Seabright subsidiary fishes for gold in Nova Scotia

While fish is still considered Nova Scotia’s most valuable natural resource, Seabright Explorations is hoping to net a fortune in the province’s reactivated gold mining camp.

At presstime a final prospectus was expected to have been filed by the company, an 85%-owned subsidiary of Seabright Resources, for a national offering of flow-through and common shares with half- warrants.

The offering is expected to raise $14 million. It consists of 1.4 million equity units (a unit being one common share and one half- warrant) priced at $4.30 each, and 1.3 million flow-through units priced at $6.25. A listing on the Toronto Stock Exchange is expected by the end of March.

The proceeds will be used to further explore and develop the company’s gold properties in Nova Scotia, including its Caribou, Moose River and Highland properties.

Seabright Resources has transferred to the subsidiary all of its exploration properties except the Beaver Dam and Forest HIll gold properties, also in Nova Scotia. Production on these two properties is expected in early summer. CARIBOU

Seabright Explorations holds an interest in 173 claims, covering 6,920 acres, on the Caribou property, in Halifax Cty. About 70,000 tons grading 0.25 oz gold per ton is readily accessible from the shaft of the old Holman mine, President Terence Coughlan told a group of investors in Toronto last month.

From 1933 to 1947 the Holman mine produced 44,375 oz of gold from 92,753 tons of crushed ore grading 0.478 oz. The mine stopped production in 1949. But in 1983 Golden Caribou Explorations dewatered and refurbished the shaft to the 800-ft level.

Seabright plans an extensive exploration program on the property, including further dewatering the Holman shaft, followed by mapping and sampling of underground workings and underground diamond drilling.

Bulk samples will be processed at the mill in Gays River which, together with a lead/zinc mine, the parent company bought from Esso Minerals last year. The mill, which is capable of processing 15,000 tons per day, was picked up for only $3.6 million. To build a comparable facility today would cost $26.6 million, according to Kilborn Ltd., an engineering consulting company (N.M. Feb 23/87).

Mr Coughlan told The Northern Miner that the mine at Gays River is a good asset but that it isn’t going anywhere. “However, as soon as the market for zinc improves, we’ll consider reopening the mine,” he said. “We would have to be assured of a stable price over 2-3 years before we could justify the capital expense (of re-opening the mine).” MOOSE RIVER

Seabright holds 45 claims, covering 1,800 acres, at the Moose River property, also in Halifax Cty. Sixteen drill holes have been completed in the area of the Higgins and Lawlor mine.

Probable reserves in the Higgins and Lawlor area have been calculated as 73,190 tons grading 0.20 oz gold per ton; possible reserves, as 37,500 tons grading 0.20 oz. These reserves were established only on ore zones where continuity could be determined. Diamond drilling is continuing on the property and additional drilling and surface exploration has been plann ed for 1987. Underground exploration is also planned for the Higgins and Lawlor zone. HIGHLAND

Seabright Explorations has acquired a right to earn a 50% interest in 304 claims on the Highland property by spending $500,000. The property is in Guysborough Cty., N.S. Diamond drilling and surface exploration will continue in 1987 — mainly in the area of the Highland shaft, which was put down in 1946.

The company has more than $2.5 million in liquid assets, with 4.7 million common shares both issued and to be issued.

Mr Coughlan said the Gays River mill has put the company in a strong financial position. “We won’t be faced with large capital expenditures in order to provide processing facilities.”

There are now about 20 companies doing exploration work in Nova Scotia, he said, adding that projects by Seabright and other companies will exceed $60 million in 1987. “What you are seeing is another exciting gold camp developing in Canada,” he told the meeting.

The parent company has yet to make a formal production decision regarding its properties. But Mr Cougland said the Beaver Dam property is expected to be in production by June or July and that the Forest Hill property should be producing by May.