Golden Rule buys Jolu mill for eight La Ronge deposits

In a bid to move its Saskatchewan gold deposits closer to production, Golden Rule Resources (TSE) has agreed to purchase the Jolu mine and mill assets near La Ronge, Sask., for $786,000.

Owned by a 70-30 joint venture consisting of International Mahogany (TSE) and a unit of International Corona (TSE), the Jolu project is in the final phases of decommissioning. The 450-ton-per-day mill, which maintained average recoveries of 97% during its 3-year operation, processed its last ore in August, 1991.

Golden Rule and its associated companies own varying interests in eight deposits along the La Ronge greenstone belt and within a 30-mile trucking distance of the Jolu mill. They include the Tower East deposit with preliminary reserves of 1.02 million tons grading 0.2 oz. per ton and the Komis deposit, where preliminary reserves stand at 562,000 tons grading 0.44 oz. per ton.

“With the gold price having shown signs of life, it was a business decision to take a gamble on the mill,” says president Glen Harper. He said Golden Rule had to move quickly or risk losing the mill altogether under the owners’ plans to sell it off piece by piece.

Golden Rule has paid a deposit of $50,000 for the assets.

Drilling is scheduled to begin on the Komis deposit, owned by affiliate Waddy Lake Resources (TSE), at the end of September. The work will be financed by the partial proceeds of a recently-completed rights offering expected to raise proceeds of $1.06 million.

Under the offering, Waddy will issue 5.3 million units, each unit consisting of one common share and one half of a warrant. Each warrant entitles the holder to subscribe for one common share of Waddy at 30 cents per share. Golden Rule has subscribed for 4.1 million units to give the Calgary-based company a 53.5% interest in Waddy.

If Waddy is able to confirm the grade and continuity at Komis, says Harper, a ramp will likely be driven into the shallow deposit after Christmas. In another development, the Toronto Stock Exchange has accepted notice of a renegotiated private placement of 2.38 million units of Tyler Resources (TSE) with Golden Rule at 21 cents per unit. Proceeds of $500,000 will be used to explore Tyler’s diamond properties in the Lac de Gras area of the Northwest Territories.

Tyler says preliminary results from airborne surveys indicate that there are several geophysical anomalies on both the Carat and Crystal properties that may represent kimberlite pipes. Crews are scheduled to begin geochemical surveys on the higher priority areas before the end of the month.