Coniagas to earn its way on northeast Ontario project

The latest round of drill results at Garrison Creek Consolidated’s 40%-owned Michaud property near Matheson in northeastern Ont., were released recently.

As part of a plan to “earn its way into” a property which has been in Garrison Creek’s portfolio for a number of years, The Coniagas Mines’ group is spending $1,340,000 on a 2-year exploration program executed by Falconbridge Ltd.

Previous drilling at Michaud has indicated one million tons of 0.09 oz gold per ton.

As operator and 60%-owner of the 90-claim gold property, Falconbridge decided to take a fresh look at it in 1984. Following an agreement signed in August 1987, Coniagas is funding the 2-year program to earn 2,680,000 shares of Garrison Creek at 50 cents per share.

Toronto-based Garrison Creek is a 62.7%-owned subsidiary of Falconbridge while Coniagas holds a 17.7% interest in the former company.

Under the agreement, Coniagas has the option to earn an additional 1,920,000 Garrison Creek treasury shares by spending $960,000 on a follow-up program.

If Coniagas completes the second phase of exploration, it can acquire Falconbridge’s 62.7% interest (1,756,996 shares) in Garrison Creek. As a result, Coniagas would hold 90.25% of Garrison Creek’s outstanding shares.

If Coniagas elects not to follow up on the current program, the agreement allows Falconbridge an option to spend $1 million on exploration at Michaud to earn two million Garrison Creek shares.

Regardless of what Coniagas decides to do, when the second stage of exploration at Michaud is complete, Garrison Creek and Falconbridge will embark on a joint venture to explore the property.

The results, which follow are from surface drilling on the western extension of the Ludgate zone which has been drilled on a number of occasions.

Hole M 133-02 intersected a 14.8 ft core length of 0.09 oz gold at a depth of between 87.5 ft and 102.3 ft. Hole M 133-03 cut 10 ft of 0.11 oz at between 333 ft-343 ft.

Hole M 133-04 intersected 23.1 ft of 0.41 oz at a depth of 126.4 ft and 149. 5 ft. Hole 133-06 also cut 5.1 ft of 0.36 oz at the 220 ft level.

According to Garfield Heyes, vice-president corporate relations, The Coniagas Mines, these results indicate that the property could be open pitable. “But it’s still too early to tell,” he said.