Amax encouraged by Robertson widths

Two holes drilled by Amax Gold (NYSE) returned promising gold values over appreciable widths from the Robertson gold property adjacent to Placer Dome’s Pipeline gold discovery in Nevada.

Amax can earn a 60% interest in the Robertson project from Vancouver-based Coral Gold (VSE), which briefly operated a heap leach mine on the property in the late 1980s.

The two recent holes were drilled in the centre of the property where Amax has focused its current exploration effort. Hole 49 intersected 245 ft. averaging 0.104 oz. gold per ton, which includes 200 ft. averaging 0.124 oz. gold.

Hole 51, about 225 ft. apart from hole 49, intersected 180 ft. averaging 0.085 oz. gold per ton, including 140 ft. averaging 0.105 oz. gold. Results are awaited for two additional holes, and more drilling is planned to begin immediately.

Jim Baylis of Coral Gold said the mineralization was encountered “about 300 ft. below surface” which, he said, could still be mined by open pit if a significant enough deposit was outlined.

So far, Amax hasn’t tested the southern portion of the Robertson property because of Coral’s ongoing boundary dispute with the Cortez joint venture owned 60% by Placer Dome (TSE).

Baylis said Coral (and Amax) will wait to resolve this issue until a separate legal dispute is settled between Placer Dome and Gold Fields Mining over a sizable portion of the Pipeline deposit.

“We don’t want to be pressed into making a settlement while these titans are going at one anther,” Baylis said, after confirming that Coral had been approached with a settlement offer.

The Pipeline gold deposit held by the Cortez joint venture is considered one of the most significant recent gold discoveries in North America. At last report, the deposit was estimated to host preliminary reserves of 11.3 million tons grading 0.24 oz. gold. Placer Dome is continuing to explore and drill the deposit, and mining analysts are predicting a large increase in reserves.

About 45% of the deposit is contained on ground being disputed by Placer Dome and Gold Fields. The two majors entered into a prospecting permit and purchase option agreement on Aug. 13, 1991.

The purchase price for all of Gold Field’s right, title and interest in the project was reported as US$1.25 million (plus a US$2-million royalty buyout). But Gold Fields now claims the agreement is void because of an alleged failure by Placer Dome to disclose certain facts. Placer Dome is seeking judicial determination of the validity of the agreement.

To complicate matters further, a former minority partner in the Cortez joint venture also launched legal action relating to Pipeline. Last November Placer Dome and partner Kennecott purchased the remaining interest held in Cortez by the third partner, resulting in Placer Dome holding a 60% interest (subject to a 7.5% net proceeds interest). Royal Gold (NASDAQ) alleges that Placer Dome failed to disclose certain facts when the interest was purchased. As a result of the Pipeline discovery, exploration activity is picking up steam in Nevada’s Battle Mountain Trend which contains such gold deposits as Pipeline, Fortitude, Marigold, McCoy, Cove, Hilltop, Gold Acres, Cortez, Buckhorn, Horse Canyon, Tonkin Springs, Goldpick and Gold Bar. A number of majors are actively exploring in the area, and several juniors recently acquired ground.

The most recent player, Cathedral Gold (TSE), staked 1,900 acres of mineral rights about 16 miles southeast of Pipeline. The company said its Trendline property is in the covered valley adjacent to a “lower plate window,” an exposure of the lower plate rocks of the Roberts Mountain thrust. (Pipeline was also discovered in a similar environment adjacent to a “lower plate window,” generally called the Gold Acres Window).