Douay partners aim to increase reserve tonnage

The latest drilling program at the Douay Twp. gold property of Inco (TSE) and Societe d’Exploration Miniere Vior (ME) in Quebec’s Casa Berardi region is targeted in part at boosting estimated reserves on the West zone to one million tons. The drilling campaign was started up in January and should run until about mid-April. While one drilling rig is probing the Douay project, a second rig has been put to work on adjacent claims optioned by Inco and Vior from Northern Abitibi Mining (ASE).

“We’re still aiming at one million tons,” Vior President Claude St-Jacques said of the West zone when asked about the winter drilling program. Reserves (all classes) at the zone at the beginning of 1991 were estimated to be 584,000 tons averaging 0.3 oz. gold per ton.

Vior became involved in the Douay project in 1986 when it entered into an option deal, agreeing to put up money for exploration work in return for an interest in the property. Inco, the operator, currently has a 53% interest and Vior, 47%. An initial third partner in the project, Cambior (TSE), sold its interest (in proportionate shares) to Inco and Vior earlier this year.

St-Jacques, who works out of Quebec City, is excited about the project and believes there is a potential mine at Douay. “We’re not far from it,” he said of a possible mining operation, “especially because of the quality of the grade.”

Previous drilling in 1981 near the centre of the property uncovered a separate zone hosting an estimated 557,000 tons grading 0.23 oz.

“Our objective remains to find a giant on the property,” St-Jacques said, expressing the hope of uncovering a deposit (or deposits) in the 4- to 5-million-ton range.

As of the middle of March, Inco had drilled more than 20 holes of the latest program on the Douay project, some holes on the West zone and the others in the middle of the property.

Vior’s vice-president of exploration, Jacques Bonneau, said the drilling on the West zone was probing ground to the west, checking for an extension, and at depth. The drilling in the centre of the property has been testing for exploration targets.

Bonneau said some of the holes have been drilled to 1,200 ft. below surface. Overburden, a feature of the Casa Berardi region, is generally 50-100 ft. in depth on the property, Bonneau said. Occasionally, a section of much shallower overburden is discovered, presenting possible sites for a future decline, he said.

On adjacent property to the north and northwest owned by Northern Abitibi, the drilling has been testing for an extension of the Douay West zone. Bonneau said IP anomalies similar to those found on the Douay property have been indicated on the Northern Abitibi claims. (The Northern Abitibi property extends into Joutel Twp. to the west.)

Inco and Vior (and Cambior) caused a sensation early in 1990 when they announced a 59.3-ft. intersection grading 0.23 oz. from the Douay West zone. Smaller intercepts within that core length included 17.4 ft. of 0.35 oz. and 9 ft. of 0.39 oz. The new zone sits about three miles west of the property’s previously drilled centre area. The entire Douay property comprises about 18 square miles.

Not long after Inco and Vior (and Cambior) announced their discovery hole, Northern Abitibi and its then property partner, Golden Rule Resources (TSE), took Inco to court in Alberta. The pair sought to have the court declare as non-binding an option agreement with Inco (and Vior and Cambior, which Inco had included in its option deal on the property).

A settlement was reached out of court and the option agreement revised. Among the changes brought about by the settlement was that Northern Abitibi acquired Golden Rule’s 50% interest in their property in return for shares; the transaction boosted Golden Rule’s ownership in Northern Abitibi to 75%.

Inco and Vior now have an option to earn a 50% interest in the Northern Abitibi property (comprising 78 claims) by spending $1.5 million during a 4-year period. The pair must spend $250,000 in each of the first two years, and $500,000 in each of the two remaining years.

Northern Abitibi has been given the right to acquire a 50% interest in four claims (belonging to Inco, Vior and Cambior) that are surrounded by the 78 claims. At feasibility, Inco and Vior will have the option to purchase an additional 10% interest from Northern Abitibi which, if exercised, would give the former a combined 60% interest in the claims and the latter a 40% interest.

Other companies with property positions in the area include Beaufield Resources (TSE), Greater Lenora Resources (TSE), Homestake Mineral and Joutel Resources (TSE).

The Casa Berardi area hosts two producing gold mines, the Golden Pond project of Inco and Golden Knight Resources (TSE), and the Estrades operation (gold and zinc) of Breakwater Resources (TSE). A third gold producer, considered to be on the fringes of the Casa Berardi area, is the Telbel mine of Agnico-Eagle Mines (TSE).