MINING IN CANADA — Norcal and Gold Giant assess results at Norgiant — Partners encouraged by high-grade float at Aurville project

Operator Norcal Resources (NLR-V) and equal joint-venture partner Gold Giant Minerals (GNR-V) have completed their first phase of exploration drilling at the Norgiant project, situated 150 km northeast of Val d’Or, Que.

Norgiant has its genesis in work performed by privately held Overburden Drilling Management in 1996. Overburden remapped a 300-sq.-km area as a volcano-sedimentary belt belonging to the Abitibi geological sub-province, rather than the Grenville province — the Abitibi being the more prospective province, by far, for lode gold and massive sulphide deposits.

Norcal and Gold Giant staked 1,972 claims in order to cover the entire belt, which is characterized by a gold-in-till anomaly that coincides with a regional magnetic anomaly related to iron-formation and komatiitic horizons.

In order to define drill targets, the partners spent much of 1997 carrying out a grassroots exploration program (managed by Overburden) consisting of prospecting, geological mapping and both ground and airborne geophysics. The program defined 77 electromagnetic (EM) anomalies, and found sulphides occurring in three settings: primary sulphide-facies iron formations; primary volcanogenic zinc-copper-lead mineralization associated with felsic tuffs; and sulphidized gold-bearing shear zones.

The partners’ 1,850-metre drilling campaign, the first-ever in the area, consisted of 16 diamond-drill holes that tested EM conductors in seven separate grids spread out over 30 km. All 16 holes intersected sulphide mineralization, ranging in character from disseminated to massive and in width from 1.7 to 10 metres.

The sulphide mineralization in the intersections consisted mostly of pyrrhotite and pyrite, with the best base and precious-metal values grading only 0.07% copper, 0.14% lead, 0.36% zinc, and 0.23 gram gold per tonne.

This compares with grab samples taken last fall, which graded as high as 0.13% copper, 0.7% lead, 2% zinc and 48.1 grams gold per tonne.

“What we’ve found is that it’s no longer a concept play — we are in the right rocks,” says Norcal President Bruce McLeod. “We certainly got some sniffs but there’s nothing in there that you could even pretend was close to economic. Now it’s a question of what do we do to find an orebody.

“We know drilling the EM anomalies works,” continues McLeod. “Everything we drilled was bedrock sulphide — we didn’t run across conductive tills, lake-bottom sediments, graphitic horizons or a lot of the things that EM anomalies in that part of the world can give you. But we’ve got so many EM anomalies that we’ve got to filter them out better than we’re doing now. If we drilled every one of them, we’d be successful, but we can’t afford that.” McLeod says that while Norcal concentrated on EM anomalies during the first phase of exploration (though many have yet to be explained or even visited), the upcoming phase of work will be geared more towards gaining an understanding of the area’s structural setting.

Norcal has hired consultant Howard Poulsen, an Archean geologist who recently retired from the Geological Survey of Canada. He will review all of Norcal’s efforts to date — including prospecting, geophysical surveying, drilling, whole-rock analysis and thin-section work — and turn in a final report by mid-May.

Currently, Norcal is processing geophysical data and tracing some of the productive breaks, both from the north and the west.

The partners are planning to continue work on grid areas 44 and 60 and at numerous other untested targets. Preparation is under way for an extensive surface program this summer, including mechanical trenching, prospecting, and mapping.

“As a junior, the tough part of this business is you don’t have an indeterminate length of time to be successful,” says McLeod. “At the most, we’ve got about two years left where we can still keep the attention of people, so we’ve got to be pretty aggressive. We’re on the right track; it’s just a matter of when.”

Norcal has now earned its half-interest in the Norgiant project by spending $300,000 on exploration and issuing 100,000 shares to Gold Giant. All expenditures at Norgiant are now being shared equally between the two partners.

The Norgiant property is subject to a 2.5% net-smelter-return royalty payable to Overburden.

Meanwhile, at its nearby Aurville project, Norcal is encouraged by the discovery of high-grade gold and silver within a metre-wide boulder found in a clear-cut area.

A semi-massive mineralized portion of the boulder graded 4.5 oz. gold per ton and 2.7 oz. silver per ton, while a stockwork-mineralized portion ran 9 oz. gold and 2.9 oz. silver. The semi-massive portion is dominated by chalcopyrite, while the stockwork is dominated by chalcopyrite and sphalerite.

The boulder is angular, suggesting its source is nearby, and consists mainly of silica and sulphides in an intermediate volcanic host rock. The bedrock underlying the boulder consists of hydrothermally altered volcanics consistent with the geology of the boulder.

Since the boulder’s discovery, the vicinity has been gridded and geophysically surveyed. Several nearby geophysical anomalies are scheduled to be prospected and trenched in May, as soon as weather permits.

Situated 5 km south of the Norgiant property, the Aurville project consists of 126 claims covering a suite of hydrothermally altered felsic volcanics containing gahnite and disseminated sulphides. Gahnite is a zinc aluminum oxide with a spinel structure that serves as an indicator mineral for metamorphosed volcanogenic-massive-sulphide mineralization.

The Aurville project is a joint venture between Norcal (40%), Gold Giant (40%) and Castle Rock Exploration (CTP-V) (20%), with Norcal as operator.

For the fiscal year ended Dec. 31, 1997, Norcal lost $448,095 (or 6cents per share) on revenues of $8,345. This compares with a loss of $93,814 (2cents per share) on revenues of $40,518 during 1996. By the end of 1997, Norcal had a deficit of $6.15 million.

As of March 2, 1998, Norcal’s cash position was $1.12 million.