EXPLORATION ’87 NORANDA

Noranda Exploration (or Norex), the exploration arm of Noranda Inc., will probably spend more on exploration work this year than any other mining company. Last year Norex kept an average of 30 diamond drills going throughout the year on 106 properties. This year $30 million is expected to be budgeted by the company for work on active projects, covering about 2.5 million acres in North America. About 80% of that will be spent searching for new gold mines and the remaining 20% will go to finding mineable base metals deposits in areas where Noranda already has infrastructure for the mining and milling of base metals.

If the company’s joint venture partners spend the same as they did in 1986, Norex properties should be exposed to about $47 million in exploration expenditures this year. “Our objective is to hit the $50-million mark in 1987,” says President John Harvey from his Toronto office. Norex has 160 full-time employees and more than 320 during the summer field season.

The mine-operating arm of Noranda Inc. will spend an additional $7 million on exploration work in the immediate area surrounding its base metals mines at Geco, Mattabi, Lyon Lake, Matagami Lake and Gaspe. Last year Norex picked up a total of 1.45 million acres of new ground and dropped about 1.5 million acres. Of the ground picked up, 700,000 acres (about half) was acquired through option agreements with property vendors, including junior companies and individual prospectors. Of 695 property submissions made to the company, 332 warranted field examination by company geologists; of those, 55 properties were eventually optioned, for a success rate of about 8%.

Of the company’s 264 active projects, 30 will receive about 20% ($9 million) of the company’s annual expenditures. Five are considered probable mines. In order of priority, these properties are:

* Two adjacent gold properties in the Noranda area of northwestern Quebec — the Ribago and the Waite Beauchastel properties. Prefeasibility studies are in the works and a production decision is contemplated this year, Harvey says.

* The Stratmat base metals property in New Brunswick, which was optioned from Cominco in January, 1986. Definition drilling and a feasibility study this year could possibly allow a production decision to be made in 1988.

* The Tundra gold property, northeast of Yellowknife, N.W.T. More deep drilling is planned for 1987 to assess known zones of gold mineralization.

* A uranium property at Eagle Point, Sask. Noranda holds a 1/3 interest in this property together with Eldorado Nuclear and smdc.

The next group on Norex’s list of its top 30 properties includes 19 properties where drilling has intersected economic grades and where the potential exists to outline economic tonnages. These potential mines include:

* The 100%-owned Don Rouyn property in the Noranda camp, where the extension of the Ribago-Waite Beauchastel (Silidor) structure is being tested at depth.

* The formerly producing De Santis gold mine in Ogden Twp., southwest of Timmins, where Noranda (50%) is working with Stan West Mining Corp. (50%) and Canacord Resources (which has an option to earn 33.3%) to dewater mine workings and carry out underground exploration work this year. Possible reserves stand at 298,000 tons averaging 0.17 oz gold per ton.

* The Goliath and Golden Sceptre properties in the Hemlo area will be actively explored this year by Hemlo Gold to seek additional deposits.

* At the Arntfield property, in the Noranda camp, Norex and Cogesco Mining Resources will carry out diamond drilling at depth to extend new gold mineralization outlined in 1986.

* Deep diamond drilling will also be done on the Half Mile Lake property, in northern New Brunswick, to further outline a base metals deposit there together with partners Canacord and Brunswick Mining & Smelting. Possible reserves stand at 8.5 million tons grading 0.08% copper, 2.47% lead, 7.79% zinc and 0.67 oz silver per ton.

Four additional properties in the U.S., four in B.C., three in northwestern Quebec/northeastern Ontario and three in Newfoundland are also classified by Norex as potential mines. Norex has seven properties it calls “hot prospects.” No economic results have been intersected on these properties, but encouraging results indicate they can be upgraded to potential mines this year. “We are striving to shorten the lead time for bringing a property to the production stage,” Harvey says.

Norex has 18 district offices in North America, reporting to seven division managers, who report to three regional managers. A total of 12 field offices recieve property submissions.