Goldex, Ormico confirm large, low-grade deposit

When Goldex Mines (TSE) and Ormico Exploration (ME) agreed to launch a $2-million, underground drilling program on their Val d’Or property in January, they hoped to prove the presence of a multi- million-ton, low-grade gold deposit. Recent drilling results are doing just that. Halfway through the drilling program, Goldex has intersected several wide zones of low-grade ore on the eastern side of the “Goldex Extension zone.” Hole 12-102 entered mineralization at 825 ft. and was still intersecting low-grade veining at the drill limit of the machine, 2,500 ft. below surface. Results from this hole include a 725-ft. section grading 0.08 oz. gold per ton.

Two other holes drilled on the eastern extension intersected higher- grade zones containing visible gold. Core from hole 12-106 contains a 96-ft. zone grading 0.16 oz. Approximately 200 ft. below this zone, at 870 ft., hole 12-108 intersected 127 ft. grading 0.21 oz. In all cases high-grade values were cut.

At the company’s recent annual meeting in Toronto, chief geologist David Rigg said drilling to test the western extension and dip continuance of the zone was not as successful. Both holes testing downdip extensions were abandoned without crossing the Main zone, while the best intersection from the western extension returned 0.06 oz. gold over 420 ft.

Goldex holds a 60% interest in the property and Ormico holds the remaining 40%. Agnico-Eagle Mines (TSE), operator of the current drilling program, owns a 26% interest in Goldex.

The current program is testing extensions of a gold-bearing granodiorite body sitting between 1,600 and 2,450 ft. below surface, approximately 1,500 ft. east of the Goldex shaft. Goldex is using established infrastructure (shafts, drifts) to verify the extension. The property’s geologic and structural setting is similar to Goldex’s Dubuisson property next door, and to the nearby Sigma and Lamaque mines. In all cases, the granodiorite host rock is cut by swarms of closely spaced, irregular quartz- tourmaline veins.

Despite extensive drill testing, gold prices have never been high enough to justify mining the low- grade Dubuisson orebody. The last attempt to bring the deposit to production was abandoned in 1988, when a bulk sample returned uneconomic values.

Preliminary reserve estimations on the Goldex extension suggest that the zone contains about 11.4 million tons grading 0.08 oz. Proven reserves at the Dubuisson property total 857,51 tons grading 0.073 oz.

The market seems to be favoring Ormico and Goldex stock. Before the dramatic drop in the gold price on March 26, Ormico stock had moved up 10 cents since the beginning of March to $1.70. Over the same period, Goldex shares moved up 40 cents to $4.40.