$9.8 million earmarked for Broulan property

A $9.8-million exploration program, most of it earmarked for underground work, is scheduled by Belmoral Mines over the next 14 months for the area between the old Reef and Hallnor mines in Timmins, ground currently held by Broulan Resources.

Belmoral, which has already spent $200,000 on the property, can earn a 50% interest by spending a further $2.3 million. The property will then be vended to a new company to be formed by Belmoral and Broulan with each of them, in return, gaining a 50% interest in the new company.

The new company will raise the remaining $7.5 million through flow-through funding. Belmoral is committed to buying half of those shares in order to maintain its 50% interest in the new company. That will bring Belmoral’s expenditures on the property to about $6 million.

Broulan does not plan to take any of the flow-through shares and will be diluted to about a one-third interest in the new company.

Belmoral has already made arrangements to raise $15 million in 1987 by placing flow-through shares with CMP 1987 Resource Partnership with about half slated for two projects in Timmins.

Belmoral, the operator, says Revenue Canada has ruled that flow- through funds can be used for the underground exploration program planned for the property. On the basis of that ruling and recent encouraging surface drilling results, Belmoral made its decision to continue with the project.

Three major intersections from the surface drilling included:

Length of Grade Hole # intersection (oz gold/ton)

5 54.0ft 0.106

8 78.3ft 0.087 12 126.5ft 0.117

The company says there are higher grade intersections within those three holes, but President Malcolm Slack says there was not a lot of extremely high grade intersections that had to be cut in order to avoid a nugget effect.

The surface exploration program is testing the near surface potential between the old workings of the Reef and Bonetal shaft areas known as the C Zone. Belmoral says muck from stopes developed in this area often graded 2-4 times higher than that indicated by diamond drilling due to the presence of significant free gold.

The current program has cut several long intersections, drilled in opposite directions, that are characterized by free gold flecks throughout the mineralized zone.

“The exact nature of the veins is as yet unclear but the possibility of significant economic reserves is obviously enhanced,” the company says.

Belmoral had been considering two approaches to the underground work, either via the Hallnor shaft or the Reef shaft. It now plans to rehabilitate and deepen the Reef shaft by 1,000 ft in order to access the main structure between the two mines between the 2,500- and 5,000-ft levels.

Once the shaft is completed, probably in the first quarter of 1987, 6,500 ft of drifting and crosscutting and 70,000 ft of diamond drilling will be done by mid-1988. The object is to prove up at least 1,750,000 tons grading 0.30 oz gold per ton.

As well, surface exploration will continue on the C Zone and other near-surface potential in order to outline a further one million tons grading 0.15 oz.