging 0.264 oz gold per ton. Ore of all other categories amounts to 173,500 tons for an overall total of 304,600 tons averaging 0.227 oz gold per ton after dilution of 25%. About 8,000 ft of surface drilling is planned for 1987 at Wrightbar, mainly along the granodiorite-volcanic contact. Underground diamond drilling will proceed commensurately with the development and is expected to total 10,000 ft in 1987. Some drilling will be done to test the main ore structures for a possible downward extension to 1,000 ft. Previous drilling extended to a depth of only 600 ft.

Belmoral has exercised its option to earn and maintain a 50% interest in the Broulan Resources properties in Timmins. Broulan holds 56 claims in Whitney Twp. and 12 claims in Murphy Twp. Belmoral can earn a 50% interest by spending $2.3 million in addition to $200,000 already spent. A 1987 program totalling $9.8 million is planned. The companies plan to finance the balance of the program through a new company. Belmoral intends to subscribe for 50% of all flow-through shares to be issued and estimates its 1987 expenditures on this project to be $6 million. The objective is to identify 1.75 million tons of ore with grades similar to the nearby Hallnor mine, which has an average grade of 0.42 oz gold per ton, or Broulan’s Reef mine (0.25 oz gold per ton). Work will concentrate on the volcanics between the two mines through a deep underground exploration program and will drill-indicate one million tons of near-surface ore in the sediments, at grades of 0.12-0.15 oz gold per ton. The surface program will test the potential between the old workings of the Reef and Bonetal shaft areas.

Meanwhile Vedron has gone underground on its Timmins property. The main ramp has reached the 740-ft mark where a crosscut has been started. It will connect with existing workings in the old Edward mine. The Edward shaft was decapped and rehabilitated and workings on the 150-ft level are being resampled. The underground program is expected to outline at least 500,000 tons of ore with an average grade of 0.20 oz gold per ton to the 500-ft level. Belmoral lent Vedron $1.1 million to repay outstanding debts originally used to acquire the Timmins property. The loan is secured by the properties themselves and is repayable out of first production proceeds. Belmoral has also agreed to fund a ramp program costing $3.2 million in flow-through funds in exchange for shares which will give Belmoral effective control with up to 39% equity interest in Vedron. Belmoral is manager of the project and has three of seven directors on Vedron’s board.

In the Missanabie, Ont., area Belmoral is spending $500,000 with Canreos Minerals to investigate 20 gold showings along a 5-mile-long shear zone.