McDonald continues Noramco saga by optioning Pickle Crow to

Bruce McDonald has kept a low profile since selling Noramco Mining (TSE) and its portfolio of junior companies to Breakwater Resources (TSE) several years ago.

As it turned out, Breakwater had to write off most of its investment in Noramco after a post-purchase review found that reserves at its mines and advanced exploration projects were grossly overstated.

During the past year, however, McDonald regained control of the Noramco group by buying shares of the bargain-basement-priced juniors on the market. Other shares were acquired through an agreement with Breakwater and a November, 1991, rights offering.

McDonald has since sold off some of the juniors, while others have been reactivated. More recently, Noramco signed an agreement allowing Odyssey Mining, a private company, the right to acquire 100% of Noramco’s interest in a lease on the Pickle Crow property in northern Ontario. Under the terms of the option agreement, Odyssey will make staged payments totalling $1.2 million for the acquisition.

Odyssey President Richard Good told The Northern Miner the company hopes to bring the former producer back into production, using either custom milling or by rehabilitating a mill in the district, or by installing a portable mill on the property. But Good said the company will first wait for an audit and report by Watts Griffis and McOuat (WGM) which is expected to be completed by mid-September.

The Pickle Crow mine produced almost 1.5 million oz. during 1933-1966, primarily from narrow veins (iron formation mineralization was too metallurgically complex for mills at that time).

In the late 1980s, Noramco spent more than $9 million exploring the former producer, with work including 151,000 ft. of surface drilling in 286 holes and 30,000 ft. of underground drilling in 79 holes.

Noramco released a number of reserve estimates, the largest being 6.3 million tons grading 0.21 oz. gold per ton in all categories.

But after Breakwater acquired control, WGM carried out an independent estimate that found the project has total shallow and intermediate reserves (diluted) of 1.39 million tons grading 0.18 oz. gold per ton.