Cons Professor starting final push at Shoal Lake

Field crews have been mobilized and dewatering of the Shoal Lake mine workings is expected to start within a week, G. R. Cunningham- Dunlop, president of Consolidated Professor Mines, told a special meeting of shareholders.

The new program is being funded by Conwest Exploration which will spend $2.5 million on the Shoal Lake property, near Kenora, Ont., in return for 1,993,373 Consolidated Professor flow- through shares. Upon completion of the expenditures, Conwest will have an approximate 20% interest in Consolidated Professor, Mr Cunningham-Dunlop told The Northern Miner after the meeting.

The follow-up phase of underground work is designed to upgrade possible and probable reserves into the proven category. Based on current estimated reserves of 1.5 million tons grading 0.34 oz gold per ton, the property could handle a 300-ton-per-day operation. “That is not high enough,” for a successful operation, Mr Cunningham-Dunlop explained. “The current program will try to upgrade the inferred and possible reserves to the proven- probable thereby enabling us to increase the mining rate to 400 tons per day.”

In response to a question from a shareholder concerning gold prices, Mr Cunningham-Dunlop noted that “the current gold price is getting comfortable for us.”

The underground program will include deepening the mine workings to the 660-ft level from 530 ft, in-fill drilling between the upper mine levels and to a depth of 1,400 ft and connection of the old Cameron Island mine workings to the existing workings. Cameron Island is situated 300 ft northwest of Stevens Island, on which the decline portal is located.

An important part of the program will be exploration of the extension of the Main zone to the north. Discovered by a surface drilling program, the extension will be tested from drill stations in a 1,100-ft-long drift; excavation of which is also part of the planned program. The underground work is budgeted at $4 million. Upon completion, the company feels it will be in a position to continue to a production decision.

Additional funds for the program will come from a private placement of two million units, each unit consisting of one share and half of a warrant, which will be completed by Haywood Securities. In total, both the Conwest and Haywood deals will raise slightly less than $4.5 million for Consolidated Professor. If all warrants are exercised, an additional $2.9 million would be made available to the company.

Although Conwest has a significant indirect interest in the project via its stake in the company, Mr Cunningham-Dunlop says that future joint venture deals are still possible. “We’ve had three marriages and three divorces,” he says. “If we ever joint venture the property again, it will be contingent on placing it into production.”

Capital costs required to bring the project to production are estimated at $34.1 million by Anthony W. Garson, manager of research at Haywood Securities. This figure includes a cost of $3 million payable to Union Carbide. Union Carbide decided to withdraw from the project this year, after spending more than $6 million on the property. Consolidated Professor can regain a 100% stake in the project by paying Carbide $3 million. Union Carbide withdrew from the project after a corporate decison to dispose of its global mineral assets.

Other important estimates made by Mr Garson include future earnings averaging 15 cents per share and operating costs of $200 per oz of gold.