EXPLORATION ’87 BARRICK

American Barrick Resources has its first real exploration budget this year since the Camflo days in the early 1980s. Exploration became a low priority since then because of Camflo’s debt position, and this situation continued into its eventual amalgamation with Barrick.

The largest portion of its $4.6-million exploration budget will be spent in the U.S., where Barrick has acquired two producing mines in recent years. In the area of the Mercur mine (which has become one of the jewels of the growing Barrick empire) in Utah, about $600,000 will be spent on areas of geological potential.

Barrick has another property, within a few thousand feet of the Fortitude open pit gold mine (owned by Battle Mountain Gold Co.) in Nevada. Barrick plans to spend about $1 million exploring this property in 1987. It will spend another $1 million in the area of its Goldstrike mine, recently acquired through an amalgamation with PanCana Minerals.

In Canada the main thrust will be in the Harker-Holloway area of northeastern Ontario. This is the one area Barrick kept working through the lean years, and it paid off in spades with the development of the Holt- McDermott mine. The mine is expected to begin producing next year at an eventual rate of about 100,000 oz per year. On properties in that vicinity which are 100% owned, the company plans to spend $970,000 — mainly on fill-in work and some deep drilling.

The property also has a large joint- venture ground position with Lenora Explorations (35%), including the Worvest property where reserves of 216,307 tons grading 0.194 oz gold per ton were recently announced. On these properties Barrick’s share of 1987 exploration will be about $800,000 this year, mostly on shallow drilling.

Barrick plans to spend $136,000 on a property it is funding with Dasher Resources in the Casa Berardi area. It also plans to carry out exploration programs near its Camflo mine in Val d’Or, though these plans have not yet been completed.

Barrick’s exploration strategy is somewhat unique for a Canadian public company in that it is one of the few firms not taking advantage of flow- through funding. The main reason is that the company wants the eventual writeoffs which are lost when flow through is used. Barrick does acknowledge, however, that both flow-through and the Ontario Mineral Exploration Program were major benefits in getting the Holt-McDermott through its lean years. The exploration staff stands at 15 members.