Nuinsco drill program at Rainy River gold project

Drills have begun turning on Nuinsco Resources’ (TSE) Rainy River gold project in northwestern Ontario.

The program will test targets outlined by geophysical, geochemical and geological surveys.

The Rainy Lake region contains one of the largest relatively unexplored Archean greenstone belts in Canada. This lack of exploration activity is largely due to the abundance of patented land and thick overburden. Encouraged by the results of its own research and by information from government reports outlining gold anomalies in glacial tills, Nuinsco set about acquiring all Crown lands available for staking, together with a large number of patented parcels. The company now controls the mineral rights to more than 52,000 acres in the region.

In 1993 and 1994, Nuinsco drilled several widely spaced overburden holes in the southern and eastern portion of Richardson Twp., outlining anomalous gold values in both bedrock and a glacial till horizon. The physical characteristics of the anomalous gold in the tills suggest a nearby bedrock source.

Nuinsco President Douglas Hume tells The Northern Miner that his company is budgeting $1 million for diamond drilling over the next year. He also plans to spend $400,000-$500,000 on regional reconnaissance overburden drilling. The initial overburden program, scheduled to begin after freeze-up, will consist of 150 reverse-circulation holes designed to obtain samples from glacial debris and bedrock. According to Hume, the drill program will pick up where the previous government survey left off.

In accordance with a March, 1994, letter-of-intent, Western Troy Capital Resources (ASE) has been invited to earn a 10% working interest in the exploration program in Richardson Twp. only. Terms and conditions of a definitive agreement are expected to be resolved shortly.

At present, no work is contemplated on Nuinsco’s Cameron Lake gold deposit until later in 1995. The company has upgraded the road access to the mine site, and camp buildings are being refurbished. The deposit has a proven, probable, and possible reserve of 3.1 million tons grading 0.18 oz. gold per ton.

On the corporate side, a material change in control occurred Nov. 8, when the Ontario Securities Commission (OSC) granted a ruling permitting the distribution of Nuinsco shares held by Deak International Resources Holdings to a group of 33 individuals.

This transaction involves the distribution of 9.6 million Nuinsco shares, some of which will be issued to exercise the company’s May, 1993, option on certain properties owned by the Rainy River Grubstake Syndicate. The shares will be exchanged for the Syndicate’s interest in its mining claims. Also, in accordance with the option agreement, 250,000 treasury shares and a 2% net smelter return royalty will be issued to the Syndicate’s original prospectors. About 85% of the distributed shares will be held by directors, officers and other company insiders who, without pooling or voting agreements, will hold shares for investment purposes. The OSC ruling prohibits trading in these securities for a period of 12 months.