EXPLORATION ’87 SMDC

Saskatchewan Mining Development Corp. (smdc) is playing a major role in the discovery, development and marketing of mineral resources in Saskatchewan. In just over a decade smdc has evolved from an exploration base to become a fully diversified and internationally recognized mining corporation with expertise in all aspects of exploration, research, development and marketing. Exploration remains a keystone to smdc’s continued growth.

In 1987 the corporation, together with joint-venture partners, will participate in about $25 million of exploration expenditures in Saskatchewan. Slightly more than half of that will be uranium exploration, with the remainder directed largely toward gold. The smdc cost share, levered through farm-out arrangements, will be similar to 1986 — about $5 million. This will be distributed 40% to uranium and 60% to precious and base metals — largely gold. Smdc will participate in about 45 gold projects this year, with the largest concentration of projects being in the La Ronge greenstone belt.

Following the successful start-up of milling operations at the Star Lake mine earlier this year, smdc and its partners, Uranerz Exploration & Mining and Starrex Mining, plan a dual program of surface and underground exploration drilling in 1987. The objective will be to extend the mineable reserves already blocked out in the 21 zone and explore other mineralized structures on the property. Significant drill programs are also planned on five other projects with various partners in the immediate Star Lake area. This will bring the 1987 expenditures on smdc-managed projects in this area to about $2.5 million.

The most advanced project in this group is the Jojay Lake project, in which Claude Resources and Shore Gold Fund are partners. Drilling in 1987 will seek to extend to depth and along strike the significant gold mineralization found in 14 out of 17 holes drilled on the project in 1986. The Jojay mineralized zone is 7 km north of the Star Lake mill.

Another area that will see extensive drilling this year is related to the Byers Fault, some 30 km northeast of Star Lake. Significant drilling programs are planned for the Tower Lake and Weedy Lake projects, both operated by Golden Rule Resources. On both projects the objective will be to extend previously indicated gold mineralization which may have low grade, bulk- mining potential. In addition to smdc, other partners in these projects are Goldsil Resources and Comaplex Resources International (in the Tower project) and Tyler Resources (in the Weedy project).

Interesting results are also anticipated from exploration planned for the Preview Lake project, within La Ronge Provincial Park. Partners in this project are Uranerz Exploration & Mining and Windarra Minerals. This program will include detailed drilling of gold-bearing shear structures in the Pap Lake area and further testing of other mineralization on the property.

Smdc and partners have also planned about $2.5 million of gold exploration this year in east-central Saskatchewan, adjacent to the Flin Flon base metal camp. Although gold mineralization has been known in this area for at least 75 years, it is only recently that systematic drilling guided by modern geological concepts has begun to indicate the economic potential of the area. The Amisk Lake project, with Husky Oil as partner, is the most advanced smdc project in this area. In 1987 systematic drilling will continue on the Laurel Lake gold- silver zone in addition to exploration of other parts of the 18,000-ha, joint- venture property. Further exploration and diamond drillng is planned on the Phantom Lake and Batty-Graham projects with partner Vista Mines. At Phantom Lake, in 1986, 12 new gold showings were discovered by basic prospecting on this property which has easy road access from the town of Flin Flon.

In 1987 smdc will participate in 22 uranium exploration projects and will operate nine of these. All are in the Athabasca Basin region and include various partners, both Canadian and foreign.

Exploration programs will continue in both the Cluff Lake area, operated by Amok Ltd., and in the Key Lake area, operated by Uranerz. The objective in both areas is to find additional uranium reserves for the existing mills. The main exploration area extends northward under sandstone cover from Key Lake. Smdc and various partners will continue geophysics and drilling programs on 12 projects in this particular area with a total budget in 1987 of about $5 million. Major drilling programs are also planned on the McArthur River project and on the Close Lake project, operated by Cogema Canada. An additional $5 million will be spent on about half a dozen uranium projects in this sector. Although the major exploration effort in 1987 will be directed toward gold and uranium, smdc will also participate in three projects seeking polymetallic deposits and two platinum projects.